Westgold Resources has announced that it is selling its South Kalgoorlie Operations (SKO) to Northern Star Resources in an attempt to focus efforts on its more profitable Murchison assets.
SKO, wholly owned by Westgold, is a collective of smaller companies including Dioro Exploration, HBJ Minerals and Hampton Gold Mining Areas; the group’s major output includes the Jubilee Mill, HBJ underground mine, and numerous open pits that have been mined since the late 1980s.
Westgold purchased SKO from previous owner Alacer in 2013. As of June 2017, SKO had an estimated 252,000 ounces (oz) of ore reserves.
Northern Star will pay $80 million for SKO, comprising of $20 million in cash and $60 million in unrestricted, fully paid Northern Star shares. Westgold will maintain lithium royalties at the Mt Marion lithium mine and lithium exploration and mining rights over two separate locations (53 and 59) as part of the deal.
Peter Cook, managing director of Westgold, called the agreement a nice deal for both parties.
“[The deal] provides Northern Star with additional and instant plant capacity in the Kalgoorlie region for its expanding gold operations,” he said. “For Westgold, it divests our shortest life asset, provides a cash boost and upgrades the overall quality of our gold portfolio.”