JOHANNESBURG (miningweekly.com) – ASX-listed gold miner Northern Star Resources has doubled the size of its share purchase plan (SPP), which closed on February 19, from $15-million to $28.9-million, in response to demand from shareholders, the company announced on Thursday.

“We opted to increase the amount we took under the SPP because we wanted to give shareholders the best possible chance to be a part of our growth,” said Northern Star MD Bill Beament.

The proceeds of the SPP would be applied to increase the company’s working capital position and the cost of acquiring Western Australia-based gold mines Kanowna Belle, east of Perth, and Kundana, west of Kalgoorlie, from the world's largest gold producer Barrick Gold. The acquisition cost was due to be settled on March 1.

“The strong response to the SPP reflected shareholders’ support for the acquisitions, which will more than triple the company’s production to over 350 000 oz/y of gold,” said Beament.

He explained that, given that this was the first time Northern Star had raised money from retail investors since it acquired the Paulsens gold mine, in Western Australia, in 2010, “we were keen to provide shareholders with this opportunity, particularly given the extent to which demand exceeded our initial limit.”

The company received valid applications representing about $43.3-million and had determined to increase the cap to partially accommodate the substantial requests.

Northern Star would issue about 33.6-million shares at $0.86 per share under the SPP.

“[However], even with the increased cap on proceeds, there will be a scale-back on the participation amount per shareholder by about one-third. This scale-back will be applied equally to all valid applications received under the SPP,” the company pointed out.

The company planned to issue SPP shares on February 27, provide a quotation of SPP shares expected and dispatch holding statements on February 28.

Refunds resulting from the validation process and scale-back would be dispatched to shareholders starting the week of March 3.