Ramelius Resources cashed up for Northern Star’s Carosue Dam after selling Edna May to Forrestania Resources

Ramelius Resources has inked a deal to sell a mothballed gold operation for $300 million, growing the mid-tier producer’s financial muscle to snap up a Northern Star Resources mine. The Mark Zeptner-led Ramelius will receive a mix of $200 million in cash and $100m in shares from Forrestania Resources in exchange for the Edna May mine on the edge of Westonia, about 315 kilometres north-east of Perth. Edna May was placed on care and maintenance last year after its regional satellite deposits were exhausted. Forrestania aims to restart the mill in the first half of 2027, using its own ore, before assessing any long-term resumption of mining at Edna May. “Forrestania believes it has the proven development and delivery team that is ready to refurbish, upgrade and commission the 2.9Mtpa Edna May Mill,” Forrestania chairman David Geraghty said on Monday. It comes almost three weeks after Forrestania launched a $93.5m takeover of Zenith Minerals that both companies said would strengthen their ability to develop gold mining operations in an area south of Southern Cross. The Edna May deal requires Forrestania Resources to raise the entire $200m cash component. Ramelius acquired Edna May from Evolution Mining in 2017 for $90m in cash and royalties, producing 760,000 ounces since then. The cash injection from Forrestania gives Ramelius more firepower to lob an offer for Northern Star’s Carosue Dam gold mine, which is expected to fetch more than $1 billion. Rumours abound, including in local industry publication Money of Mine, that Ramelius is interested in the Goldfields asset. Northern Star is facing pressure from activist shareholder Elliott Investment Management to make sweeping changes to its portfolio amid a prolonged period of underperformance. Analysts are tipping that Northern Star will be tempted to offload one of its periphery mines to focus on tier-one assets like the Kalgoorlie Super Pit. “If it’s an individual asset sales process [Northern Star undertakes], we consider Carosue Dam to be a high-probability divestment candidate,” Jarden analyst Ben Lyons said earlier this month. Ramelius had $606.5m of cash and bullion in its war chest by the end of the March quarter. Within its own portfolio, Ramelius is developing the Rebecca-Roe project. “The transaction realises value for shareholders as we focus on the transformation of Mt Magnet and development of Rebecca-Roe,” Mr Zeptner said. “The combination of cash and Forrestania shares provides immediate value while retaining exposure to future success at Edna May. “We look forward to becoming a Forrestania shareholder and retaining exposure to execution of their re-start strategy at Edna May.” Shares in Ramelius were up 1.5 per cent to $3.04 by Monday at 11.45am.