Gold Miner Northern Star Resources (ASX:NST) released their December quarterly activities report. Showing an expansion in production, along with decreases in costs per unit.
Northern Star production remained relatively steady. Producing 145,251oz within the December quarter. The Jundee and Kundana mines were the best performers, mining 60,273oz and 29,271oz for the December quarter respectively. Production for the 6 months ending December 31st 2015 was 285,494oz.
Moreover, their AISC (All-In Sustaining Cost) was A$1,040/oz. This is a 4% reduction in the AISC in the September quarter (A$1,083/oz).
Furthermore, in line with their ‘Organic Growth’ strategy, in which Northern Star aim to produce 700,000ozpa by FY18, their FY16 production guidance is in the range of 535,000-570,000oz, at an AISC of A$1,050-1,100/oz.
The gold producer sold 142,556oz in the December quarter, at an average realised price of A$1,484/oz. Equating to approximately A$210 million worth of gold sold. This is an approximate 4% improvement to the PCP in 2014.
For the year 2015, Northern Star sold around A$424 million. This is an approximate 33% decrease in revenue, when compared to the year 2014.
The Jundee mine garnered the most revenue for 2015. Selling 107,923oz, at an average gold price of A$1,497/oz. Equating to around A$161.5 million. Followed by the Kanowna Belle mine, selling 52,226oz. Corresponding to around A$78.2 million.
Within the December quarter, Northern Star paid out A$18 million in dividends, and spent A$23.5 million on organic growth and development. Nevertheless, the gold producer’s cash, bullion and investments rose by A$30 million, to A$226 million. As of the end of Q42015, Northern Star remains debt-free.
In alignment with their ‘Organic Growth’ strategy, Northern Star has continued to explore potential mines.
Implementing drilling programs in Kalgoorlie, Carbine, Jundee, and more. Whilst also participating in JV’s with Tanami Gold NL (ASX:TAM), along with Alchemy Resources (ASX:ALY). With their prospective mines Central Tanami and the Bryah Basin Region.
As at 10.29am (AEDT), NST is up over 4%, to $3.36. NST has performed well in 2016, earning over 21%. On the back of confidence in the gold producer, along with recent surges in the gold price, in response to global market volatility, NST has been able to garner investors some moderate returns for the year.
Author: Imran Valibhoy
Jan 28, 2016
Since Joining the firm in 2006, Imran has worked on a range of M&A and Capital Market transactions in the natural resources, mining as well as projects in the renewable energy sector. Prior to joining Wise-owl, Imran worked at Euroz Securities in Perth, aiding in the advisory and valuation of companies in the mining and industrial sectors in Australia. Imran has a Masters in Banking & Finance from City University's Class Business School in London and a Bacheloor degree in Commerce from UWA.