Northern Star Resources has agreed to acquire the Kurnalpi gold project in the Kalgoorlie region of Western Australia from KalNorth Gold Mines for $18 million.
The sale includes three mining leases at Kurnalpi.
The project was put to sale due to restricted exploration activities and lack of funding and new investors.
“The directors are strongly of the view that this sale transaction to NSCD represents the best outcome for the group’s realisation of value from the Kurnalpi project and will be recommending that shareholders approve the sale of the Kurnalpi project,” KalNorth stated.
KalNorth directors have not set a date to consider the transaction with company shareholders, but expects a meeting to be held in late April or early May.
The Kurnalpi project is 74 kilometres from Northern Star’s Carosue Dam gold operation, which was acquired after merging with Saracen Mineral Holdings last year.
The company produces around 250,000 ounces of gold per annum at Carosue Dam.
In the 2020 financial year, Carosue Dam produced 203,281 ounces of gold at an all in sustaining cost of $1,263 per ounce.
Northern Star has a $101 million exploration budget in the 2021 financial year.
KalNorth previously announced the sale of the Lindsay’s project in Western Australia, the only other project listed by the company, to Nu Fortune Gold for $2.4 million.
In the company’s December 2020 quarterly activities report, KalNorth reported a $90,000 spending on exploration and evaluation.
The Kurnalpi project has been subject to historical, small-scale gold mining, with other companies completing work prior to KalNorth.
Small to moderate size mineral resources have been defined in the area of the project.