Northern Star Resources has bought two mines from Barrick Gold in a deal worth more than $75 million.
This morning the company announced it had purchased Barrick’s 52 per cent stake in the East Kundana joint venture as well as the Kanowna Belle mine, both located in WA's Goldfields.
The purchases will be funded by a combination of cash reserves, a $100 million underwritten placement and a non-underwritten share purchase plan to raise an extra $15 million.
The raisings will be priced at a discounted 86 cents a share.
Managing director Bill Beament said the deal placed the company as one of Australia’s major gold miners with the potential to produce 350,000 ounces of gold per year.
"The East Kundana JV acquisition makes Northern Star a major Australian gold miner that will appeal very strongly to major global investors," he said.
"The transaction ensures that Northern Star meets the demands of domestic and international investors with respect to critical mass, multiple operations, low costs, consistent dividends and strong growth prospects."
Last year the company boosted its earnings by 30 per cent, posting a record profit of $28.3 million on the back of a rise in gold production.
Beament said the record profit came despite racking up $44 million in capital expenditure, including $10 million on exploration activities, investments, and a plant upgrade.
Owner of the Paulsens underground gold mine located in WA’s West Pilbara Mineral Fields, the miner delivered 88,614 ounces of gold at cash cost of $680 an ounce.
“We’ve got a very low cost base, we did our heavy lifting 12 to 18 months ago we changed out the contractors, we went to all of our suppliers, we put those disciplines in our business,” Beament said.
One of the more bullish MD’s in the gold sector, Beament has previously described the price of gold as “fantastic”.
“Two years ago we were jumping around in Kalgoorlie here singing its praises, and it’s the same price,” he said.
“At the end of the day it’s a very good gold price.”