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UPDATE 1-Australia's Northern Star to buy 50% stake in KCGM for $800 mln

Published 17/12/2019, 10:56 am
UPDATE 1-Australia's Northern Star to buy 50% stake in KCGM for $800 mln

(Adds details of deal, background)

Dec 17 (Reuters) - Gold miner Northern Star Resources Ltd NST.AX said on Tuesday it had entered into an agreement with the Australian unit of Newmont Gold Corp NEM.N to buy a 50% stake in Kalgoorlie Consolidated Gold Mines (KCGM) for $800 million.

KCGM is a joint venture between Newmont and Saracen Mineral Holdings SAR.AX and owns the Super Pit in Kalgoorlie, Western Australia, among other deposits. Super Pit is the biggest open pit gold mine in Australia.

Last month, Saracen became the joint venture partner after Barrick sold its 50% share of KCGM.

Northern Star said it would fund the deal through A$480 million ($325.73 million) in debt, A$765 million institutional placement and a share purchase plan targeting to raise up to A$50 million.

The Western Australia-based company said the acquisition would be accretive to its earnings per share in the first full financial year of ownership.

Gold miners have been on a deal-making spree to boost their waning reserves amid higher bullion prices.

On Monday, Canada's Equinox Gold Corp EQX.TO said it would buy rival Leagold Mining Corp LMC.TO for $578 million.

Early this year, Newmont announced a $10-billion takeover of Goldcorp Inc G.TO , on the heels of Barrick Gold's ABX.TO purchase of Randgold Resources (LON:RRS).

In Australia, Evolution Mining Ltd EVN.AX bought a 19.9%stake in smaller peer Tribune Resources Ltd TBR.AX .

($1 = 1.4736 Australian dollars)

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