Northern Star Resources is pleased to advise that its plan to build a multi-million-ounce Australian gold mining house has been given a significant boost by a deal to acquire non-iron ore mineral rights over key tracts of highly prospective acreage around its Paulsens mine in WA from Fortescue Metals Group. The deal, which provides for Northern Star to initially acquire 25% then earn 35%  of the non-iron ore rights to Fortescue tenements, will leave Northern Star with a 60% JV interest and a 7000km2 tenement package of land stretching from Paulsens to its 1Moz1 Mt Olympus deposit ~200km away. After the initial 60% earn-in Fortescue must co-contribute otherwise they will dilute down, to an eventual 2% NSR (Net Smelter Return).

Northern Star now has ~400km of strike along two parallel structures with Paulsens and Mt Olympus situated at either end.The northern structure "Nanjilgardy Fault" contains the 900,000oz Paulsens orebody currently being mined by Northern Star and the Mt Olympus deposit, which is central to the Company’s plan to establish its second 100,000ozpa stand-alone operation at its Ashburton Project. It also hosts the highly promising Electric Dingo Project, which is located between Paulsens and Mt Olympus.

Many of the Fortescue tenements on this structure sit immediately along strike to the known mineralisation at Paulsens, Mt Olympus and Electric Dingo. The southern structure, "Baring Downs Fault" was recently recognised in seismic surveys as a major, deep-seated structure by the Geological Survey of WA, meaning it is considered highly prospective. Northern Star believes the geology on this structure has the potential to replicate that of the richly mineralised structure 25km to the north. Due to the identification and significance of the Baring Downs Fault, Northern Star's Exploration team quickly reviewed the district for additional prospective tenements. This resulted in the application for the 560km2 Monster Rocks Project tenement which was vacant.

The deal is conditional on Fortescue:

(a)  obtaining native title party consent to the grant of the non-iron rights under existing land access agreements, and

(b)   the parties executing a deed of acknowledgment and consent with Fortescue's financiers, in a form acceptable to all    parties, acknowledging the Company's rights under the agreements with Fortescue and consenting to the security granted by Fortescue.   

If the conditions are not satisfied by 28 February 2013 or other agreed date, the transaction will not proceed. Northern Star Managing Director Bill Beament said the Fortescue tenements were the final pieces of the jigsaw, giving the Company an extensive land holding in one of Australia's most prospective yet barely explored gold regions. "Two deposits of about 1Moz each have been discovered on our acreage along with a series of other mineralised targets and yet there has been little or no exploration in this area by the standards of other Australian gold provinces," Mr Beament said.

"Given the combination of the deposits we know about in this area and the lack of exploration undertaken, we believe this region boasts some of the most promising upside in the Australian gold industry." Northern Star has set aside $20 million for exploration/drilling in calendar year 2013. This will be used to continue growing resources at Paulsens, establishing a 100,000ozpa stand-alone operation at Ashburton and undertaking aggressive exploration activities on the newly acquired ground in addition to Electric Dingo, Belvedere and other prospects between Paulsens and Ashburton.