Northern Star Mining Corporation (TSX-V: NSM) announced that Anglo Pacific Group PLC (LSE: APF) has agreed to purchase a net smelter return from the company for C$8.0 million and to participate in the previously announced equity offering for a total of up to 4 million units at C$0.50 per unit.
The agreement is an important strategic milestone for NSM as it should enable the company to complete the construction and development of the Gauthier decline at its Malartic-Midway gold project in Quebec, Canada, with limited further dilution to its share capital.
Under the terms of the agreement, Anglo Pacific will provide a C$8 million convertible loan to be repaid through a 2.5 percent net smelter return royalty on the Midway project and the NSM’s McKenzie Break project in Quebec.
In the event that the price of gold exceeds US$1,250 per ounce, the net smelter return will increase to 2.75 percent but will decrease to 1.5 percent once Midway has produced 2 million ounces of gold and the gold price is below US$1,250.
Northern Star Mining to get C$8 mln from Anglo Pacific for net smelter return
Published: 09:26 07 Jul 2009 EDT