Black Cat Syndicate has completed its acquisition of Northern Star Resources’ Coyote and Paulsens gold operations in Western Australia, accelerating its ambition of becoming a mid-tier gold producer in the process.
The transaction involved the payment of $14.5 million in cash on completion of the sale, $15 million to be paid on June 30 2023, and $10 million through four performance-related payments.
Northern Star has also been issued approximately 8.3 million Black Cat shares, subject to voluntary escrow until June 30 2023.
Both on care and maintenance, Coyote and Paulsens have been key gold producers in the past and will return to action within a few years under Black Cat’s restart plans.
Since beginning production in 2006, the Coyote open-pit and underground mines have produced 211,220 recovered ounces of gold at 4.9 grams per tonne (g/t) at an average of approximately 35,000 ounces per annum.
Paulsens has produced 907,344 recovered ounces of gold at 7.3 g/t gold since first production in 2005.
Black Cat said it would commence a drilling program at Coyote in July, with Paulsens to follow in September. Initial exploration will focus on near-mine extensional drilling to grow the respective resources.
“With the acquisition of Coyote and Paulsens completed, we will now focus on significant drilling campaigns at both operations to grow and upgrade the current high-grade resources,” Black Cat managing director Gareth Solly said. “Drilling results from this activity will be released regularly throughout 2022.
“Concurrently, Black Cat’s management team will be assessing the substantial infrastructure and completing studies aimed demonstrating the inherent value underpinning these established, low-capital restart operations.”
Coyote and Paulsens boast existing processing facilities and ancillary infrastructure, enhancing the capital profile of the assets.
Northern Star managing director Stuart Tonkin said Paulsens was an important asset for the company in the early going.
“Paulsens was Northern Star’s foundation asset and contributed immensely to our successful growth into a global gold producer,” Tonkin said. “The dedication of our workforce to establish significant cashflow generation based on Paulsens enabled the future growth of Northern Star to what it is today.”