On the surface this looks like a great deal for NST. One would...

On the surface this looks like a great deal for NST. One would expect them to lower cost down by USD100/ounce and extend the LOM.

I agree that NST should be using debt rather than equity for this purchase. They could repay the loan in about 6 months from cashflow.

I assume (but do not know) that the sale is on the cheap because of the need to do some heavy capex/exploration, otherwise there would have been other goldies (especially from north America) interested in buying at a higher price. The limited amount of gold reserves in the deposit may also have been a factor despite the large remaining resource. But all will be revealed in the fullness of time once NST operates the mine and updates the market.

Once this deal is finalised NST's current share price will look a lot more reasonable - at present its the most over-priced of our over 350k ounce pa goldies. No doubt the share price will spike up when trading resumes.

GLA.

loki