An Australian gold miner has entered into an agreement to acquire a United States based underground gold mine.
Northern Star Resources Ltd has announced this week that it has entered into an agreement with the Japan based Sumitomo Metal Mining Co and Sumitomo Corp to acquire the latter’s Pogo Gold mine.
Located southeast of Fairbanks city in the state of Alaska, the Pogo Gold mine is a 4.1Moz underground gold mine with a vast network of more than 90 miles of underground roads winding to depths more than 1,000 feet below the surface.
Northern Star will acquire the project for cash proceeds of $260 million.
The company will look to produce around 250,000-260,000 oz of gold per year. Following completion of the acquisition, Northern Star has targeted a FY2019 gold production of around 850,000-900,000 oz.
“Pogo is a world-class project with an 8 million ounce (Moz) gold endowment, producing 3.8 Moz at 13.6 grams per tonne over the past 12 years at an average rate of about 300,000 ounces per annum,” Northern Star Executive Chairman Bill Beament told Reuters.
This will ultimately make Northern Start the second largest gold producer listed on the ASX.