Australia’s Northern Star to buy gold mine in Alaska for $260 million
Australia’s Northern Star Resources (ASX:NST) is expanding overseas by acquiring Sumitomo Metal Mining Co and Sumitomo Corp’s Pogo underground gold mine in Alaska for $260 million.
Pogo, located southeast of Fairbanks city, is currently the eight largest gold mine in the US. It has produced 3.8 million ounces of gold over the past 12 years at an average mine grade of 13.6 grams per tonne.
The acquisition, said Northern Star, will add 250,000 to 260,000 ounces to its full-year 2019 guidance, boosting expected output to between 850,000 to 900,000 ounces at all-in sustaining costs of $1,050 to $1,150 per ounce.
Northern Star said Pogo had several key parallels with its Jundee mine, in Western Australia, at the time of that project’s acquisition.
The company plans to fund the acquisition through cash reserves and by raising about A$175 million ($128 million) through a placement.
Pogo rests in the Tintina mineral belt, a 200km-wide province that stretches 1200km across much of Alaska through to the south-eastern Yukon. Aside from holding large gold deposits, the area also hosts copper, lead, zinc, silver and tungsten.
Barrick Gold, Teck Resources, South32 and Newmont Mining are other miners operating in the region.