PERTH (miningweekly.com) – Gold miner Northern Star Resources has priced $600-million of senior guaranteed notes in the US, due in April 2033.
The company said on Friday that it would use the proceeds from the notes for general working capital, which could include the expansion of the Kalgoorlie Consolidated Gold Mines (KCGM), if and when a final investment decision is made.
“We are pleased with the investment grade ratings assigned to Northern Star, which reflect the strength and resilience of the business and our disciplined approach to capital management. Our continued performance and strong financial position have enabled Northern Star to successfully access the US bond market for the first time,” said MD Stuart Tonkin.
“Proceeds from the notes will provide Northern Star with further depth and flexibility of funding as we increase profitable production to two-million ounces a year by 2026 and consider other organic growth opportunities including the mill optimisation at KCGM.”
The company last year released a prefeasibility study (PFS) on the expansion of KCGM production, which investigated three options: increasing capacity from the current 13-million tonnes a year to 17-million tonnes a year through a bolt-on expansion, or 24-million tonnes a year through the refurbishment of 70% of the process plant, or expanding it to 22-million tonnes a year through a total rebuild.
The PFS found that all three mill expansion options were financially compelling, delivering internal rates of return of between 13% and 26%, and pay-back periods of between three to five years, with capital costs estimated at between A$440-million and A$1.4-billion.
With the expansion of the mill, gold production from KCGM could grow between 100 000 oz/y and 200 000 oz/y, while all-in sustaining costs could reduce by up to A$200/oz.