The Northern Star Resources Ltd (ASX: NST) share price is in the spotlight again today. This comes after the Australian gold miner announced a convertible funding agreement with Canadian-listed mineral exploration company, Osisko Mining Inc.
At the time of writing, the Northern Star shares are down 0.64% to $9.50.
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Northern Star agrees to convertible funding
In a statement to the ASX, Northern Star advised that it has entered into a subscription agreement and debenture with Osisko.
As such, Northern Star subscribed for a private placement of C$154 million (A$169 million) in a convertible senior unsecured debenture.
Similar to a bond, a debenture is a type of medium-to-long-term debt that companies use to raise capital. In this case, Osisko is seeking an investment to fund its development plans for the Windfall gold project in Quebec.
The debenture has an interest rate of 4.75% per annum and is payable semi-annually in arrears to Osisko. Furthermore, the debenture has a maturity date exactly 36 months from now.
In addition, both parties have agreed to exclusively negotiate the terms of an earn-in and up to 50% joint-venture in Windfall. Northern Star can convert the debenture into an interest in the property at a conversion premium of 125%.
Northern Star managing director, Stuart Tonkin commented:
This agreement gives Northern Star an exclusive right to negotiate to acquire a 50% interest in the Windfall Project.
Partnering with Osisko provides a de-risked entry to a high-quality gold province on an advanced development project and aligns with our strategy. A prospective 50/50 JV leverages the skills from both teams to deliver strong returns for our respective shareholders.
The Osisko team are a complementary partner to Northern Star with a proven track record of discovery and development and a strong commitment to ESG principles.
Northern Star share price summary
The Northern Star share price has been gradually descending over the past 12 months, recording a loss of 26%.
Based on valuation grounds, Northern Star has a market capitalisation of approximately $11.06 billion, with around 1.16 billion shares outstanding.
