The Bateman gold project, then known as the Phoenix project, was suspended in 2016 after a revised resource estimate lowered its mineral reserves significantly. Courtesy of Battle North Gold.

Evolution Mining announced on Mar. 15 that it has agreed to purchase all Battle North Gold’s issued and outstanding shares for $2.65 per share, acquiring the Bateman gold project and expanding its claim at its Red Lake complex in western Ontario.

The deal is valued at around $343 million and represents a 46 per cent premium over Battle North’s latest closing price on Mar. 12.

In 2019, Australia-based Evolution entered into a deal with Newmont Goldcorp to acquire the Red Lake complex, which included the Red Lake, Campbell and Cochenour mines, for US$375 million. The company said it was committed to investing US$100 million more on existing operations and an additional US$50 million in exploration by 2023.

“The acquisition [of the Bateman gold project] provides Evolution with an opportunity to expand our footprint in the region and create value by leveraging the infrastructure of the two operations,” said Evolution’s executive chair Jake Klein.

He added that the company hopes to boost its processing capacity and aspires to produce more than 300,000 ounces of gold per year at Red Lake.

Battle North, formerly known as Rubicon Minerals, had trouble developing its Bateman (previously known as Phoenix) underground gold project. The Toronto-based company rushed the mine into production in 2015, without completing a feasibility study or having adequate geological understanding of the deposit.

Related: Newmont expands its presence in B.C.’s Golden Triangle in $393 million deal

A Jan. 2016 revised resource estimate for the site showed the project’s indicated reserves falling from 1.13 million ounces from 4.12 million tonnes grading at 8.52 per cent to just 106,000 ounces from 492,000 tonnes grading at 6.73 per cent.

The mine’s operations were suspended and new management was brought in while the company was put under creditor protection. Since then, Battle North has been working to put its mine back into production. In a feasibility study of the project published in 2021, the company estimated its proven and probable mineral reserves at 635,000 contained gold ounces from 3.56 million tonnes grading at 5.54 grams per tonne.

The project is estimated to also have an all-in sustaining cost of US$865 per ounce of gold and is expected to produce around 74,000 ounces of gold per year over its eight-year mine life.

According to Battle North’s president and CEO George Ogilvie, the deal is the right step forward to create value at the Bateman Gold project and will deliver the best outcomes for shareholders.

“We believe that there are unique and undeniable merits to combining the Red Lake assets of Battle North and Evolution and this transaction reduces development and execution risk,” said Ogilvie in a statement. “Evolution is a highly regarded mining company with a demonstrated ability to successfully operate internationally.”

Battle North shareholders will vote on the transaction in May and the deal is expected to close by the second quarter of 2021.