Australian gold miner Northern Star Resources Ltd. (NESRF) said on Wednesday that it has entered into an agreement to buy the interests of Artemis Resources Ltd. in the Mt Clement gold project in Western Australia for a total of A$344,000 ($246,000).
Upon completion of the transaction, the current joint venture agreement between Artemis and Northern Star for the project will terminate. The binding sale agreement will let Artemis retain a 1% net smelter royalty (NSR) at Mt Clement.
“We would like to thank Northern Star for their partnership on this project as part of the joint venture and wish them all success in moving the project forward to a production scenario where Artemis may further benefit via our retained 1% net smelter royalty,” Artemis Executive director Alistair Clayton said. “This transaction represents another step in our ongoing non-core project divestment program.”
Before the sales agreement, the joint-venture agreement involved an 80% interest from Artemis in Mt Clement, and a 20% interest from Northern Star.
The Mt Clement project is located about 30 kilometres south of Northern Star’s Paulsen’s gold mine and includes precious and base metal prospects with a Joint Ore Reserves (JORC) resource of 64,400 ounces of gold and 618,500 ounces of silver.
Northern Star shares surged 8% to $11.46 on Tuesday taken this year’s rally to 43%.
Canaccord Genuity analyst Tim McCormack this month cut the stock to Hold from Buy with a $10.40 price target, because of valuation and the impact of COVID-19 on the company’s Pogo operation in Alaska.
“In the short term, we view FY21 guidance as a potential risk to the investment thesis but continue to rate organic potential of the portfolio highly, as an aspect that the market is yet to fully appreciate,” McCormick wrote in a note to investors.
Overall, the rest of the Street is in line with McCormack’s outlook with a Hold analyst consensus. The $10.35 average price target implies an almost 10% downside potential in the shares over the coming year. (See Northern Star stock analysis on TipRanks)
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