Northern Star Resources (ASX: NST) that the company has agreed to buy Newmont Goldcorp鈥檚 50% stake in Western Australia鈥檚 Kalgoorlie Super Pit mine and its associated assets. Once completed, the iconic mine would have full Australian ownership for the first time in its operating life.
Earlier this year, Northern Star was rumored to be the frontrunner for Barrick Gold鈥檚 50% stake in the Super Pit mine, which was snatched up by fellow Australian miner Saracen Mineral Holdings last month for $750 million.
Earlier this year, Northern Star was rumored to be the frontrunner for Barrick Gold鈥檚 50% stake in the Super Pit mine
This time, Northern Star was able to secure the remaining portion of the highly coveted gold asset with a total cash offer of $800 million.
To fund the purchase, Northern Star has arranged a fully underwritten private placement of shares at a 6.7% discount to the Friday鈥檚 closing price to raise A$765 million ($700 million).
This acquisition would create 鈥渟ubstantial value鈥� and provide enormous 鈥渟hort, medium and long term opportunities鈥� for Northern Star, executive chairman Bill Beament stated in a media release. Total resources across the company鈥檚 operations would increase to 28.3 Moz, including 9.8 Moz in reserves.
The Super Pit is one of the most significant gold systems in the world, with an estimated 80 Moz endowment and a world-class gold content of 45,000-60,000 oz per vertical metre.
The mine currently has an estimated reserve of 7.3 Moz and has produced on average 660,000 oz/year at an all-in sustaining cost of around A$1,100/oz over the last five years.
Super Pit would not be the only major deal made by Northern Star over recent years. In November the company gained control over Echo Resources and its Yandal gold project in Western Australia through a A$242.6 million takeover deal. Towards the end of last year, Northern Star also spent $260 million to acquire the 4.1 Moz Pogo underground gold mine in Alaska.