Log in or Register for enhanced features | Forgotten Password?
White Papers | Suppliers | Events | Report Store | Companies | Dining Club | Videos

Mining & Commodities
Minerals & Materials
Return to: EBR Home | Mining & Commodities | Minerals & Materials

Northern Star to acquire South KalgooRlie operations from Westgold

PKBR Staff Writer Published 08 March 2018

Northern Star Resources has agreed to acquire South Kalgoorlie Operations from Westgold Resources for A$80m ($62.4m).

The acquisition comprises the project’s operating processing facility, which has an annual throughput capacity of 1.2 million tonnes, a JORC Resource of 4Moz, including 250,000oz in Reserves, and 800sqkm of prospective gold tenure.

South Kalgoorlie Operations, which is located 50km from Northern Star’s Kundana operations, is currently producing at the rate of 30,000-40,000ozpa. The plant is also toll-treating ore for third parties.

Under the agreement, Northern Star will pay Westgold A$80 million, comprising 9.5 million Northern Star shares at a ten - day VWAP of $6.30 per share, representing a total of A$60 million in NST shares and A$20 million in cash.

Northern Star Executive Chairman Bill Beament said the acquisition would be an economical means of ensuring the Company met its 300,000ozpa production target from organic sources at its Kalgoorlie Operations.

The transaction would also provide an outstanding example of how gold companies can work together to rationalize 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 300,000ozpa,” Mr 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 mor e timely and economical fashion and at the same time provide us with significant exploration potential, including a Resource inventory.

“The 1.2Mtpa South Kalgoorlie processing facility is one of the best-run facilities in the district and is well within trucking distance of our Kundana Operations.”

Settlement of the transaction is due for completion on 01 April 2018.

Source: Company Press Release