Northern Star Resources was a small cap in 2010 when it paid $40 million for the unloved Paulsens gold mine in WA’s Pilbara. The decision to purchase, restore and grow this small underground mine proved the foundation for one of WA’s great ASX success stories.
Twelve years on, the $13 billion Northern Star (ASX: NST) said this week it would sell Paulsens along with the Western Tanami gold project for $44.5 million to Black Cat Syndicate (ASX: BC8).
The proposed sale is a milestone in Northern Star’s still young history – and being watched closely by the likes of Rox Resources, which hopes to build a similarly stellar track record founded on the revival of the Youanmi project near Mt Magnet in WA.
Through a new, focused approach to exploration at Youanmi, Rox (ASX: RXL) has grown the total mineral resource to three million ounces. And the company tantalised investors this week with a flurry of announcements and the prospect of a resource upgrade later this month.
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Northern Star expects to complete the sale of Paulsens and Western Tanami – for cash and some scrip in Black Cat – in June, subject to Black Cat raising $25 million and gaining shareholder approval.
Northern Star managing director Stuart Tonkin said the sale of the two assets, which are in care and maintenance, was part of the company’s five-year strategy to divest non-core assets and maximise shareholder value through active and disciplined portfolio management.
“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,” Mr Tonkin said.
Paulsens was a company starter that laid the foundations for Northern Star’s position today as one of the world’s leading gold producers.
The Alex Passmore-led Rox is pursuing its own journey though, in common with Northern Star, is hopeful a bespoke approach to an old asset will deliver sustained shareholder value.
In January, Rox upgraded Youanmi’s mineral resource to three million ounces at an average grade of 3.78 g/t gold, pushing the company up the leaderboard of the ASX’s next producers. The resource upgrade consolidated underground resource drilling results from 2021 and added 1.34 million ounces.
This week, Rox flagged another resource upgrade for later this month that will consolidate results from near-surface drilling in 2021-2022, including the latest round of high-grade results from the Link prospect announced on Tuesday.
The company’s other big news this week was the appointment of MACA Interquip to complete feasibility level test work for both the Youanmi underground and open pit resources and produce design and costings for a dual-purpose processing plant (to scoping-level accuracy).
Mr Passmore said while sulphide mineralisation from the underground resource could achieve very high extraction rates through various available processes, free-milling pit feed would make up 60 per cent to 70 per cent of total feed tonnes. This meant larger processing plant options were now being considered to reduce the amount of sulphide material in the total feed.
“Our plan includes a dual-purpose plant for oxide and sulphide feed material, which is now included in the scope for processing plant design and costing,” he said.
Mr Passmore will host an investor webinar next Wednesday to discuss Rox’s joint focus of further, systematic exploration alongside completing feasibility studies.
