Northern Star Resources has secured $765 million from shareholders to help fund its $US800 million ($1.17 billion) acquisition of Newmont Goldcorp’s share in Kalgoorlie Consolidated Gold Mines (KCGM).
The placement, which includes 85 million shares at the issue price of $9 per new share, was heavily over-subscribed and highlighted strong support for the purchase.
Northern Star will use the funds to assist in the acquisition of Newmont Goldcorp’s 50 per cent stake in the Super Pit ($US775 million) and other associated assets ($US25 million).
The associated assets comprise of Kalgoorlie tenements owned by Newmont, a transitional services arrangement and a $US25 million conditionally refundable option arrangement to acquire Newmont’s power business, which supplies power to KCGM.
Northern Star’s half-share of one of the most significant gold systems in the world is set to offer gold content of 45,000 to 60,000 ounces per vertical metre.
The final conditional stages of the acquisition have been completed, with consent from the WA Minister of Lands having been received on December 17 2019.
Northern Star chairman Bill Beament said the strong support for the equity raising reflected KCGM’s potential for the company’s shareholders.
“The deal is earnings-accretive for Northern Star from the first full financial year of ownership and it will immediately increase our free cashflow,” Beament said.
“The acquisition also comes with huge growth potential via further optimisation of the open put and the development of underground operations.”