PERTH (miningweekly.com) – Gold miner Northern Star Resources has struck a A$17.5-million deal with fellow-listed Kalamazoo Resources to divest of its Mt Olympus project, comprising most of the Ashburton project, in Western Australia.
Under the terms of the agreement, Northern Star would receive a A$5-million deferred cash consideration on mining of the first 250 000 t of ore, as well as a 2% net smelter royalty on the first 250 000 oz of gold produced, worth an estimated A$12.5-million using the current spot gold price, with a 0.75% net smelter royalty applicable on any subsequent gold production from the tenements.
“The Ashburton project no longer fits in Northern Star’s portfolio but still has strong potential on both the exploration and production fronts. The royalty structure also enables Northern Start to retain exposure to the project,” said executive chairperson Bill Beament on Monday.
Ashburton is estimated to host a total mineral resource estimate of some 20.7-million tonnes, grading 2.5 g/t gold for an estimated 1.6-million ounces, of which 541 000 oz is classified as indicated and 1.1-million ounces as inferred.
The divestment of the asset was subject to Ministerial approval and third party rights being observed.