Ramelius Resources is to set to join the ranks of 200,000 ounce per year gold producers after snapping up Evolution Mining’s Edna May gold mine in Western Australia for up to $90 million.

However, investors haven’t so far exactly been head-over-heels for the deal.

The Perth-based gold play (ASX:RMS) has dipped 2.5 per cent to 39c in lunchtime trade on Monday, capitalising the company at around $219 million.

Ramelius will fork out $40 million in cash, $20 million in cash or scrip once mining is approved and royalty payments of up to $30 million.

“The acquisition of Edna May represents the next step in our stated ambition to build on the strength of our existing operations at Mt Magnet and Vivien,” Ramelius’ managing director Mark Zeptner said.

“Upon completion, we become a 200,000 ounce pa gold producer, with all operations a one-hour flight from Perth.

“Not only does this acquisition drive a significant increase in group Mineral Resources and Ore Reserves, as a going concern it also delivers excellent returns on our initial $40 million investment with minimal capex.”

Edna May had the potential to significantly increase ore reserves and annual production via further extensions.

The deal is expected to close on October 3.

The news comes after Evolution flagged several offers from interested parties for Edna May earlier this month.

Edna May, located near the town of Westonia in Western Australia, produced 70,188 ounces in 2017 which represented around 8 per cent of Evolution’s total production for the year.

The mine opened in 2010 and was expected to be in operation for nine years, producing around 100,000 ounces of gold per annum.