NORTHERN Star Resources (ASX: NST) has entered into a binding agreement with Newmont Goldcorp to acquire 50pc of the KCGM Super Pit and other tenements in Kalgoorlie, WA, for US$775m, and another US$25m for a separate parcel of tenements close by.

Northern Star said it expects its share of the KCGM JV to add 120,000-140,000oz to its 2020 gold production at an AISC of A$1240/oz-A$1340/oz.

The US$800m (A$1.16b) transaction is expected to be completed by January 2020, subject to approval from the WA minister of lands, while all economic benefit will transfer from 1 January 2020.

Saracen Minerals purchased 50pc of the KCGM JV in November, 2019, from Barrick Gold for A$1.1b.

Northern Star’s acquisition will put the iconic Super Pit mine back in the hands of Australian miners for the first time in more than 30 years.

While Northern Star will inherit Newmont Goldcorp’s operatorship of the Super Pit, Northern Star said that it “intends to engage with Saracen to explore the optimal operatorship model, with a view to capitalising on each partner’s respective and complementary strengths”.

Northern Star chief executive, Bill Beament, said the acquisition would create substantial value and provide enormous short, medium and long-term opportunities.

“The purchase of a 50pc stake in the Kalgoorlie Superpit meets our key strategic objectives of generating strong financial returns and growing our gold inventory from Tier 1 mines,” he said.

“This is one of the world’s greatest gold systems, as shown by its 80Moz endowment and the fact that in contains up to 60,000oz per vertical metre.

“To put this in context, our Jundee mine, which is itself a Tier 1 asset, contains around 13,000oz per vertical metre.

“Both companies have established outstanding track records of unlocking value from acquisitions and I am delighted that we will be able to pool our skills and experience to create substantial value for our shareholders and the local community through both mine development and exploration.”

Production at the mine was limited throughout 2019 due to a rockslide in 2018, where more than 1mt of rock fell down the eastern wall of the Fimiston pit.

The slides, which occurred over two days, destroyed a ramp and blocked access to part of the pit causing monthly ore figures to reduce from more than 1.2mt to 0.4mt.

Remediation is anticipated to take about 3.5 years when gold production will revert to historic levels.