Northern Star Resources has agreed to buy the South Kalgoorlie gold mine from Westgold Resources for $80 million.
The acquisition of the South Kalgoorlie operations, located in Western Australia and about 50 kilometres from Northern Star’s Kundana operations, includes the project’s operating processing facility and 800 square kilometres of prospective gold tenure.
Northern Star executive chairman Bill Beament said the deal will help ensure the company meets its production target from organic sources.
“Our highly successful exploration strategy in Kalgoorlie has generated huge growth in our inventory and paved the way for us to grow production there to 300,000 ounces per annum,” Mr Beament said in a statement on Thursday.
“To capitalise on this success, we were considering the option of expanding our Kanowna Belle facility.
“However, the South Kalgoorlie Operations purchase will enable us to achieve our organic growth target in a more timely and economical fashion and at the same time provide us with significant exploration potential, including a resource inventory.”
Westgold said the divestment of its South Kalgoorlie operations will allow the company to focus on its gold assets in the Murchison goldfields of Western Australia.
Westgold Managing director Peter Crook said it was a “nice deal for both parties”.
“It provides Northern star with additional and instant plant capacity in the Kalgoorlie region for its expanding gold operations,” Mr Crook said.
“For Westgold, it divests our shortest life asset, provides a cash boost and upgrades the overall quality of our gold portfolio.”
The acquisition is due to be settled by April .