Shares in Northern Star have hit a record high on their return to trade after the gold miner raised the cash to buy the $347 million Pogo underground gold mine in Alaska.
The Perth-based miner's shares surged by as much as 18.5 per cent on Monday to a record $8.25 after the end of a two-day trading halt, as investors reacted warmly to a deal that will make Northern Star the second largest gold producer on the ASX.
As a result of the deal to buy Pogo from Japan's Sumitomo, Northern Star increased its FY19 guidance from between 600,000 and 640,000 ounces, to between 850,000 and 900,000 ounces.
Royal Bank of Canada mining analyst Paul Hissey said, while questions remained over the deal, even a partial reproduction of its previous acquisition and exploration success could make Northern Star a genuine global mid-tier player.
"Instinctively, if you told us that NST were buying an asset for $357 million, which produces 250,000 ounces annually at $A1,200 an ounce, with exploration upside, we would be inclined to be supportive," Mr Hissey said.
"The company deserves credit for the growth it has delivered over the last few years."
Northern Star issued 26.1 million new shares at $6.70 in a bid to raise $175 million.
The company said the placement was heavily oversubscribed, with BlackRock Investment Management snapping up $57 million of new shares.
In March, Northern Star also agreed to buy the South Kalgoorlie gold mine from Westgold Resources for $80 million.
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