Northern Star Resources will no longer pursue its joint venture (JV) with Osisko Mining regarding the development of the Windfall gold project in Quebec, Canada.
In December, the gold miner signed an agreement with Osisko for the raising of $C154 million ($169 million) through a convertible senior unsecured debenture, with a maturity date of December 1, 2025.
The debenture carried an interest rate of 4.75 per cent a year payable semi-annually and could have been converted by Northern Star into a JV interest any time after December 1, 2022, at a conversion price of $C4 per Osisko share, subject to certain conditions.
Northern Star also had the right to earn up to a 50 per cent stake in Windfall as part of the agreement. While Northern Star won’t pursue its Windfall buy in, it will continue to hold the debenture.
“Following extensive due diligence, Northern Star was unable to agree mutually acceptable terms with Osisko,” Northern Star managing director Stuart Tonkin said.
“Northern Star appreciates the opportunity and professional co-operation provided by Osisko for Northern Star to evaluate the Windfall project.
“Northern Star is disciplined in its review of acquisition opportunities with superior shareholder returns being its first priority. We continue to view the Windfall project in an extremely positive light and wish Osisko well in its development of Windfall.”
It comes as Northern Star reported a 63 per cent increase in revenue in the six months to December 31, 2021, compared to the corresponding 2020 half year.
This saw the company’s net profit after tax (NPAT) increase by 43 per cent ($261 million) across the same timeframe.
The gold miner experienced total revenue of $1.81 billion and cash earnings of $430 million for the second half of 2021.
The company attributed its revenue jump to an increase in gold sold, furthered by the contribution of assets from the merger with Saracen Minerals Holdings.
The Saracen merger was completed in February 2021 meaning no sales from the Thunderbox and Carosue Dam mines in Western Australia (previously owned by Saracen), and 50 per cent of Kalgoorlie Consolidated Gold Mines (KCGM), were included in the prior half year to end 2020.
Despite Northern Star’s relative windfalls, the company experienced a 103 per cent increase in cost of sales compared to the second half of 2020.