Northern Star Resources (NST) has agreed to acquire Strickland Metals’ interests in the tenements comprising the Millrose project for A$61m ($45m).

Under the terms of the agreement, NST will acquire the company’s interest in the Millrose Project, with a Mineral Resource comprising 6Mt@1.80g/t Au for 346,000 ounces.

Strickland Metals will receive an initial cash deposit of A$2m, on the execution of the agreement, and a cash consideration of A$39m upon completion.

The company’s shareholder will receive 1.5 million fully paid ordinary NST shares, to be issued on completion of the transaction, subject to 12 months escrow.

If the transaction is not completed, the deposit will convert into a loan which will be repayable by Strickland Metals within 30 days from the date of termination.

The transaction is expected to be completed within 30 business days, subject to limited conditions, which are consistent for a transaction of this nature.

Strickland Metals CEO Andrew Bray said: “We are very pleased to deliver such a transformative sale for shareholders in a relatively short period of time. The Millrose Project was purchased for $10m in mid-2021.

“After a highly successful 11-month drilling campaign throughout 2022 costing about $16m, we are now selling the project for around $61m, generating an approximate $35m profit for the company.

“We are also exceedingly pleased that we have been able to deliver such a strong outcome for shareholders given the ongoing difficult market conditions for junior exploration companies.”

The Millrose project is located south of Strickland’s Horse Well gold resources, next to the Yandal East project in Western Australia.

The 600km² project has nine exploration licences and one mining lease application, with minimal exploration at the site for the past 15 years.

Strickland Metals will retain its Horsewell, Dusk til Dawn, Yandal East, Baxters and Iroquois projects, with an Inferred Mineral Resource comprising 5.77Mt@1.40g/t for 257,000 ounces.

The retained projects are located close to the Millrose project, in the highly gold prospective Yandal Greenstone Belt in Western Australia.

Strickland intends to use proceeds from the transaction to undertake large-scale reverse circulation drilling and diamond drill programmes at its retained assets.

Andrew Bray added: “This transaction leaves Strickland in the highly envious position of having one of the strongest balance sheets in the junior exploration space.

“We are confident of advancing and upgrading a number of additional gold prospects along strike to a standard similar to Millrose.

“Horse Well, Cowza and several other prospects will be the immediate focus of upcoming gold exploration programs. The company will also be able to expedite some exploration programs around the highly encouraging Iroquois base metal discovery.”