PERTH (miningweekly.com) – ASX-listed Navarre Minerals has received binding commitments to raise A$36.8-million to partly fund its purchase of gold miner Evolution Mining’s Mt Cartlon project, in Queensland.

The two companies earlier this week announced the A$90-million transaction that would transform Navarre into a gold producer.

Under the terms of the agreement, Evolution would be paid an initial A$40-million on the completion of the transaction, comprising a cash component and up to A$20.4-million worth of Navarre shares.

Up to A$25-million will be payable on cumulative gold production milestones from Crush Creek with A$5-million payable upon achievement of 50 000 oz, A$5-million payable upon achievement of 100 000 oz and A$15-million payable upon achievement of 175 000 oz, while up to A$25-million will be in the form of a 5% gold price linked royalty where the average spot gold price is greater than A$2 250/oz in a given quarter.

The royalty is payable on production from both Mt Carlton and Crush Creek from July 2023 for up to 15 years.

Navarre on Thursday said that its share placement was oversubscribed, with strong support shown by a number of existing shareholders, along with new quality institutional and sophisticated investors.

Evolution’s commitment to subscribe for equity in the acquisition has been scaled back to a total of A$13.2-million worth of new shares, representing approximately 12.9% of Navarre’s enlarged share capital.

Payment of the A$13.2-million of the upfront consideration for the transaction will be satisfied by Navarre issuing more than 176.5-million ordinary shares to Evolution, with the remainder of the upfront consideration paid in cash.

The A$36.8-million in funds raised under the placement, which exclude Evolution’s subscription, will be used primarily to fund the cash component of the upfront consideration and associated transaction costs, with any surplus funds being applied towards general corporate purposes.

“We are delighted with the strong support for the placement, which has secured interest from new and existing investors who are committed to our vision of becoming a significant Australian gold producer,” said Navarre MD Ian Holland.

“We appreciate Evolution’s strong equity commitment, reflecting their endorsement of the longer term potential of the Mt Carlton operations.

“This funding for the transformational Mt Carlton acquisition is a logical step to grow the company, maximise shareholder return and scale our presence in the Australian mining industry.