Northern Star offers to buy 49% stake in East Kundana joint venture

13 November 2018 (Last Updated November 20th, 2018 05:44)

Northern Star Resources has made binding proposals to buy a 49% interest in the East Kundana Joint Venture (EKJV) underground gold mining project in Western Australia from Tribune Resources, Rand Mining and Rand Exploration.

Northern Star offers to buy 49% stake in East Kundana joint venture
Northern Star already holds a 51% stake in the East Kundana gold mine. Credit: James St. John.

Northern Star Resources has made binding proposals to buy a 49% interest in the East Kundana Joint Venture (EKJV) underground gold mining project in Western Australia from Tribune Resources, Rand Mining and Rand Exploration.

Northern Star already holds a 51% stake in the EKJV, which was acquired from Barrick Gold in March 2014.

The offers have a combined value of A$150m ($108.05m). Northern Star currently owns 10,000 shares in Tribune Resources and a 4.9% stake in Rand Mining.

Under the terms of the offers, Northern Star intends to buy Tribune Resources’ 36.75% stake in the EKJV for a consideration of A$112.5m ($81.04m) and the 12.25% stake held by Rand Mining and Rand Exploration for A$37.5m ($27.01m).

The joint venture is managed and operated by Northern Star subsidiaries. The company has the first right of refusal (ROFR) over the interests held in the project by Tribune Resources, Rand Mining and Rand Exploration.

Northern Star Resources executive chairman Bill Beament said: “The cash offer to acquire the assets is a direct and clear means for Tribune and Rand shareholders to unlock the value of their company’s interests.

“This combination of factors makes our offers a far simpler and more transparent opportunity for Tribune and Rand shareholders than alternative pathways.”

“Our offers are a far simpler and more transparent opportunity for Tribune and Rand shareholders.”

Subject to the receipt of shareholder and regulatory approvals, the closure of the transaction is expected to take place in January next year.

Located in the Eastern Goldfields, the East Kundana project comprises three producing underground deposits, Raleigh, Rubicon and Hornet. Ore from the mine is treated at Northern Star’s Kanowna Belle processing facility.

Acknowledging the offer made by Northern Star, Tribune Resources stated that it is currently assessing the proposal and would make a decision in due course.