Northern Star Resources has shed the Paulsens and Western Tanami gold projects from its portfolio after divesting the assets to Black Cat Syndicate for $44.5 million.
The transaction comprises $14.5 million in cash to be paid at the completion of the sale, $15 million to be paid on June 30, 2023, and $10 million to be paid through four performance-related payments.
In the situation Paulsens achieves both 5000 and 50,000 ounces of refined gold following the sale, $2.5 million will be paid for each milestone. The same goes for Western Tanami.
Northern Star will also be issued 8.34 million Black Cat shares at $0.60 per share as part of the transaction.
“The sale of Paulsens, our foundation asset, and the Western Tanami gold project align with Northern Star’s five-year strategic plan to generate superior shareholder returns through active and disciplined portfolio management,” Northern Star managing director Stuart Tonkin said.
“We are delighted that Black Cat, which has a proven track record as a responsible operator and successful explorer, intends to undertake extensive exploration at each operation to provide a potential future redevelopment path for the benefit of all stakeholders.”
The divestment is subject to various conditions. Black Cat will need to raise at least $25 million through an equity raise by June 15, 2022, while shareholder approval will be required for the issued shares to Northern Star as part of the transaction.
The sale is expected to be completed by June 2022.
Despite the sale, Northern Star will retain its presence in the Tanami region of Northern Territory. The gold miner will maintain its 50 per cent interest in the Central Tanami joint venture and 100 per cent interest in a portfolio of Tanami exploration tenure.
Paulsens and Western Tanami are currently on care and maintenance.