Gold miner Evolution Mining has received a number of offers for its Edna May gold mine in Western Australia and is determining whether a sale will be in the best interest of shareholders.
"Evolution plans to progress these offers and will update the market if any binding agreement to sell the asset is entered into," the company said on Tuesday.
Evolution's strategy is to increase the quality of its asset portfolio over time, which includes continuously evaluating a range of acquisition and divestment opportunities, it said.
The company, Australia's second largest gold miner, last year sold its Pajingo gold mine in Queensland to Chinese-owned Minjar Gold for about $50 million
The Edna May mine produced 70,188 ounces in the 2016/17 financial year, or about eight per cent of Evolution's total gold production, and had an earnings margin of 18 per cent.
RBC Capital Markets analyst Paul Hissey estimates the Edna May mine could be worth around $125 million, based on current reserves of 426,000 ounces over five and a half years.
"We would consider any consideration contingent on how an eventual transaction was structured, with an all cash offer typically coming in substantially lower than a scrip offer," he said in a note.
Evolution also owns the Cowal mine in NSW, three mines in Queensland, Mungari in WA and an interest in Queensland's Ernest Henry copper-gold mine.
Evolution shares dropped seven cents, or 2.7 per cent, to $2.53, in line with weakness among most gold mining stocks.
