Super Pit Australian-owned as Northern Star closes deal

Northern Star Resources has confirmed it is the new owner of a half stake in Kalgoorlie-Boulder’s famous Super Pit, with the gold miner announcing an $US800 million ($1.16 billion) deal with Newmont Goldcorp.

The deal will be funded by a combination of $480 million in debt, a $765 million institutional placement and a $50 million share purchase plan.

In addition to the 50 per cent interest in Super Pit operator Kalgoorlie Consolidated Gold Mines, Northern Star has acquired a separate parcel of nearby tenements, and an option to acquire the Newmont Power business that supplies electricity to the mine.

Executive chairman Bill Beament said the acquisition would deliver substantial value to Northern Star.

“The purchase of a 50 per cent stake in the Kalgoorlie Super Pit meets our key strategic objectives of generating strong financial returns and growing our gold inventory from tier-one mines in tier-one locations,” Mr Beament said in a statement to the ASX. 

“This is one of the world’s greatest gold systems, as shown by its 80 million ounce endowment and the fact that it contains up to 60,000oz per vertical metre.

“To put this in context, our Jundee mine, which in itself is a tier-one asset, contains around 13,000oz per vertical metre.”

Mr Beament said Saracen Mineral Holdings, which recently acquired the other 50 per cent stake in the mine, was an “outstanding” joint venture partner.

“Both companies have established outstanding track records of unlocking value from acquisitions and I am delighted that we will be able to pool our skills and experience to create substantial value for our shareholders and the local community through both mine development and exploration.”

Northern Star’s $765 million placement and its $50 million share purchase plan will be priced at $9 per share, a 6.7 per cent discount to the company’s last closing price of $9.65/share.

Completion of the acquisition is subject to approval from Lands Minister Rita Saffioti.

Macquarie Capital is acting as Northern Star’s financial adviser, with Cannacord Genuity its joint lead manager.

Ashurst has provided legal advice to the deal.