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Northern Star to buy Newmont Goldcorp's 50% stake in Super Pit for US$800M

Northern Star Resources Ltd. said Dec. 16 that it reached a deal with Newmont Goldcorp Corp. to acquire the latter's 50% stake in the Kalgoorlie Super Pit gold mine in Western Australia, plus associated assets, for US$800 million.

The mine is a 50/50 joint venture between Newmont Goldcorp and Saracen Mineral Holdings Ltd. through Kalgoorlie Consolidated Gold Mines Pty. Ltd. In November, Saracen acquired its 50% stake in the Super Pit mine from Barrick Gold Corp. for US$750 million.

Prior to Barrick's deal with Saracen, Northern Star was said to be a prime candidate to acquire Barrick's stake in the Super Pit mine.

Northern Star will fund the deal through a combination of new secured debt facilities of A$480 million with an existing lending group, a fully underwritten institutional placement of approximately A$765 million, existing cash reserves of A$5 million, and a share purchase plan that seeks to raise up to A$50 million.

Newmont Goldcorp said separately that Northern Star also secured a 120-day option to negotiate the purchase of the former's Kalgoorlie power business for fair market value. The US$25 million purchase price for the associated assets will be credited against the final purchase price or returned to Northern Star, should it be sold to a third party.

The sale, which is expected to be completed by early January 2020, increased Newmont Goldcorp's proceeds from asset sales this year to US$1.4 billion.

In recent years, the Super Pit has been underperforming, as costs have soared with lower production forecast in the wake of a pit wall failure in May 2018.