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Evolution to pay off Red Lake with $US550 million placement


Evolution Mining has secured a $US550 million ($749 million) private placement in the United States with most of the funds used to pay its loan for the Red Lake gold operation in Canada.

The funding is Evolution’s first debt private placement in the United States with the proceeds to be drawn in November 2021.

Evolution stated the placement is comprised of $US200 million maturing November 2028 with a fixed rate of 2.83 per cent, and $US350 million maturing November 2031 with a fixed rate of 3.17 per cent.

According to Evolution, the placement was supported by a major rating agency and received strong support from investors.

The company stated that the proceeds will repay its $450 million loan associated with Red Lake with the remaining funds used for general corporate purposes.

Red Lake was acquired by Evolution in March for $356.4 million.

Evolution is anticipating its debt maturity profile will be extended from 2.7 years to 7.1 years following the placement, which the company stated will align with its overall average mine life.

“We are delighted with the strong level of support from investors for our maiden US private placement,” Evolution finance director and chief financial officer Lawrie Conway said.

“The placement announced today is consistent with our approach of maintaining a strong balance sheet to fund our strategy and enable the business to prosper through the cycle. This transaction also ensures that our debt profile better matches our asset portfolio of long-life, high-quality operations.

“The completion of the placement will further optimise our balance sheet, repay the existing Red Lake term loan facility and provide us with additional capacity to fund existing and future growth initiatives, and maintain flexibility around our dividends.”

Evolution will not have any falls in funding until 2026 with its $360 million revolving credit facility remaining undrawn and available until March 2023.

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