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TSX
Venture SYMBOL: NSM
September
3, 2009
NORTHERN STAR CLOSES CDN$8.0 MILLION ROYALTY FINANCING WITH ANGLO
PACIFIC GROUP PLC
Val d’Or, Quebec, September 3, 2009 – Northern Star Mining Corp.
(TSXV:
The financing is an important
strategic milestone for NSM as it should enable the Company to complete the
construction and development of the Gauthier decline at its Malartic-Midway
gold project (the “Midway Project”) situated
in Fourniere and
Under the terms of the agreement, Anglo Pacific has financed the Company through a convertible debenture in the principal amount of CDN$8.0 million (the “Convertible Debenture”) which will be repaid through a 2.5% net smelter return royalty (the “NSR”) on the Midway Project and the Company’s neighbouring Callahan, Fourniere and McKenzie Break properties (collectively the “Primary Properties”). In the event that the price of gold exceeds US$1,250 per ounce, the NSR will increase to 2.75% but will decrease to 1.5% on all production from the Midway Project at such time as 2,000,000 ounces of gold have been produced therefrom and sold if the price of gold is below US$1,250 per ounce. Upon repayment of the principal amount of CDN$8.0 million, the Convertible Debenture will convert to a straight net smelter return royalty.
Pursuant to the terms of the Convertible Debenture, the Company has also agreed to pay a 1% NSR on all production processed at the Company’s mill from properties other than the Primary Properties but excluding any toll milling undertaken by NSM on behalf of unassociated third parties.
The Company will make quarterly interest payments at an annual rate of prime plus 2% on the outstanding balance of the Convertible Debenture from time to time.
The Convertible Debenture and subsequent NSR are secured by, among other things, a hypothec and general security agreement against all of the assets and undertaking of the Company including the Primary Properties and Anglo Pacific has the right, for a period of five years, to convert, at its discretion, the then outstanding principal amount under the Convertible Debenture into common shares of the Company at a conversion price of CDN$0.70 per share, subject to adjustment. In the event of such conversion, the NSR to Anglo Pacific will cease.
A cash commission of 5% and agent’s warrants to purchase up to 400,000 common shares of the Company at a price of CDN$0.70 per share for a period of two years is payable to Casimir Capital L.P. in connection with the financing.
The Convertible Debenture and all securities issued in connection therewith are subject to a four month hold period expiring on December 29, 2009.
Anglo Pacific Group
The TSX Venture Exchange has not reviewed and does not
accept responsibility for the adequacy or accuracy of this release.
ON BEHALF OF THE BOARD
“Jonathan Awde”
Jonathan Awde, Vice-president, Corporate Finance
FOR FURTHER INFORMATION PLEASE CONTACT: Northern Star Mining Corporation TOLL
This news release
contains forward-looking statements, which relate to future events or future
performance and reflect management’s current expectations and assumptions. Such forward-looking statements reflect management’s
current beliefs and are based on assumptions made by and information currently
available to the Company. Investors are cautioned that these forward looking
statements are neither promises nor guarantees, and are subject to risks and
uncertainties that may cause future results to differ materially from those
expected. These forward-looking statements are made as of the date hereof and,
except as required under applicable securities legislation, the Company does
not assume any obligation to update or revise them to reflect new events or
circumstances.
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