Evolution Weighing Offers for Pajingo Gold Mine in AustraliaBy
Nation’s second-largest producer to book loss or writedown
Underground mine in Queensland state began operations in 1986
Evolution Mining Ltd., Australia’s second-largest gold producer, is weighing offers for its Pajingo mine in Queensland, though no agreement has been reached for a sale.
The company is likely to take a loss of between A$70 million ($54 million) to A$80 million on any sale based on the current carrying value of the 30-year old mine, Sydney-based Evolution said Tuesday in a statement. If no transaction is concluded, the company will record an impairment for a similar value in full-year accounts to be published on Aug. 17.
Evolution, with seven mines in Australia, has previously flagged it would study offers for its higher-cost sites as it seeks to improve the quality of its portfolio. It’s evaluating approaches from third parties for Pajingo, which produced 68,630 ounces of gold in the year to June 30, the lowest total among the company’s operations.
Gold’s 26 percent advance this year has raised producers’ valuations and is likely to extend a deal spree in the sector, according to PCF Capital Group Pty, an industry adviser. The gold industry has racked up about $50 billion of transactions since the start of 2014, according to data compiled by Bloomberg.