PERTH (miningweekly.com) – Gold miner Northern Star Resources on Tuesday announced a $95-million deal to acquire fellow gold producer Newmont Corporation’s power business.

As part of Northern Star’s $800-million purchase of 50% of Kalgoorlie Consolidated Gold Mines (KCGM) and associated assets last year, Northern Star paid $25-million for an option to buy the Newmont power business.

Northern Star has now entered into a binding sale agreement with Newmont Australia to acquire all the shares in GMK Investments, which holds a 100% interest in Newmont Power Pty Ltd and NP Kalgoorlie. NP Kalgoorlie owns 50% of Goldfields Power, the holder of the Parkeston power station.

The cost of the option will be deducted from the final purchase price, leaving Northern Star to pay the balance of $70-million at completion, which is expected to occur in December 2021.

The 110 MW Parkeston power station and associated infrastructure primarily provides electricity to KCGM. Parkeston also supplies electricity to the Kalgoorlie area through its connection to the South-West Interconnected System. The plant has a history of continuous reliable generation.

Northern Star told shareholders on Tuesday that the purchase provides the company with significant synergies and value, including infrastructure and power security, to support the requirements of KCGM, lower power costs at KCGM, and further options for Northern Star to implement renewable energy.

Northern Star MD Stuart Tonkin said the acquisition gave the company greater control over its power supply in Kalgoorlie.

“The purchase means our Kalgoorlie power supply will now form part of our studies into ways to meet our commitment to becoming carbon-neutral,” Tonkin said.

Newmont president and CEO Tom Palmer told shareholders that with the sale of the non-core power asset, the company will continue its regional focus on delivering long-term value at its Boddington and Tanami operations and advancing its future project pipeline through active exploration campaigns.