TSX Venture SYMBOL:
NSM
September 22, 2006
FOR
IMMEDIATE RELEASE
NORTHERN
STAR COMPLETES ACQUISITION OF MILL
Northern Star Mining Corp. (TSX.V-NSM) is
pleased to announce that it has successfully completed the acquisition of 100 %
of Jake Resources Inc., whose assets include a fully operational 900 per ton
day cyanidation mill, located 13 km east of Val-d’Or.
The mill is fully serviced,
operational, and permitted with complete inventories of chemicals and reagants, that allows it to begin processing immediately.
The mill includes complete cyanidation circuits with agitators, holding tanks for preg solutions, drum filters, Merril-Crowe
gold precipitation system, gold pour furnaces (2) and gold vault, spare parts
inventories, and is fully serviced with offices, warehouse and repair shops.
Mill water during processing is recirculated avoiding
water storage and holding costs.
Cyanidation is
introduced from a liquid cyanide tank, stored within the mill, a more efficient
system for cyanide delivery to the mill and for use during processing.
The crushing and grinding circuits
consists, in order, of a jaw crusher, to cone crusher, to 2-1000 ton insulated storage
bins, to rod mill and finally to the
ball mill which accepts initial cyanide solution for processing. The delivery
mechanism consists of an underground grizzly system that accepts up to 12 inch
rock followed by conveyer to the initial jaw crusher.
The mill is designed with full back up
with two pumps on each main system, (one serving as back up in case of breakdown).
The Merrill Crowe system also has one complete filter set as back up.
The mill also has back up vacuum pumps,
and took delivery of and has recently installed a new back up 800 cfm 2005 Ingersoll Rand compressor.
The mill was constructed
in 1987 as part of the Beacon Gold mine. In 2000, the mill was acquired by a
private company (Jake Resources) who carried out $1.5 million of refurbishment
with the goal of carrying out custom milling operations. Presently the mill
layout allows for expansion to over 1800 tons per day without significant
modifications as originally the mill was planned with a higher capacity.
It is estimated that
to build a complete cyanide mill like Northern Star’s would cost in the order
of $35 million and take over 2.5 years to construct and permit.
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 terms of the
transaction were a total of $1.9 million (payable by on initial $100,000
deposit and $1.8 million payable on September 21, 2006). The issuance of 2.73
million common shares (four month hold period) and the issuance of 1.365 million
warrants at a price of $1.40 valid for a two year period from issuance.
The outstanding balance
consisting of $1.6 million, is payable by an initial $400,000 on November 1,
2006 $400,000 on December 1, 2006 and final payment of $800,000 in six monthly
installments beginning January 1, 2007 and ending June 1, 2007. The vendors
retain a 1.5 per cent net smelter royalty on any production from the underling property.
As well, 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.
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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