On October 1, 2018, Northern Star Resources Limited (ASX: NST) issued a press release which states that the company is through with the acquisition of Pogo gold project. The company has acquired this project from Sumitomo Metal Mining Company ltd as well as from Sumitomo Corporation. The acquisition was executed in line with the previously-disclosed terms and conditions. As per the terms, the company has decided to make an acquisition for an amount of A$347 million or US$260 million. The top management of Northern Star is optimistic about the acquisition. Northern Star’s criteria revolve around enhancing the financial returns and were met by Pogo which prompted Northern Star to go with the acquisition. The location was the primary reason which led to the decision of the acquisition.
According to the top management of Northern Star, the project has a location advantage as it was in Alaska which is the Tier-1 jurisdiction. Moreover, this location has been awarded as one of the top 10 avenues in regard to the attractiveness of the investment. Also, it is awarded as one of the top 5 in regard to the best practices mineral potential. Apart from the advantage of the location, other parameters which made this acquisition possible was the growth potential in regard to the resources, mine life, reserves, cash flow as well as production. In addition, the favorable pricing was another advantage.
The management of Northern Star also plans to make deployments in resources and reserves so that they can witness growth. The company has also made these types of investments in Tier-1 projects which are in Western Australia. Northern Star plans to make investments in the project which would be beneficial for the company as a whole.
At the time of writing, the shares of Northern Star Resources Limited witnessed an uptrend as the stock has advanced 0.602% and traded at A$8.350 (AEST 04:00 PM).
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