Total
0
Shares
Market Herald logo

Subscribe

Be the first with the news that moves the market
  • Australian gold producer Northern Star (NST) has secured $765 million from shareholders
  • Finances from the major capital raise will be used to fund Northern Stars’s buy of the Kalgoorlie Super pit
  • The gold producer is buying a 50 per cent interest in fellow gold producer Kalgoorlie Consolidated Gold Mines, who owns the project
  • The purchase, which also includes assets from Newmont Goldcorp, is valued at nearly $1.2 billion
  • Kalgoorlie Super Pit is the biggest open pit gold mine in Australia, and KCGM produces up to 800,000 ounces of gold each year
  • Northern Star’s share price is up nearly 3 per cent, with shares trading for $9.91 each

Australian gold producer Northern Star (NST) has secured $765 million from shareholders to assist in buying an interest in the Kalgoorlie Super Pit. The ASX 200-lister confirmed yesterday it will buy a 50 per cent interest in Kalgoorlie Consolidated Gold Mines, who owns the project.

The purchase stems from Northern Star agreeing to buy all shares in Kalgoorlie Lake View who already owns the interest in the super pit. Through the transaction, which carries a $1.17 billion (US$800 million) price tag, Northern Star will also obtain W.A.-based assets from Newmont Goldcorp.

Kalgoorlie Super Pit is the largest open pit gold mine in Australia, stretching 3.5 kilometres. To compliment this, KCGM’s processing facilities are able to produce up to 800,000 ounces of gold each year.

In its release to the Australian market today, Northern Star detailed it will gain a half share in gold projects holding around 80 million ounces of the precious metal.

Executive Chairman of Northern Star Bill Beament explained the KCGM acquisition will immediately increase the company’s free cashflow. Adding, it provides ample opportunity for the company to further develop the fruitful gold mine.

“The acquisition also comes with huge growth potential via further optimisation of the open pit and the development of underground operations,” Bill said.

Fellow ASX-listed gold producer Saracen holds the other half of KCGM.

Shareholders were invited to buy into Northern Star at $9 per share, which was heavily oversubscribed. This price marks at 6.7 per cent discount from Friday’s closing price.

Since announcing its secured raising commitments, Northern Star’s share price is up 2.69 per cent. Shares in the company are trading for $9.91 each.

NST by the numbers
More From The Market Herald

" Aurizon (ASX:AZJ) to buy One Rail for $2.35b

Aurizon (AZJ) has signed an agreement with Macquarie Asset Management to purchase One Rail Australia for $2.35 billion.
Rio Tinto (ASX:RIO)- CEO, Jakob Stausholm

" Rio Tinto (ASX:RIO) aims to half carbon footprint by 2030

Global mining giant Rio Tinto (RIO) has pledged to half its carbon footprint by 2030.
Orocobre (ASX:ORE) - CEO and MD, Martin Perez de Solay

" Orocobre (ASX:ORE) tables record Mt Cattlin production after Galaxy merger

Shares in lithium big-cap Orocobre (ORE) are trading green this morning after the company announced record production from its new Mt Cattlin mine
Lynas (ASX:LYC) - Managing Director & CEO, Amanda Lacaze

" Lynas Rare Earths’ (ASX:LYC) sales drop as COVID cases slowed production

Lynas Rare Earths (LYC) has reported a drop in sales revenue after a recent spike in COVID-19 cases in Malaysia led to a