Northern Star Resources and Newmont Mining have entered into a binding agreement whereby Northern Star will buy Newmont’s Jundee underground gold mine in Western Australia for total proceeds of about $91 million, comprised of cash at closing of approximately $77 million plus a further payment of approximately $14 million for working capital. Closing is expected to occur by early July.

The agreement, announced on May 13, represented Northern Star’s fourth purchase of a gold mine in Western Australia in a period of less than five months. In December 2013, the company purchased the Plutonic mine from Barrick Gold for A$25 million, and in January 2014, it purchased Barrick’s 51% interest in the East Kundana joint venture (EKJV) and its Kanowna Belle gold mine for A$75 million (E&MJ, February 2014, p. 18).

Prior to the acquisitions, Northern Star was a one-mine company, owning and operating the Paulsens underground gold mine in Western Australia and producing about 100,000 oz/y of gold. Following the Jundee acquisition, its production will rise to more than 550,000 oz/y of gold.

Jundee will become the largest mine in Northern Star’s portfolio. The mine produced 279,000 oz of gold in 2013 and is expected to produce more than 200,000 oz/y over the next two years. Jundee’s all-in sustaining cost in 2013 was about A$930/oz.

At year-end 2013, Jundee had reserves of 411,000 oz at 4.3 g/mt gold and resources, including reserves, of 507,000 oz at 4.4 g/mt gold. Northern Star sees outstanding potential for growing these resources through in-mine and near-mine exploration.

Jundee is located 520 km north of Kalgoorlie.