Northern Star To Buy Barrick Gold's Plutonic Gold Mine For A$25 Mln

(RTTNews) - Canadian gold producer Barrick Gold Corp.(ABX, ABX.TO) announced that it has agreed to divest its Plutonic mine in Western Australia to Northern Star Resources Ltd (NST.AX) for A$25 million, subject to certain closing adjustments. The transaction is expected to close in February, 2014.

Northern Star Resources said that the deal will double its annual gold production to about 200,000 ounces a year and would boost Northern Star's total resources inventory to four million ounces

Northern Star said the purchase, which would be funded from its existing cash pile of $45 million. Northern Star already produces about 100,000 ounces a year from its existing Paulsens gold mine, also in the Pilbara. The purchase price was equal to $14 per resource ounce, based on Plutonic's known resource of 1.75 million ounces at 10.8 grams per tonne.

The acquisition price includes a fully operational mine with a 3mtpa processing plant, an underground mobile fleet, a 15 megawatt gas-fired power station, an eight megawatt diesel back up station and a 600-person accommodation village.

Northern Star's chief operating officer Stuart Tonkin succeeded Bill Beament at Plutonic for two years while Northern Star's business development and technical services manager Bernie Sostak was chief geologist at Plutonic for eight years.