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Intrepid shareholders approve A$40m Paulsens sale
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21st July 2010
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PERTH (miningweekly.com) – ASX-listed Northern Star Resources on Wednesday reported that shareholders of Toronto-based Intrepid Mines had approved the A$40-million sale of the Paulsens gold mine, in Western Australia.

Meanwhile, financier RMB Resources has also agreed to provide finance for the acquisition.

“The two approvals pave the way for Northern Star to benefit handsomely from the A$44-million in surplus cash flow which Paulsens is forecast to generate in stage one alone,” said Northern Star MD Bill Beament.

In June, Northern Star and Intrepid struck a new deal around the Paulsens mine, after negotiations faltered when Intrepid withdrew support for the sale.

The Canadian miner said at the time that the mine’s projected cash flow had increased by 75%, or some $19-million. The stage-one production plan for the Paulsens mine forecasted that gold production would be around 51 000 oz, over a nine-month period, 8 000 oz higher than previously anticipated.

Northern Star had initially offered A$27-million for Paulsens, but upped the offer to A$40-million.

The purchase consideration includes a $18-million cash payment, a $200 royalty for each ounce of gold sold from June 1, subject to a maximum of 51 000 oz, a top-up cash payment of $2,5-million contingent upon gold production reaching 57 500 oz, and an additional top-up payment of $2,5-million contingent upon gold production totalling 62 500 oz.

Intrepid also had the option to purchase the Paulsens plant and infrastructure for $1 in the event that the 62 500 oz gold production is achieved, or the top-up cash payments are not made.

Beament said on Wednesday that the acquisition transaction would now be completed by the end of July.

“Completion of the acquisition will also enable Northern Star to proceed with an aggressive exploration plan aimed at growing the reserve and resource inventory through in-mine, near-mine and regional exploration.”

Northern Star shareholders were expected to vote on the acquisition during a meeting scheduled for July 26.

Edited by: Mariaan Webb

 

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