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Evolution (ASX:EVN) share price higher on major funding announcement

Gold prices have been slipping, putting pressure on ASX gold stocks.
The post Evolution (ASX:EVN) share price higher on major funding announcement appeared first on The Motley Fool Australia. –

The Evolution Mining Ltd (ASX: EVN) share price is edging higher in early trade, up 0.3%.

Below we take a look at the ASX 200 gold miner’s major funding announcement.

What did Evolution announce?

Evolution’s share price is gaining after the company reported it had successfully priced a US$550 million (AU$753 million) maiden debt private placement in the United States.

The gold miner said it received an investment grade rating, and the placement was “strongly supported” by investors and oversubscribed.

The placement consists of 2 tranches. The first US$200 million matures in November 2028 with a fixed rate coupon of 2.83%. The second US$350 million matures in November 2031 with a fixed rate coupon of 3.17%.

Evolution reported it has hedged against US dollar exposure via cross currency swaps.

Commenting on the funding arrangement, Evolution’s 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.

The Red Lake Term Loan Facility is associated with Evolution’s AU$450 million acquisition of Red Lake.

The transaction remains subject to standard closing conditions.

Once those are met, Evolution expects to draw the proceeds in November. The new funding will extend Evolution’s debt maturity profile from 2.7 years to 7.1 years

Evolution share price snapshot

Like almost every ASX 200 gold miner, Evolution’s share price has come under pressure amid a sliding gold price, with the yellow metal down some 12% since this time last year.

Over the past 12 months, Evolution’s shares are down 31%, while the S&P/ASX 200 Index (ASX: XJO) gained 25% over that same time.

Year-to-date the Evolution share price has continued to struggle, down 26%.

The post Evolution (ASX:EVN) share price higher on major funding announcement appeared first on The Motley Fool Australia.

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More reading

5 things to watch on the ASX 200 on Thursday

5 things to watch on the ASX 200 on Wednesday

What’s up with ASX 200 gold shares on Tuesday?

5 things to watch on the ASX 200 on Tuesday

5 things to watch on the ASX 200 on Thursday

The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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