Northern Star Resources strengthens portfolio with Millrose purchase

Workers at one of Northern Star’s projects.
Workers at one of Northern Star’s projects.

Northern Star Resources (ASX:NST) has strengthened its portfolio with the purchase of the Millrose project from Strickland Metals (ASX:STK) for $61m.

Strickland has received a $2m cash deposit and will receive cash consideration of $39m payable on completion of the transaction which is expected to be no later than 30 business days.

Northern Star will also issue 1.5m fully paid ordinary shares which will be issued upon completion of the transaction and subject to 12 months escrow.

Located 40km east of Northern Star’s Jundee operations in WA, the Millrose project has a mineral resource of 346koz of gold at a grade of 1.80g/t.

Northern Star managing director Stuart Tonkin said Millrose is an exciting asset for the company.

“The acquisition of the Millrose gold project presents a very compelling development opportunity that is accretive to the Jundee life asset plan as it should deliver us a sizeable low cost, high grade supplementary resource feed,” he said.

“This bolt-on acquisition, which also comes with significant brownfields exploration upside, will provide us with further confidence to plan organic and profitable growth for Jundee, which already is the lowest cost asset in our tier-1 portfolio.”

Strickland chief executive officer Andrew Bray is pleased with the sale.

“We are very pleased to deliver such a transformative sale for shareholders in a relatively short period of time,” he said.

“The Millrose project was purchased for $10m in mid-2021.

“After a highly successful 11-month drilling campaign throughout 2022 costing approximately $16m, we are now selling the project for approximately $61m, generating an approximate $35m profit for the company.”

If the transaction does not complete, the $2m deposit will convert into a loan which Strickland must pay to Northern Star within 30 days from the termination.