Northern Star provides March Quarter Activities Report

NST

On 24th April 2019, Northern Star Resources Limited (ASX: NST), an Australian based gold producer presented its quarterly activities report for the period ended 31st March 2019.  As per the company, it sold 185,296 ounces of gold with an All-in-sustaining-cost (AISC) of A$1,369 per ounces. Northern Start mentioned that 82,000 ounces out of 185,296 ounces were sold alone in the March quarter, which as per the company was mainly due to its investment in Pogo gold mine.

The total ore hoisted by the company during the quarter stood at 1,379,931 tonnes with an average grade of 4.6g/t Au, which resulted in 185,296 ounces of gold.

 Source: Refer Company’s ASX announcement on 24th April 2019 (Quarterly Report)

The break-up of AISC, which stood at 1,365 per ounce during the quarter is as:

Source: Refer Company’s ASX announcement on 24th April 2019 (Quarterly Report)

As mentioned above, Northern Star’s investment in the Pogo gold mine had led the project towards its turnaround point. As per the report, the Pogo mine hoisted 171,820 tonnes of ore, which was among the least, in terms of, ore hoisted when compared to other operations of the company.

However, the mine hosted the highest grade of 7.2g/t Au, which accounted for 39,750 ounces of gold in the hoisted ore. Northern Star recovered 33,381 ounces of gold from the mine and managed to sell 36,227 ounces of gold during the quarter from the Pogo gold mine. However, the AISC of the mine remained the highest as compared to other operations and stood at A$2,062 per ounce.

As per the company, in the light of substantial progress at Pogo, it is set for a record production of 235,000-260,000 ounces for the June quarter, with an AISC of A$1,075-A$1,175 per ounce. Also, Northern Star mentioned that the FY19 production guidance of 850,000-900,000 ounces of gold remains intact. However, the company raised the AISC from A$1,125-A$1,225 to A$1,225-A$1,275 per ounces for FY19. As per the company, the FY19 production guidance of 600,000-640,000 ounces, for the Australian operations is set to be at the top.  The Pogo mine is expected to produce around 50,000 ounces of gold in the upcoming June quarter.

Source: Refer Company’s ASX announcement on 24th April 2019 (Quarterly Report)

During the quarter, the company’s Australian operations sold 149,069 ounces of gold with an AISC of A$1,200 per ounce. The U.S. operations marked an AISC of A$2,062 (US$1,486 per ounce), and the company sold 36,277 ounces of gold from it.

Financial Performance:

Northern Star’s revenue for the quarter (excluding revenue from Pogo gold mine) stood at A$329.7 million, which has decreased when compared to the revenue of A$362.6 million in the December 2018 quarter.

The fall in the revenue occurred despite the higher realized price of gold by the company during the quarter. The average gold price realized by the company in March quarter stood at A$1,779 per ounce of gold, which marked an increase as compared to A$1,722 per ounce realized by the company in the December 2018 quarter.

Northern start reported net cash of A$287.7 million (as on 31st March 2019), out of which A$20.1 million was bullion awaiting settlement, and A$48.8 million was equity investments made by the company.

The inventory of the gold declined for the March quarter and stood at 106,070 ounces of gold, as compared to 108,598 ounces of gold in December 2018 quarter.

Hedging:

The total gold hedged by the company is at 340,375 ounces with an average price of A$1,793, and the company hedged 81,875 ounces of gold during the quarter for delivery across various periods with an average price of A$1,874 per ounce.

The shares of the company are trading at A$8.230 (as on 24th April 2019, 03:13 PM), down by 2.83%.


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