TSX
Venture SYMBOL: NSM
August
28, 2006
FOR IMMEDIATE RELEASE
NORTHERN STAR ACQUIRES MILL
Northern Star Mining
Corp. (TSX.V-NSM) is pleased to announce that it has signed an agreement to
purchase a fully operational 900 ton per day gold milling facility, located
some 15 km east of the city of
The purchase consists
of a complete cyanidation mill, operational with crushing
and grinding circuits, Merrill Crowe filters system, all necessary spare parts,
gold pour furnace, and is fully serviced with offices, warehouse, and repair
shops. It is located less than 2 km from the
The mill was
constructed in 1987 as part of the Beacon Gold mine. In 1991, the mill was acquired
by a private company (Jake Resources) who carried out 1.5 million dollars of
refurbishment with the goal of carrying out custom milling operations.
In
addition to the above, the purchase agreement includes the Beacon Gold mine, consisting
of a 1200 feet deep shaft and head frame (Beacon II), two declines, and a 400
feet deep shaft (Beacon I). Exploration, development and mining on the property
was limited to depths above the 1200 feet level. The
above is contained on two mining concessions and one mining claim.
Northern Star’s
geological staff believes that significant potential may exist for gold mineralization
below 1200 feet.
The purchase of the
Beacon mine and mill complex calls for total payment of 6.5 million dollars, subject
to satisfactory due diligence presently underway. Replacement costs of a mill
of this capacity are generally of the order of 25-30 million dollars.
Payment terms and
conditions are presently being negotiated.
At the same time, the
Company also wishes to announce that it has purchased for 2.5 million dollars the
outstanding royalty on the Midway project from 4033744 Canada Inc.
Originally, the sliding
scale royalty had the following conditions (figures in U.S. Dollars).
- Gold price less than $275 per ounce 2.5 % N.S.R.
- Gold price between $275 and $300
per ounce 3.5 % N.S.R.
- Gold price between $300 and $350
per ounce 4 % N.S.R.
- Gold price between $350 and $400
per ounce 5 % N.S.R.
- Gold price between $400 and $500
per ounce 6 % N.S.R.
- Gold price over $500 per ounce 7 % N.S.R.
The
royalty was originally purchasable for 3.5 million dollars.
The Company continues
its exploration and development at its Midway gold project near Val-d’Or,
Québec, with work consisting of development, stripping, surface pillar
stabilization and removal, as well as a diamond drill program.
Results will be
released as available.
ON
BEHALF OF THE BOARD
“Michel David”
Michel
David
President
FOR FURTHER
INFORMATION PLEASE CONTACT: Northern Star Mining Corporation
TOLL FREE
(800) 460-5031 or (819) 825-8088, (FAX) (819) 825-1199 Website: www.nsmgold.com
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