Northern Star considers Plutonic sale

Northern Star Resources says it will consider the sale of its Plutonic gold mine near Meekatharra after receiving a number of unsolicited offers from interested parties.

But the local gold miner emphasised that the mine would only be sold if it were at a price that would deliver a superior commercial outcome.

Northern Star has engaged PCF Capital Group to conduct the formal sale process.

The company purchased Plutonic and the Kanowana Belle gold mines from Barrick Gold in 2014 for a combined $100 million.

Managing director Bill Beament said Plutonic’s performance was now benefitting from Northern Star’s investment and development program implemented over the past 12 months.

The company has also previously stated it is confident there is more gold to be found at Plutonic, after conducting a scoping study on its Hermes deposit, which lies just 60 kilometres south-west of the mine.

Northern Star purchased Hermes from Alchemy Resources early last year.

Mr Beament said the buoyant AUD gold price meant demand for gold projects was strong, but the company needed to take into account its desire to invest in Plutonic’s growth opportunities.

“Plutonic’s costs have fallen substantially in the last quarter and we are confident that this turnaround will continue as our investment in capital development flows through,” he said.

“However, we have always said that we are a business first and a mining company second, and that return on equity is one of our key priorities.

“This philosophy means that it would be remiss of us if we didn’t consider whether a sale of Plutonic would be in the interests of our shareholders.”

Northern Star shares were 0.2 per cent higher to $3.63 each at 10:30am.