JOHANNESBURG (miningweekly.com) – ASX-listed Northern Star has opened a formal sale process for its Plutonic mine, after receiving unsolicited approaches from parties interested in acquiring the Western Australia-based gold mine.

Announcing the formal sale process, MD Bill Beament said on Wednesday that Plutonic’s performance had benefited from a programme of investment and development implemented over the past 12 months. 

The nearby Hermes deposit had also strengthened the outlook for Plutonic, with findings of a December 2015 scoping study indicating that Stage 1 mining at Hermes would produce 86 000 oz over a two- to three-year life at an all-in sustaining cost of A$1 095/oz. The Hermes deposit is located 60 km south-west of Plutonic.

The expected production from Hermes would increase Plutonic’s production from between 75 000 oz and 80 000 oz this financial year, to about 100 000 oz/y from the 2017 financial year.

Northern Star aims to grow its production to 700 000 oz/y from the 2018 financial year, up from the expected production of between 535 000 oz and 570 000 oz this year.

Beament said the buoyant Australian-dollar gold price meant demand for projects was strong.

“Plutonic’s costs have fallen substantially in the last quarter and we are confident that this turnaround will continue as our investment in capital development flows through.

“However, we have always said that we are a business first and a mining company second, and that return on equity is one of our key priorities. This philosophy means that it would be remiss of us if we didn’t consider whether a sale of Plutonic would be in the best interests of our shareholders,” he said.

Northern Star appointed PCF Capital Group to conduct the sale process, the outcome of which would be determined by whether any sale would realise a price which would deliver a superior commercial outcome for the company and its shareholders.