Here’s why the Northern Star share price is climbing today

What’s driving Northern Star shares higher?

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Key points

  • Northern Star shares zip 1.29% higher to $10.96 
  • The company entered an agreement to sell its non-core assets, Paulsens and the Western Tanami gold project for $44.5 million to Black Cat Syndicate 
  • The deal is expected to be completed sometime in June 2022 

The Northern Star Resources Ltd (ASX: NST) share price is edging higher during mid-afternoon trade.

This comes after the company announced a number of non-core asset sales to align with its five-year strategic plan.

At the time of writing, the Australian gold miner’s shares are swapping hands for $10.96, up 1.29%.

Northern Star divest Paulsens and Western Tanami gold assets

Investors are reacting to the company’s latest news today, sending Northern Star shares higher.

According to its release, Northern Star advised it has entered into a binding agreement with fellow gold miner, Black Cat Syndicate Ltd (ASX: BC8).

The sale price of Northern Star’s non-core assets is listed for $44.5 million in cash. This includes the following:

  • $14.5 million cash consideration to be paid at sale completion
  • The issue to Northern Star of 8.34 million fully paid ordinary shares in Black Cat at a deemed issue price of 60 cents per share
  • $15 million cash consideration to be paid on 30 June 2023 (deferred consideration)
  • $10 million cash in a series of contingent payments linked to future production post-sale completion

The sale of Paulsens and Western Tanami is expected to be completed in June 2022.

However, this is subject to a number of conditions being met. This includes Black Cat raising $25 million by 15 June 2022 and receiving its shareholders’ approval for the issue of Black Cat shares to Northern Star as part of the transaction.

Northern Star managing director, Stuart Tonkin commented:

The sale of Paulsens, our foundation asset, and the Western Tanami Gold Project align with Northern Star’s five- year strategic plan to generate superior shareholder returns 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 for the benefit of all stakeholders.

Northern Star share price summary

Since the beginning of the year, Northern Star shares have taken off to post a gain of around 16%. Investor sentiment has strengthened across the sector amid the Russian/Ukrainian war, rising inflation and the recent COVID-19 outbreak in China.

Based on today’s price, Northern Star commands a market capitalisation of approximately $12.72 billion.

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Motley Fool contributor Aaron Teboneras owns Northern Star Resources Limited. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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