8th Jul 2009 07:00
News Release
8th July 2009
Anglo Pacific Group plc
Provision of net smelter convertible loan facility to Northern Star
Anglo Pacific Group plc ("the Company") announces that, effective 7th July 2009, it has agreed, subject to contract and due diligence, to purchase a net smelter royalty ("NSR") from the Northern Star Mining Corporation ("Northern Star") (TSX: NSM) for C$8.0 million and to participate in the Northern Star's previously announced equity offering, for up to 4,000,000 units at a price of C$0.50 per unit.
The agreement is to enable Northern Star to complete the construction and development of the Gauthier decline at its Malartic-Midway gold project in Quebec, Canada.
Under the terms of the agreement, the Company will finance Northern Star through a convertible debenture of C$8.0 million which will be repaid through a 2.5% NSR on the Midway Project and Northern Star's McKenzie Break project located in Fiedmont and Courville Townships of Quebec. In the event that the price of gold exceeds US$1,250 per ounce, the NSR will increase to 2.75%. The NSR will reduce to 1.5% when production from the Midway Project has exceeded 2 million ounces of gold if at that time the price of gold is below US$1,250 per ounce. Upon repayment of the principal amount of C$8.0 million, the convertible debenture will convert to a straight net smelter return royalty.
Northern Star has also agreed to pay a 1% NSR on all production from the its mill (or its replacement) from properties other than the Midway and McKenzie Break projects but excluding any toll milling undertaken by NSM on behalf of unassociated third parties.
This acquisition marks another positive step in the Company's strategy to broaden and diversify its portfolio of royalties.
Anglo Pacific Group plc generates returns for shareholders by receiving royalties from operating mines including coking coal mines in Australia owned by BHP and Rio Tinto. The Company's strategy is to pay a substantial proportion of these royalties to shareholders as dividends, while reinvesting the balance in strategic listed and unlisted metal exploration and production opportunities with a view to obtaining more royalties for shareholders. The Company will continue to adopt an active, merchant banking approach to mining projects to achieve better returns at reduced risk.
For further information:
Anglo Pacific Group PLC +44 (0) 20 7318 6360
Peter Boycott, Chairman
Matthew Tack, Finance Director
Liberum Capital +44 (0) 20 3100 2000
Chris Bowman
Simon Stilwell
Scott Harris +44 (0) 20 7653 0030
Stephen Scott
James O'Shaughnessy
Website: www.anglopacificgroup.com
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