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Northern Star share price could soar after increasing its Acra Joint Venture stake

The Northern Star Resources Limited (ASX: NST) share price could rise in early trade after an update by Pioneer Resources Limited (ASX: PIO) on its Acra Joint Venture (JV).

What was in this morning’s update?

Northern Star has now earned an additional 55% JV interest in the Acra JV, after sole funding $3 million of farm-in expenditure since October 2016 and previously purchasing an initial 20% stake.

The Acra Gold Project covers 340 square kilometres and is located 60km north-east of Kalgoorlie in WA, with this morning’s announcement meaning the JV phase of the agreement is now beginning.

Northern Star now holds a 75% JV interest and Pioneer holds a 25% JV interest, while Pioneer is to be free-carried up to the point that a mining proposal is approved by the Department of Mines, Industry Regulation and Safety (DMIRS).

After DMIRS approval, Pioneer can elect to either form a mining JV where both parties contribute proportionally to expenditure or elect to assign its 25% stake to Northern Star at fair market value.

Northern Star is systematically exploring the Acra Gold Project, with target generation work and regional aircore drilling programs on the northern Acra tenements a current focus.

How has the Northern Star share price performed so far this year?

The Northern Star share price is broadly flat so far this year, despite dropping as much as 12.9% in late January.

Global volatility in gold prices and rising all-in sustaining costs (AISCs) has been reflected in the share price movements of not just Northern Star but fellow ASX gold miners St Barbara Ltd (ASX: SBM) and Regis Resources Ltd (ASX: RRL).

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Motley Fool contributor Lachlan Hall has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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