Shares in Northern Star Resources Ltd (ASX: NST) are rangebound today and now trade 35 basis points higher at $11.48 apiece.
After surging hard in April, the Northern Star share price has thrust from a low of $10.15 to rest just shy of 52-week highs.
As the price of gold manages to curl upwards, Northern Star has seen its share price rocket north in quite a synchronised fashion.
This relationship has clipped a 30% gain for the Northern Star share price in the past 3 months of trade.
What was announced today?
Northern Star posted an announcement from Black Cat Syndicate Ltd (ASX: BC8) that the latter has entered into binding agreements to acquire the company's Coyota and Paulsens Gold operations.
Under the terms, it is proposed Black Cat will pay a cash consideration of $14.5 million at completion, "with a further $15.0 million secured and payable on or by 30 June 2023."
To fund the acquisition, Black Cat is pleased to announce that firm commitments have been received to raise $35 million by way of a placement at an issue price of [55 cents] $0.55 per share to institutional and sophisticated investors.
Shares in Black Cat Syndicate are down 15% today, bringing losses to 23% for the last year.
Bloomberg Intelligence analyst Yi Zhu recently commented that Northern Star's portfolio restructuring efforts could be a net positive, in a research note.
"Northern Star aims for gold production of 2 million ounces by calendar 2026, up 425,000 ounces or 27% from 2021 following asset restructuring over the past 12 months," she wrote.
Noteworthy is the Saracen Minerals transaction of February 2021, which has "estimated to have driven up the company's net present value (NPV) by $1.5-$2.0 billion".
Furthermore, "[t]he divestiture [of its Mungari assets] strengthened Northern Star's balance sheet by A$400 million," adding a question mark over what could eventuate from Black Cat's purchase, announced today.
"Northern Star will likely benefit from higher sustained earnings over the long term, as output is expected to climb 27% from the 1.6 million ounces (moz) reported in fiscal 2021 ended June to a target of 2.0 moz by 2026," Zhu added.
In the last 12 months, the Northern Star share price has held gains and is up less than 1%. This year to date however, it has gained 22% after a 7% gain.
