Northern Star (ASX:NST) in talks for JV with Osisko Mining

Highlights

  • Northern Star to enter into JV with Osisko mining for interest in the Windfall gold project.
  • NST will contribute by investing in Osisko’s convertible senior unsecured debenture.
  • Northern Star is now amongst other Australia-based gold miners moving to Canada.

ASX gold mining giant Northern Star Resources (ASX:NST) has entered into a debenture subscription agreement with Osisko Mining Inc. NST has agreed to fund Osisko Mining for its Windfall gold project in Quebec, Canada.  Osisko has, in return, granted Northern Star exclusive right to acquire 50% interest in the Windfall Project.

How is Northern Star funding Osisko?

  • Northern Star has agreed to subscribe for a convertible senior unsecured debenture of Osisko Mining for AU$169 million, maturing on 1 December 2025.
  • NST, however, has secured entitlement to convert the debenture into a joint venture interest in Osisko’s Windfall gold project, Quebec.
  • The debenture conversion will be possible at a conversion premium of 125% for the interest of up to 50% in the JV.
  • As of now, Osisko is the 100% owner of the Windfall gold project, which claims to have a high-grade underground gold deposit, where production is expected to commence in 2024.

How will Northern Star benefit from Osisko JV?

  • The partnership with Osisko will provide a de-risked entry to Northern Star into a high-quality gold Province-Quebec, Canada, advancing fast into development stages.
  • The project is also well aligned to NST’s strategy, and a prospective 50/50 JV adds to prospects for better returns to shareholders.
  • Osisko mining also has a complementary business to gold-focused Northern Star, alongside a proven track record in discovery and development.  

However, on ASX, NST shares are extending losses, trading in red at AU$9.43 at 1:27 PM AEDT.

Bottom line-

Northern Star, with this agreement, gains future rights of up to 50% in Osisko mining’s Canadian gold project. It is marking NST’s entry into the Canadian gold exploration territory.

Also Read- ASX slips % as GDP contracts, all sectors in red

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