Copper mining and exploration company Aeris Resources has signed an agreement with Evolution Mining to acquire the Cracow gold mine for AUD125m ($87.4m).

Located nearly 500km north-west of Brisbane, Cracow is a high grade, low cost underground gold mining operation and processing facility located in Queensland.

Operating since 2004, the mine has produced more than 1.4 million ounces over its life. In 2020, it is expected to produce 82,500 – 87,500 ounces of gold.

Aeris expects Cracow to generate more than AUD100m ($70m) of net mine cashflows at the current gold price, over the two year period to 30 June 2022.

The Cracow gold mine is supported by approximately 220 full time employees and 45 contractors.

The acquisition is expected to support Aeris’ objective to become a multi-mine producer in attractive commodities.

Aeris plans to invest to extend Cracow mine life

To extend the mine life, Aeris plans to grow its resource base by investing in brownfield and greenfield exploration.

The company intends to fund the transaction through a combination of AUD40m ($28m) equity raising and AUD30m ($21m) acquisition bridge debt facility.

Evolution said that sees Cracow having more value in the hands of Aeris than in its portfolio.

Evolution executive chairman Jake Klein said: “Cracow was acquired in 2011 as part of the formation of Evolution and has been a reliable asset within the portfolio. We thank everyone at Cracow for their contribution to Evolution.

“One of our sustainability commitments is to leave a lasting positive legacy in the communities in which we operate and we are confident that our relationships within the broader community around Cracow, including the traditional custodians of the land, the Wulli Wulli People, reflect this.

“We also believe that Aeris will prove to be a great partner for the community going forward.”

The transaction is expected to be completed around the end of June 2020.