PERTH-based gold miner Northern Star Resources has purchased two major Goldfields assets from Canadian giant Barrick Gold, leveraging its rank as the fifth largest gold producer on the ASX. Northern Star purchased Barrick’s Kanowna Belle mine and a 52 per cent stake in the East Kundana joint venture for $75 million in late January, following the completion of a $100 million share placement. The remaining $25 million will be used as working capital.
The purchases are Northern Star’s second major acquisition from the world’s largest gold producer in less than a month; it purchased Barrick’s Plutonic mine, near Meekatharra, for $25 million in late December.
Northern Star’s fundraising placement was completed in January at $0.86 per share, representing a 9.7 per cent discount to the stock’s 10 day volume-weighted average price of $0.95.
According to company statements, the “demand for the placement was substantially in excess of $100 million, reflecting the strong support Northern Star has received for the acquisition from major investors.”
Northern Star managing director Bill Beament told Australian Mining the deal placed the company as one of Australia’s major gold miners, with the potential to produce 350,000oz of gold per year.
“The East Kundana joint venture acquisition makes Northern Star a major Australian gold miner that will appeal very strongly to major global investors,” Mr Beament said.
“The transaction ensures that Northern Star meets the demands of domestic and international investors with respect to critical mass, multiple operations, low costs, consistent dividends and strong growth prospects.”
The company said the latest acquisitions would lift its total gold reserves by 134 per cent to 1.1 million ounces, and resources by 43 per cent to 5.6moz, with average targeted all-in sustaining costs of less than $1050 per ounce.
The East Kundana mine, held in joint venture by Tribune Resources and Rand Mining, lies 45km west of Kalgoorlie. Gold ore mined at the site will be transported to Kanowna Belle, 19km northeast of Kalgoorlie, for processing at its onsite recovery plant.