Northern Star Resources scoops up Millrose Gold Project from Strickland Metals for $61 million, WA

Global miner Northern Star Resources (ASX:NST) has entered into agreements to acquire Strickland Metals’ (ASX:STK) Millrose Gold Project in Western Australia for $61 million.

Under the agreement, Northern Star will pay a $2 million cash deposit upon executing the agreement and a cash consideration of $39 million once the transaction is completed. Additionally, the company will issue 1.5 million shares to Strickland on completion, which will be subject to a 12-month escrow period.

If the transaction is not completed, the deposit will convert into a loan, which will be repayable by Strickland to Northern Star within 30 days of termination.

Northern Star expects Millrose to be a supplementary feed source for its Jundee mill in the medium term, complementing Jundee’s underground base lode. Additionally, Millrose lies 40km east of Jundee, which is considered a ‘key’ asset in Northern Star’s Yandal Production Centre.

Meanwhile, Strickland reports it will retain its Horse Well, Dusk til Dawn, Yandal East, Baxters, and Iroquois projects, which are proximal to Millrose, and will focus on ‘aggressively’ upgrading this portfolio of gold prospects to a similar standard to that of Millrose.

Within the 12 months following the transaction, Strickland intends to undertake 25,000m of reverse circulation (RC) and 3,500m of diamond drill programs at the Horse Well, Cowza, and Dusk til Dawn prospects, along with continuing base metal exploration at its Iroquois Zinc-Lead Project and assessing new opportunities.

Commenting on the transaction, Northern Star Managing Director Stuart Tonkin says: “The acquisition of the Millrose Gold Project presents a very compelling development opportunity that is accretive to the Jundee life-of-asset plan, as it should deliver us a sizeable low-cost, high-grade supplementary resource feed.

This bolt-on acquisition … will provide us with further confidence to plan organic and profitable growth for Jundee”

This bolt-on acquisition, which also comes with significant brownfields exploration upside, will provide us with further confidence to plan organic and profitable growth for Jundee, which already is the lowest cost asset in our tier-one portfolio.”

Also commenting, Strickland Metals Chief Executive Officer Andrew Bray says the company is very pleased to deliver such a ‘transformative’ sale for shareholders in a relatively short period of time.

“The Millrose Project was purchased for $10 million in mid-2021. After a highly successful 11-month drilling campaign throughout 2022 costing approximately $16 million, we are now selling the project for approximately $61 million, generating an approximate $35 million profit for the company.

This transaction leaves Strickland in the highly envious position of having one of the strongest balance sheets in the junior exploration space”

We are also exceedingly pleased that we have been able to deliver such a strong outcome for shareholders given the ongoing difficult market conditions for junior exploration companies. This transaction leaves Strickland in the highly envious position of having one of the strongest balance sheets in the junior exploration space.

We are confident of advancing and upgrading a number of additional gold prospects along strike to a standard similar to Millrose. Horse Well, Cowza and several other prospects will be the immediate focus of upcoming gold exploration programs. The company will also be able to expedite some exploration programs around the highly encouraging Iroquois base metal discovery.”

Additionally, Northern Star has entered into a long-term power supply agreement with Zenith Energy for electricity to the Jundee Operations, incorporating 40 million watts (MW) of wind and solar generation.

Under this agreement, 24MW of wind, 16.9MWp of solar, and 12MW/13.4MWh of battery energy storage will be installed and integrated at Jundee and will provide 56% of the mine site’s power, based on current modelling.

Northern Star Resources is an ASX-listed global gold miner with a portfolio of assets across Western Australia and the Northern Territory, and Alaska.

Strickland Metals is an Australian mineral explorer that wields a portfolio of assets in the Yandal Greenstone Belt, Bryah Basin, and Earaheedy Basin of Western Australia.

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Images: Northern Star Resources Ltd
Written By Harry Mulholland
Hailing from the Central Coast region of NSW, Harry is a passionate journalist with a background in print, radio and ESG news. When not bashing away on his keyboard, he can be found brewing a coffee or playing with his dog.