The company said the latest acquisition would propel it from the fifth-largest gold producer on the Australian Securities Exchange in the 2015 financial year to the second-biggest behind market leader Newcrest Mining.

Today’s acquisition follows the $25 million purchase of the Plutonic mine and the $75 million deal to buy the Kanowna Belle and Kundana mines, all from Barrick Gold.

Jundee, 570km north of Kalgoorlie, will be the largest producer in Northern Star’s portfolio, delivering 279,000 ounces of gold in 2013 at an all-in sustaining cost of around $930 an ounce.

“Jundee is a tier-one asset in the Australian gold mining industry by any measure,” Northern Star managing director Bill Beament said.

“It has a highly enviable record, whether it be exploration success, production or cashflow.”

The project, which has been in production since 1995, has reserves of 411,000oz at 4.3 grams per tonne gold and resources of 507,000oz at 4.4gpt gold.

“I am highly confident that we will grow the inventory and extend the mine life at Jundee while reaping the benefits it will bring to our production and cashflow,” Beament said.

Northern Star has received a credit approved commitment letter from Investec Bank Group for an increased revolving debt facility of $100 million and hopes to finalise the documentation by June 26, allowing for completion of the deal in early July.

The company had obtained a $50 million facility earlier this year for the Kanowna/Kundana acquisition, but it remained undrawn.

Northern Star expects to drawdown $70 million of the increased facility for the acquisition, leaving it with around $40 million cash following deal completion.

As well as financing, the deal remains subject to a third party not exercising a right of refusal over a 30-day pre-emptive period.

Northern Star said its priorities following deal completion would be to optimise the mine plan, extend the mine life, implement the company’s initiatives and review synergies with its four other WA underground mines.

The company will take on most of Newmont’s staff at the mine.

Jundee is expected to produce over 200,000oz gold this year and next, through a 1.7 million tonne per annum carbon-in-leach plant.

It will take Northern Star’s FY15 production to 550,000oz gold.

“The international funds have made it abundantly clear that they want to invest in gold mining companies with a diversified production base and economies of scale that enable costs to be kept as low as possible,” Beament said.

“The Jundee acquisition means Northern Star will tick all the boxes while still enjoying a conservative balance sheet and outstanding potential for growth through exploration at each of our five operating mines.”

Denver-based Newmont said the sale was part of the optimisation of its portfolio as it focused on its larger, longer-life operations.

Northern Star shares jumped 5% to $1.17 this morning.