Drill results confirm Paulsens as high-grade, long-life.

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THE DRILL SERGEANT: Northern Star Resources (ASX:NST) said its forecasts of for significant increases in cashflow and production next year remain on track.

“We are delivering on all our key forecasts and in some cases, such as the mine and plant expansion, we are beating our targets,” Northern Star Resources managing director Bill Beament said in the company’s announcement to the Australian Securities Exchange.

The call comes after the company received drilling results of up to 189 grams per tonne gold from the high-grade extension zone at the company’s Paulsens gold mine in Western Australia.

The high-grade extension zone is part of the Voyager 1 lode, which is currently the main ore source at Paulsens and has produced 175,000 ounces over the past two years.

Recent results from Voyager 1 include (uncut):

–    4.4 metres at 42.4 grams per tonne gold (true width 2.1m), including 0.7m at 189 grams per tonne gold.

–    6.9m at 25.3g/t gold (true width 5.2m), including 1m at 151.6 g/t gold;

–    2.2m at 83.8g/t gold (true width 1.2m);

–    3.3m at 37.9g/t gold (true width 1.5m);

–    1m at 39.6g/t gold (true width 0.6m);

–    2.4m at 28.7g/t gold (true width 2.3m);

–    8.7m at 26g/t gold (true width 1.6m);

–    6.8m at 24.7g/t gold (true width 2m);

–    2m at 22.2g/t gold (true width 1.6m);

–    6m at 18.7g/t gold (true width 3.8m);

–    7.5m at 11g/t gold (true width 4.2m);

–    15.8m at 10.1g/t gold (true width 7.2m); and

–    8.6m at 6.1g/t gold (true width 5.3m).

The high-grade extension zone has a resource grade of approximately 25gpt compared with Paulsens Voyager 1 historical mined grade of approximately 8gpt.

 

Long section view of drill results for Voyager One including the Extension zone. Source: Company announcement

 

Northern Star said this increase in head grade will underpin a rise in production to as much as 115,000 ounces in CY2013, lowering costs and resulting in surplus cash generation of $65 to $85 million next calendar year.

With current gold prices running $150 per ounce higher than the price the company used to calculate its CY2013 guidance, Northern Star considers there is scope for it to further grow its cashflow prediction.