Northern Star Resources is seeking to take full ownership in the operational East Kundana gold mine by offering to buy out the 49% stake it does not own from its joint venture partners.
Image: Northern Star seeks to acquire 100% stake in East Kundana gold mine. Photo: courtesy of etaphop photo/ FreeDigitalPhotos.net.
The other partners in the East Kundana gold mine, located in Western Australia, are Tribune Resources, Rand Mining and Rand Exploration. While Tribune Resources holds a stake of 36.75, Rand Mining and Rand Exploration hold a combined 12.25% in the underground gold mining project located in the Eastern Goldfields, 25km north-west of Kalgoorlie.
Northern Star Resources has offered to buy out Tribune Resources’ stake for A$112.5 m ($80.9m) and the combined stake held by Rand Mining and Rand Exploration for A$37.5m ($26.97m).
Tribune Resources, in a statement, said: “The Board of Tribune is currently assessing the offer and consulting advisors with regards to delivering maximum value to shareholders.
“Further announcements will be made once the Company has formed an opinion and response to the offer.”
With a stake of 51%, Northern Star Resources is the operator of the Australian gold mine. The stake was secured by the company through the acquisition of Gilt-Edged Mining from Barrick Gold in 2014. The mine is owned by the East Kundana Joint Venture (EKJV) formed in 2002 which comprises the three partners.
Subsidiaries of Northern Star Resources are the manager, mine operator and life of mine ore processor EKJV, in addition to providing all personnel for the mine’s operations.
Northern Star Resources, which is shareholder in both Tribune Resources and Rand Mining, said that its proposals are a “fair and sensible outcome” for shareholders of both the firms.
Northern Star Resources chairman Bill Beament said: “The $150 million price offers compelling, up front value to Tribune and Rand. “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.”
The East Kundana gold mine is made up of three producing underground deposits, namely Raleigh, Rubicon and Hornet. According to Northern Star Resources, the primary host structure at Rubicon, Hornet, and the nearby Pegasus (K2) deposit is a steeply west-dipping laminated shear vein that ranges generally 0.3-0.8m in thickness.