The high-grade Pegasus deposit at the East Kundana joint venture was discovered a year ago and today’s acquisition will give Northern Star a 51% stake in it.

Drilling has already defined an indicated and inferred resource of 576,000 tonnes at 9.8 grams per tonne gold for 355,000 ounces of contained gold.

Northern Star managing director Bill Beament said Pegasus was one of highest-grade gold discoveries in Australia in the past 10 years.

"The high grades at Pegasus and its close proximity to existing mine infrastructure mean production costs will be among the lowest in the Australian gold industry," he said.

"There is also huge potential to grow the Pegasus resource to 1 million ounces and beyond, ensuring it is an essential long-term asset of Northern Star’s business."

Importantly, Pegasus is just 200m from existing mine infrastructure and can be accessed from the Rubicon underground.

A feasibility study is already underway and Northern Star believes the deposit can be taken into production quickly and at a low capital cost.

There is also the potential to generate operational savings at Rubicon-Hornet and Raleigh.

Importantly, Pegasus remains open in all directions and Northern Star sees huge potential for it to grow to more than 1Moz.

Recent intercepts from Pegasus include 1.4m at 84.2gpt gold, 3.3m at 42.3gpt gold and 4.2m at 35.3gpt gold.

Getting Pegasus into production will be a priority for Northern Star, once the acquisition is complete, which is expected in March.

Shares in Northern Star remain in a trading halt at 99c, pending the completion of the first tranche of a $100 million raising tomorrow.