Perth-based Mount Gibson Iron has struck a deal to acquire Northern Star Resources’ 50% interest in the Central Tanami Project Joint Venture (CTPJV) and adjacent exploration tenements in Australia’s Northern Territory for A$50-million in cash.

The acquisition, which includes more than 2 100 km² of mining and exploration ground and a non-operating 1.2-million-tonne-a-year carbon-in-leach plant, will give Mount Gibson a dominant position in the prolific Central Tanami gold region.

The company will also gain 3 600 km² of additional exploration acreage currently held solely by Northern Star.

The CTPJV, jointly held with Tanami Gold, hosts a Joint Ore Reserve Committee (Jorc) 2012-compliant mineral resource of 13.8-million tonnes at 3.6 g/t gold for 1.6-million ounces, with most of it on granted mining leases, including the high-grade Groundrush deposit.

The asset also contains historical Jorc 2004 resources totalling 1.0-million ounces, which are in the process of being updated to current standards. The acquisition values the Jorc 2012 resource base at A$61/oz, or A$38/oz inclusive of the historical estimate.

“This acquisition represents a compelling opportunity to enter the gold sector at an attractive price, with the sector having strong fundamentals. Involvement in the Central Tanami gold project provides Mount Gibson with an opportunity to leverage the success of its Koolan Island iron-ore operation to establish the foundations of a gold production business," said CEO Peter Kerr.

Given the substantial work that has been undertaken on the project by the CTPJV to date, Kerr said Mount Gibson plans to work with Tanami Gold to fast-track technical studies to position the project for a development decision within the next 12 to 18 months.

"We have already commenced the Foreign Investment Review Board application process and look forward to progressing to completion in the coming months," he stated.

“In the interim, we will remain a close observer of the work being undertaken in accordance with the joint venture schedule approved by Tanami Gold and Northern Star, including the resource definition drilling programmes that are presently under way," said Kerr.

Mount Gibson will fund the acquisition from internal cash reserves and will also assume responsibility for A$5.8-million in bank guarantees via its existing bonding facility.