Northern Star buys Hermes from Alchemy
PERTH (miningweekly.com) – Gold miner Northern Star Resources has signed a series of agreements with fellow ASX-listed Alchemy Resources, which will result in the gold miner becoming that company’s largest shareholder.
Under the terms of the agreements, announced on Tuesday, Northern Star would purchase the Hermes gold project, which was within trucking distance of the Plutonic gold operation, in Western Australia, for A$1.45-million.
The gold miner would pay Alchemy a 1% net smelter royalty on all the refined gold recovered at Hermes in excess of 70 000 oz, and up to 90 000 oz.
The company would also acquire about A$500 000 of Alchemy shares, priced at 1.5c each, giving Northern Star a 15% shareholding in Alchemy.
Furthermore, Northern Star would earn up to an 80% interest in the remainder of Alchemy’s Bryah Basin project, also in Western Australia, by spending some A$400 000 a year on exploration, over a three-year period.
The Hermes project has a 212 000 oz gold resource, and Northern Star told shareholders on Tuesday that the company would immediately start an exploration programme to expand the resource and to bring it in line with Joint Ore Reserves Committee-compliant resource guidelines.
Alchemy noted that the development of the Hermes deposit would increase the chances of other projects in the Byrah Basin project area being mined, and in the event of a gold discovery during the farm-in period, the company would have the opportunity to enter into a production joint venture (JV).
Alchemy would retain its interest in the base metal prospective part of the Bryah Basin project, through a farm-in and JV agreement with the Independence Group.
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