Northern Star Resources has agreed to acquire Westgold Resources’ South Kalgoorlie operations for total consideration of A$80 million ($63 million). The acquisition includes the project’s operating processing facility, which has an annual capacity of 1.2 million metric tons (mt), a JORC resource of 4 million ounces (oz), including 250,000 oz in reserves and 800 square kilometers of prospective gold leases. The South Kalgoorlie operations, located 50 km from Northern Star’s Kundana operations, is currently producing at a rate of 30,000-40,000 oz/y. The plant is also toll-treating ore for third parties. The transaction is expected to be completed April 1.

The transaction amounts to A$60 million in Northern Star shares and A$20 million in cash. Northern Star Executive Chairman Bill Beament said the acquisition would be an economical means of ensuring the company met its 300,000-oz/y production target from organic sources at its Kalgoorlie operations.

“Our highly successful exploration strategy in Kalgoorlie has generated huge growth in our inventory and paved the way for us to grow production there to 300,000 oz/y,” Beament said. “To capitalize on this success, we were considering the option of expanding our Kanowna Belle facility.”

He added, “The South Kalgoorlie processing facility is one of the best-run facilities in the district and is well within trucking distance of our Kundana Operations.”