The Company owns 50% of an uncapped Production Royalty equal to A$10 per ounce produced from five tenements at South Kalgoorlie Operation (SKO) (E26/122, M15/717, M26/118, M26/143, M26/224). Since 2011, the mine has generated Production Royalties of A$4.0m to 31 December 2020. The Production Royalty is projected to generate US$220,000 in average annual after-tax cash-flows to the Company, assuming annual attributable production of 40,000 oz and an expected 18-year mine life. The Company also owns 80.1% of a Discovery Royalty with A$1 million payable for each new ore body on the royalty tenement package with a reserve greater than 250,000 oz of gold.
SKO is located in Kalgoorlie, Western Australia, and comprises a producing underground gold mine (HBJ Underground) and the Jubilee CIL plant (1.2Mpta) owned and operated by Northern Star Resources Ltd since 2018. Together, these are integral to Northern Star’s regional Kalgoorlie Operations and are expected to continue contributing approximately 50% of the ore to the Jubilee processing plant.
Gold mineralisation is predominantly associated with greenstones overlain by volcano-sedimentary rocks in an orogenic and paleoplacer style deposits, controlled by NNW-trending shear zones.
The ore body remains open down plunge with limited effective deep drilling undertaken. With a track record of consistent resource conversion, Northern Star is assessing potential extensions, including to the north (Mutooroo) and the south (South Jubilee) of current workings.
At 31 March 2021, Northern Star reported Total Resources of 6,056 kt grading 5.6 g/t for contained gold of 1.0Moz. Reserves were also reported at 1,729 kt grading 5.1 g/t for contained gold of 286koz. The Jubilee processing plant circuit is a conventional CIL plant with a hard rock processing capacity. It processes up to 1.2 Mtpa of free milling gold ore at an overall gold recovery of approximately 90%.