Northern Star Resources Ltd. (NST) agreed to buy Barrick Gold Corp. (ABX)’s Kanowna assets in Australia for A$75 million ($66 million) as the world’s biggest gold miner focuses on lower-cost operations.
The sale of the operations in Western Australia should be completed in March, Northern Star said today in a statement. The Perth-based company agreed last month to a A$25 million deal with Barrick for its Plutonic mine.
Barrick announced deals to divest assets worth about $850 million in the past six months, it said in a separate statement. The Toronto-based producer agreed in October to sell three Australian mines to Gold Fields Ltd. for $300 million under a strategy to cut costs after gold slumped 28 percent last year, its first annual decline since 2000.
“Northern Star’s management team has a proven track record in extracting significant value from underground mining operations of this scale,” the Australian company said in the statement. Managing Director Bill Beament and Chief Operating Officer Stuart Tonkin have both worked on operations at Kanowna Belle in previous jobs, Northern Star said.
Kanowna, which includes the Kanowna Belle underground mine and mill, a 51 percent stake in the East Kundana joint venture with Tribune Resources Ltd. and Rand Mining Ltd., produced about 225,000 ounces of gold in 2013, Barrick said.
Northern Star, which produced 103,566 ounces in the 12 months to June 30, will fund the purchase from a combination of A$15 million cash, a A$50 million debt facility and proceeds from a planned A$100 million equity raising, the company said.
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