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July 23, 2021

Northern Star agrees to divest Australian assets to Evolution Mining

The all-cash deal of $294.78m will help Northern Star advance its pipeline of growth projects.

Australian gold producer Northern Star Resources has agreed to divest its Kundana gold assets in Western Australia to Evolution Mining in an all-cash deal worth $294.78m (A$400m).

The assets being divested under the binding share and asset sale agreement include Northern Star Resources’ 100% stake in Kundana operations, 100% interest in tenements comprising the Carbine project, 51% stake in East Kundana Joint Venture (EKJV) and 75% interest in the West Kundana Joint Venture (WKJV).

The Kundana operations comprise the Millennium, Pope John and Moonbeam underground operating areas.

With this deal, Evolution will hold operatorship in the EKJV, which is an unincorporated joint venture between Northern Star Resources, Rand Mining and Tribune Resources.

EKJV has three primary underground mines – Rubicon, Hornet and Pegasus.

The Carbine Project, where four open pits are being planned, is located to the north of Kundana, close to Evolution’s Castle Hill deposits.

In the financial year of 2021, the Kundana assets posted production of 120,943oz with an estimated combined resource of 2.4Moz, which includes reserves of 579,000oz.

Evolution Mining said that these assets, which are located within 8km of its Mungari Operations, provide it with an opportunity to consolidate the region and seize significant operational synergies.

Evolution executive chairman Jake Klein said: “This is a pivotal transaction that will transform Mungari to establish the operation as the fourth cornerstone asset in the Evolution portfolio.

“It presents a unique strategic opportunity for Evolution to consolidate the Eastern Goldfields region given our existing presence at Mungari, resulting in Evolution being one of the largest tenement holders in the Kalgoorlie region.

“The transaction improves Mungari on a production, mine life and mineral resources basis.”

Northern Star Resources plans to use the proceeds from the sale for advancing its pipeline of growth projects.

Northern Star managing director Stuart Tonkin said: “The sale of these assets is consistent with our strategy to employ capital where we believe it will generate the greatest return. This is a great outcome for all stakeholders, including all our employees working at these assets, who will be offered continuity under Evolution’s ownership.”

Evolution will provide employment contracts to Northern Star’s employees and also assume liabilities for all transferring employees.

Completion of the deal, which is subject to ministerial consent to the transfer of six mining tenements, is expected in late August.

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