- Northern Star Resources (NST) has signed a deal to sell its Kundana assets to Evolution Mining (EVN)
- Evolution will pay $400 million in cash for the assets, which produced 120,943 ounces of gold during the 2021 financial year
- The deal is expected to close in late August with the proceeds to be used to support Northern Star’s existing pipeline of growth projects
- Separately, the company also revealed that CEO Stuart Tonkin will also take on the role of Managing Director from today
- Shares in Northern Star Resources are up 1.81 per cent to $10.40, while Evolution Mining shares are trading in the grey at $4.07 at 11:20 am AEST
As part of its focus on “active portfolio management,” Northern Star Resources (NST) has signed a deal to sell its Kundana assets to Evolution Mining (EVN).
According to a binding share and asset sale agreement, Evolution will pay $400 million in cash to acquire Northern Star’s 51 per cent interest in each of the East Kundana Production Joint Venture and the East Kundana Exploration Joint Venture, a 75 per cent stake in the West Kundana Farm-in Joint Venture and the Carbine-Carnage gold project in Western Australia.
With a combined resource estimate of 2.4 million ounces of gold, the Kundana assets collectively produced 120,943 ounces during the 2021 financial year.
While it remains subject to ministerial consent for the transfer of the six tenements, the deal is expected to close in late August with the proceeds to be used to support Northern Star’s existing pipeline of growth projects.
Chief executive Stuart Tonkin, who will also take on the role of Managing Director from today, said the sale was an opportunity to liberate value from assets that were no longer required for the company to meet its strategic objectives.
“The sale of these assets is consistent with our strategy to employ capital where we believe it will generate the greatest return,” he said.
The deal follows a bumper fourth quarter for Northern Star, when it sold 444,012 ounces of gold at an all-in sustaining cost (AISC) of $1459 per ounce. That brings the total volume sold as of June 30 to 1.6 million ounces, which falls well within the company’s guidance of between 1.5 million and 1.7 million ounces.
“It was a strong operational performance from our recently merged team with production and costs comfortably in line with the undertakings we provided to the market,” Mr Tonkin said.
“This flowed through to our financial results, with cash flow rising significantly from the previous quarter, leaving us with cash and bullion of more than A$800 million at the end of the financial year.”
Shares in Northern Star Resources were up 1.81 per cent to $10.40, while Evolution Mining shares were trading in the grey at $4.07 at 11:20 am AEST.