Northern Star’s Share Price Surges 17% After Oversubscribed Placement
After successfully completing its A$175m fully-underwritten placement to official Investors, Northern Star’s share price rose 17%.
This saw its institutional placement raise A$175 million from the issue of 26.1 million shares.
Accordingly, Northern Star’s share price was 6.70 per share, which was a 3.7% discount on the previous closing price of A6.96 at 29 August 2018.
Shares of Northern Star Resources Ltd [ASX:NST] are currently trading $8.14 at the time of writing.
They are an Australian based global-scale company that specialises in gold production.
Support for Pogo acquisition helping Northern Star’s Share Price
The profits from the oversubscribed placement will be used by Northern Star to fund its acquisition of the Pogo underground gold mine in Alaska.
After the pogo acquisition saw overwhelming support from funds and accounts management by UK’s BlackRock Investment Management Limited.
Because of this 2019FY, guidance has risen to 850,000-900,000oz at an ASIC of A$1,050-1,150oz.
Bill Beament, Executive Chairman of Northern Star confirmed that the strong demand for the placement was great backing for the pogo acquisition.
‘…existing shareholders, fund managers and analysts from around the world have said they share our view that Pogo is an exceptional acquisition which meets our criteria of owning Tier One assets with strong growth potential in Tier One locations’
‘They also share our view that the acquisition is consistent with Northern Star’s policy of maximising financial returns, rather than growing production for the sake of it’.
As well as this, the trading halt on shares has been lifted, meaning Northern Star shares resume trading on today’s market open. This is most likely contributing to its rising share price on the back of the acquisition support.
What’s to come for Northern Star Resources Share Price
Most recent news saw the settlement of the placement scheduled later this week on Wednesday 5 September. An allotment and quotation of the Placement Shares will take place on the ASX on Thursday, 6 September 2018.
Things are looking promising for Northern Star resources, although with any big spike in share price, investors should expect somewhat of a decrease in value after the initial surge.
For Money Morning