Westgold Resources Ltd. agreed to sell its South Kalgoorlie
The sale is in line with Westgold's strategy to focus on its Murchison
Westgold will off-load subsidiaries Dioro Exploration Pty. Ltd., HBJ Minerals Pty. Ltd. and Hampton Gold Mining Areas Ltd. in return for A$20 million cash and A$60 million in Northern Star shares. The package includes the project's operating processing facility with an annual throughput capacity of 1.2 million tonnes and 800 square kilometers of prospective gold tenure.
Westgold will retain its lithium royalties on the Mount Marion lithium mine and the rights to lithium mining and exploration on Location 53 and 59.
The South Kalgoorlie project is producing between 30,000 and 40,000 ounces per annum. The plant is also toll treating ore for third parties.
Northern Star Executive Chairman Bill Beament said the acquisition would be an economical means of ensuring the company meets its 300,000-ounce-per-year production target from organic sources at its Kalgoorlie operations. The company is aiming to expand its production to 600,000 ounces per annum this year.
Northern Star is also considering expanding its Kanowna Belle gold facility in Western Australia, Beament said, adding that the acquisition will enable Northern Star to achieve its "organic growth target in a more timely and economical fashion" and provide it with significant exploration potential.
The transaction is expected to close April 1.
