* Glencore on track for $5 bln in asset sales
* Evolution gains low cost gold production
* Evolution to get 49 pct stake in mine expansion (Adds Evolution comments)
MELBOURNE, Aug 24 (Reuters) - Glencore Plc GLEN.L has agreed to sell a 30 percent stake and all of the gold from its Ernest Henry copper mine in Australia to Evolution Mining EVN.AX for A$880 million ($670 million), advancing the Swiss giant's effort to pay down debt.
Evolution, Australia's second-largest gold miner, said the deal would boost its gold output at virtually no cost as the gold is a by-product of copper, which it will sell back to Glencore. It will also get a 49 percent stake in any expansion of the mine beyond its 11-year remaining life.
Glencore, which reports its half-year results later on Wednesday, is targeting asset sales of up to $5 billion to help cut debt to between $17 billion and $18 billion by the end of this year.
"This transaction forms part of Glencore's debt reduction plans initially announced on 7 September 2015," Glencore said, adding that the Ernest Henry mine has "significant potential going forward".
Evolution plans to raise A$401 million through a sale of new shares priced at A$2.05 a share, a 16 percent discount to its close on Tuesday, to existing shareholders to help fund the deal.
"The addition of low cost gold production from Ernest Henry to our portfolio gives us exposure to another high quality, long life asset that further underpins the future success of our business," Evolution's executive chairman, Jake Klein, said in a statement.
Evolution has also agreed to pay 30 percent of the mine's production and capital costs tied to copper concentrates.
($1 = 1.3137 Australian dollars)