Evolution also agreed to pay an additional $100 million upon new resource discovery at the mine.
“Red Lake is an under-capitalized asset which, through a committed investment in development and exploration, is intended to become a cornerstone asset in the Evolution portfolio,” said Jake Klein, Evolution’s executive chairman.
Newmont said in a statement that the sale was part of its efforts to streamline its asset base.
The deal follows the top global gold miners Newmont and Barrick Gold Corp’s (ABX.TO) decision to focus on their best performing mines, which had prompted expectations of mine sales around the world.
These expectations have materialized in a chain of recent investments by Australian miners into gold mining including BHP’s (BHP.AX) recent stake acquisition in SolGold Plc (SOLG.L) and Saracen Mineral Holdings Ltd (SAR.AX) acquiring Barrick’s 50% stake in Super Pit gold mine in November.
Evolution has also made a commitment to spend $100 million on existing operations and an additional $50 million in exploration at Red Lake over the first three years after the completion of the deal.
The acquisition will be funded through an A$600 million ($407 million) loan facility, the Australian gold explorer said in a statement.
Reporting by Shreya Mariam Job in Bengaluru; Editing by Chris Reese and Lisa Shumaker