Northern Star to acquire Kalgoorli mine operations
Published by Claire Cuddihy,
Global Mining Review,
Northern Star Resources has agreed to acquire Westgold Resources’ South Kalgoorlie mine operations for a total consideration of AUS$80 million.
The acquisition comprises the project’s operating processing facility, which has an annual throughput capacity of 1.2 million t, a JORC Resource of 4 million oz, including 250 000 oz in Reserves, and 800 km2 of prospective gold tenure.
Located 50 km from Northern Star’s Kundana operations, South Kalgoorlie mine is currently producing at the rate of 30 000 - 40 000 oz/yr.
The plant is also toll-treating ore for third parties. Under the agreement, Northern Star will pay Westgold AUS$80 million, including 9.5 million Northern Star shares at a ten-day volume weighted average price (VWAP) of AUS$6.30/share, representing a total of AUS$60 million in NST shares and AUS$20 million in cash.
Northern Star Executive Chairman Bill Beament said the acquisition would be an economical means of ensuring the company met its 300 000 oz/yr production target from organic sources at its Kalgoorlie operations. According to Northern Star, the transaction would also offer a good example of how gold companies can work together to rationalise their operations, generate economies of scale and ultimately increase returns for both groups of shareholders.
“Our highly successful exploration strategy in Kalgoorlie has generated huge growth in our inventory and paved the way for us to grow production there to 300 000 oz/yr,” Beament said.
“To capitalise on this success, we were considering the option of expanding our Kanowna Belle facility […] however, the South Kalgoorlie Operations purchase will enable us to achieve our organic growth target in a more timely and economical fashion and at the same time provide us with significant exploration potential, including a Resource inventory. “The 1.2 million tpy South Kalgoorlie processing facility is one of the best-run facilities in the district and is well within trucking distance of our Kundana Operations.”
According to Northern Star, the transaction is due to be finalised on 1 April 2018.
Read the article online at: https://www.globalminingreview.com/finance-business/08032018/northern-star-to-acquire-kalgoorli-mine-operations/
You might also like
Komatsu’s GHG alliance members join to learn about zero-emissions progress
The GHG Alliance was created to bring together mining industry leaders to work toward a shared goal of delivering zero-emissions equipment solutions.