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Northern Star’s new $67 million gold project

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Northern Star Resources has announced the purchase of the Millrose gold project from Strickland Resources for $67 million. The deal comprises $41 million in cash and 1.5 million fully paid shares in Northern Star.

The WA gold project has a known mineral resource of 346 thousand ounces of gold at a grade of 1.80 grams per tonne.

Millrose is located 40km to the east of Northern Star’s Jundee operations. According to the company, Millrose will become a supplementary feed source for the Jundee mill in the medium term, complementing Jundee’s underground base load.

Jundee underground operations currently source roughly 1.8 million tonnes of ore each year.

Northern Star managing director Stuart Tonkin reacted to the agreement.

“The acquisition of the Millrose gold project presents a very compelling development opportunity that is accretive to the Jundee life of asset plan as it should deliver us a sizeable low cost, high grade supplementary resource feed.

“This bolt-on acquisition, which also comes with significant brownfields exploration upside, will provide us with further confidence to plan organic and profitable growth for Jundee, which already is the lowest cost asset in our tier-1 portfolio.”

Strickland has advised its shareholders of exactly how it intends to spend its new funds.

Within the first twelve months, Strickland plans to undertake 3500m of diamond drill and 25,000m of reverse circulation drilling. The company also intends to upgrade its portfolio of gold prospects to mineral resource status, as well as continue base metal exploration at its Iroquois zinc-lead project.

In the same announcement, Northern Star indicated that it was strengthening renewable energy at its Jundee operation. The company has entred into a long-term power supply agreement with Zenith Energy, which incorporates 40 megawatts of wind and solar generation.

Once completed, this will provide 56 per cent of the mine site’s power.

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