Northern Star Resources has joined Saracen Mineral Holdings in making the Kalgoorlie Super Pit a wholly Australian-owned gold mine, with the announcement to purchase 50% from Newmont Goldcorp Australia for USD $800 million.
The Super Pit - soon to be wholly Australian-owned and operated.
Northern Star Resources Executive Chairman Bill Beament.
Their announcement comes after Saracen acquired 50% ownership of the Super Pit from Barrick Gold earlier this month. This purchase will see Northern Star delivered a half-share of one of the most significant gold systems in the world.
The acquisition also includes a separate parcel of nearby tenements that are 100% owned by Newmont Goldcorp and a transition services arrangement to ensure a smooth transfer of the asset into Northern Star’s portfolio.
As part of the transaction, Northern Star has also been granted an option to acquire Newmont Goldcorp’s 100%-owned power assets, which supply power to KCGM. The KCGM JV owns and operates the Super Pit gold mine in Kalgoorlie-Boulder, Western Australia.
Under the terms of the option arrangement, Northern Star has an exclusivity period to conduct due diligence and finalise a transaction with Newmont. The USD $25 million option fee will be credited against any price agreed or, if Northern Star elects not to proceed, will be refunded when Newmont Goldcorp sells Newmont Power to a third party.
Northern Star Executive Chairman Bill Beament said the acquisition would create substantial value and provide enormous short, medium and long term opportunities.
“The purchase of a 50% stake in the Kalgoorlie Super Pit meets our key strategic objectives of generating strong financial returns and growing our gold inventory from Tier-1 mines in Tier-1 locations,” Mr Beament said.
“This is one of the world’s greatest gold systems, as shown by its 80 Moz endowment and the fact that it contains up to 60,000 oz per vertical metre. To put this in context, our Jundee mine, which is itself a Tier-1 asset, contains around 13,000 oz per vertical metre.
“As well as being accretive across all key metrics, including earnings per share, this acquisition comes with huge upside due to the combination of the world-class nature of the gold system and the respective skill sets of Northern Star and Saracen.
“Both companies have established outstanding track records of unlocking value from acquisitions and I am delighted that we will be able to pool our skills and experience to create substantial value for our shareholders and the local community through both mine development and exploration,” Mr Beament concluded.
Completion of the acquisition is subject only to approval by the Western Australia Minister of Lands, with the acquisition expected to close in early January 2020.
The Fimiston Open Pit, known colloquially as the Super Pit is one of the largest open pit gold mines in the world. It’s oblong-shaped pit is approximately 3.5 kilometres long, 1.5 kilometres wide and over 600 metres deep. In 2019, KCGM celebrated its 30th year of operation, with an open day for the Kalgoorlie-Boulder and wider Goldfields community.