Intrepid Mines shareholders have approved the $40 million sale of the Paulsen's Gold Mine to Northern Star Resources.
Intrepid Mines shareholders have approved the $40 million sale of the Paulsens Gold Mine to Northern Star Resources.
RMB Resources has also approved the provision of funding to Northern Star for the acquisition.
Northern Star expects the mine to provide the company with $44 million in surplus cashflow in the first stage.
The company's shareholders will meet next Monday to vote on the acquisition.
The deal is expected to be done by the end of the month.
See full statement below:
Northern Star Resources Ltd (ASX: NST) is pleased to announce that Intrepid Mines shareholders today approved the sale of the Paulsens Gold Mine in Western Australia to Northern Star for $40 million.
Northern Star is also pleased to report that RMB Resources has approved the provision of funding to Northern Star for the Paulsens acquisition (See ASX announcement of June 30, 2010 for full details).
The two approvals pave the way for Northern Star to benefit handsomely from the $44 million in surplus cashflow which Paulsens is forecast to generate in Stage One alone (June 2010 - February 2011).
Northern Star shareholders are due to vote on the acquisition at a meeting on July 26, 2010. The Company recently released a supplementary notice of meeting to deal with the resolutions associated with the transaction.
Northern Star reminds shareholders that the proxies for the meeting need to be submitted before 12pm Saturday July 24.
Completion of the transaction and possession of the mine is now scheduled for July 30, 2010.
Northern Star revealed last month that an updated Stage One plan for Paulsens forecast that gold production in this nine-month period would be 8,000 ounces higher than initially expected now at 51,000oz.
This meant the project @ A$1,400/oz gold price was now forecast to generate $44m in surplus cashflow before debt and royalty payments, $19m more than originally predicted.
Completion of the acquisition will also enable Northern Star to proceed with an aggressive exploration plan aimed at growing the reserve and resource inventory through in-mine, near-mine and regional exploration.
Paulsens is a high-grade, low cost mine which has yielded more than 370,000 ounces at an average cash operating cost of less than A$550/oz since commencing production in 2005. The acquisition will give Northern Star a direct entry into the Australian gold business and will provide the Company with immediate cashflow following settlement on July 30, 2010.
