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.
The post What’s boosting the Northern Star share price on Tuesday? appeared first on The Motley Fool Australia.
Should you invest $1,000 in Northern Star Resources right now?
Before you consider Northern Star Resources, you’ll want to hear this.
Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and Northern Star Resources wasn’t one of them.
The online investing service he’s run for over a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.* And right now, Scott thinks there are 5 stocks that are better buys.
*Returns as of January 13th 2022
More reading
- These were the best performing ASX 200 shares last week
- Here’s why the Northern Star share price is climbing today
- ‘Thriving’ ASX gold shares to see more growth in 2022: expert
- Here are the top 10 ASX mining companies by market cap
- 5 things to watch on the ASX 200 on Wednesday
Motley Fool contributor Zach Bristow has no position in any of the stocks mentioned. 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.
from The Motley Fool Australia https://ift.tt/bsX4OhM
Leave a Reply