Investors back Northern Star's Super Pit buy

Investors have signalled their approval for Northern Star Resources’ Super Pit acquisition, with its $765 million share placement closing heavily oversubscribed.

Northern Star confirmed yesterday its acquisition of a 50 per cent stake in the iconic mine from Newmont Goldcorp for $US775 million ($1.13 billion).

The funds raised from the placement will be used to partially fund the acquisition, with the remaining cost of the transaction to be funded by debt.

Executive chairman Bill Beament said the strong support for the raising reflected the benefits of the acquisition for shareholders.

“The deal is earnings-accretive for Northern Star from the first full financial year of ownership and it will immediately increase our free cashflow,” Mr Beament said in a statement to the ASX.

“The acquisition also comes with huge growth potential via further optimisation of the open pit and the development of underground operations.”

Northern Star is also offering eligible shareholders another investment opportunity, with a $50 million share purchase plan to open next week.

The share purchase plan is priced on the same terms as the placement at $9.00 per share.

The company is also proposing to issue up to $5 million of new shares to Northern Star directors, who will also subscribe at a price of $9/share, subject to shareholder approval.

In early trade this morning, NST shares were up 1.19 per cent, at $9.76.