Northern Star Sells Mt Olympus Gold Project (ASX:NST)

Northern Star Resources Ltd’s [ASX:NST] share price is up today at $13.54, up from $13.03 on Friday at time of writing.

Northern star is an Australian gold producer with a $9.64 billion market cap. The company holds assets in both Australia and Alaska which include Jundee, Pogo and Tanami.

What’s going on with Northern Star?

Northern Star announced today it’s selling their Mount Olympus Project in WA to Kalamazoo Resources Ltd [ASX:KZR], another Australian gold explorer and developer. KZR will acquire the project through a deferred contingent cash consideration of $17.5 million.

The deal consists on $5 million for the first $250,000 tonnes of ore produced and a 2% Net Smelter Royalty (NSR) on the first 250,000 ounces of gold produced, which is worth about $12.5 million at the current spot gold price of $2,500.

Northern Star will also receive a 0.75% NSR on any gold produced later and the same NSR applies to any other metals produced from the tenements.

Northern Star got the project in 2011 but set it aside in 2013. The Ashburton project contains mineral resources of 20.79 Mt @ 2.45 gpt gold containing1.65 Moz with the majority in Mount Olympus, as you can see below.

ASX NST Share Price Impacted By Gold Projects
Source: Kalamazooo

Bill Beament, Northern Star’s Executive Chair had this to say:

The Ashburton Project no longer fits in Northern Star’s portfolio but still has strong potential on both the exploration and production fronts. The royalty structure also enables Northern Star to retain an exposure to the project.

At time of writing, Kalamazoo shares hadn’t moved and were still trading at $48.5 cents.

What’s next for the NST share price?

Investors have liked Northern Star’s move with shares increasing by 4%, at time of writing.

Fear from the pandemic has been pushing gold prices higher. So far this year gold has returned over 18% in Australian dollars.

One way to get exposure to gold is through gold stocks, but it’s not easy to pick the winners. That’s why Rum Rebellion’s Editor Greg Canavan has prepared a FREE report on ‘How to Pick Winning Gold Stocks’.

To download this report, click here.


Selva Freigedo

Selva Freigedo is a research analyst for The Rum Rebellion.

Born in Argentina, her passion for economic analysis started at a young age. Her father was an economist for the Argentinean governments and the family used to discuss politics and economics at the dinner table.

Argentina is a country with an unusual economic history. Growing up there gave Selva first-hand experience on different economic phenomena such as hyperinflation, devaluation and debt default.

Selva has also lived in Brazil, Spain and the USA.

Back in 2000 she was living in the US as the dot com bubble popped…
And in 2008 she was in Spain as the property market exploded and then collapsed…

She has seen first-hand what happens when bubbles burst.

Selva joined Fat Tail Investment Research’s team in 2016, as an analyst. She now writes from her vantage point in Australia, where she settled in 2015.

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