While Australian mining heavyweights have been divesting projects as the sector slows, Perth-based gold miner Northern Star Resources has spent the last few years buying up unloved, mothballed mines in the western part of the country, a strategy which has paid off.
The firm said on Monday that it's on track to increase the mine-life of its projects especially in its 51 percent-owned Kundana Goldfield project in Western Australia that it bought from Barrick Gold earlier this year.
Northern Star upgraded the resource estimates at the Pegasus deposit of Kundana last month, more than doubling the resource to 763,000 ounces of gold, and Managing Director Bill Beament reiterated his expectations for the site to become a 1 million ounce deposit.
"The Kundana Pegasus discovery is a 1 million ounce plus 10 gram ore body", Beament told CNBC at the Diggers & Dealers conference in Kalgoorlie.
Beament said it was an obvious opportunity for the firm as Pegasus has been virtually untouched by previous owners between 2006 and 2011, adding that it's Barrick Gold's loss that the project was upgraded so soon after the divestment.
"It was a window of opportunity that we seized, while the Barricks and Newmonts of the world are doing portfolio rationalization. So that's created opportunities for some pretty nimble and agile companies to get in there and grab those assets", Beament said.
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Northern Star is moving to start production from Pegasus as early as possible, and is already three-quarters of the way through drilling the drive linking its underground Rubicon mine to the deposit. First ore is expected to be mined from Pegasus in the first quarter of 2015.
The latest resource upgrade has helped transform Northern Star from a single operation miner just a few years ago, to Australia's second largest ASX-listed gold miner, with 550,000-600,000 oz of gold expected to be mined in 2015.