JOHANNESBURG (miningweekly.com) – Northern Star Resources has signed a legally-binding conditional sale and purchase agreement with Billabong Gold to sell its Plutonic gold mine, in Western Australia, as a going concern.
The sale comprises cash and scrip with a combined value of A$46.2-million plus contingent consideration of up to $20-million.
As a result of the sale, which was first mooted in February this year, Northern Star’s production guidance for the current financial year is between 485 000 oz and 515 000 oz at an all-in sustaining cost of between A$1 000/oz and A$1 050/oz.
Northern Star’s production will now come from the three concentrated centres of Jundee, Kalgoorlie and Paulsens and the miner aims to reach a production rate of 600 000 oz/y in 2018, compared with its previous target of 700 000 oz/y, of which Plutonic was to contribute 100 000 oz/y.
Toronto-based mining executive Chris Bradbrook – founder of TSX-listed New Gold and Crocodile Gold – controls Billabong. The buyer’s intention, following completion, is to list Billabong’s parent company on the TSX or the TSX-V.
Under the terms of the sale, Northern Star will emerge as a significant shareholder in this publicly-listed company, giving it an ongoing exposure to the project’s future production and exploration success.
Northern Star MD Bill Beament said on Monday that the sale represented an “outstanding result” for the company on every level. “The terms of the sale are attractive for Northern Star shareholders both in terms of the price we have received and the continuing exposure we have to Plutonic’s growth.”
At completion of the sale targeted for September 30, Northern Star intends to declare the record and payment dates for a special fully-franked dividend of 3c apiece.
Edited by: Mariaan Webb
Creamer Media Senior Deputy Editor Online
EMAIL THIS ARTICLE SAVE THIS ARTICLE
To subscribe email subscriptions@creamermedia.co.za or click here
To advertise email advertising@creamermedia.co.za or click here