Northern Star Minerals has divested its Mt Olympus project, part of the Ashburton gold project in Western Australia, to Kalamazoo Resources for $17.5 million.
The cash consideration includes $5 million mining of the first 250,00 tonnes ore and a 2 per cent net smelter royalty on the first 250,000 ounces of gold produced plus a 0.75 per cent net smelter royalty on further gold produced from the tenements.
Northern Star will receive the same net smelter royalty’s for other metals produced from the tenements as well.
According to Northern Star executive chair Bill Beament, the Ashburton project does not align with other assets in its portfolio.
“The Ashburton Project no longer fits in Northern Star’s portfolio but still has strong potential on both the exploration and production fronts,” he said.
“The royalty structure also enables Northern Star to retain an exposure to the project.”
The divestment is set to be completed on the conditions of Ministerial approval and third party rights.
Northern Star first acquired the gold Ashburton project in 2011.