Northern Star takes gold Reserves to 2M ounces
THE DRILL SERGEANT: Northern Star Resources (ASX: NST) announced a 33 per cent increase in the company’s gold Reserves, taking them up to two million ounces.
The company declared the increase was a fillip in regards to its stated strategy to grow production to 700,000 ounces a year in 2018.
Norther Star’s Resources increased by 350,000 ounces to 9.25 million ounces with the new Resource estimate containing a 12 per cent increase in the Measured and Indicated category, taking that total to 4.9 million ounces.
The increases will fill the dent the company has made in its current Reserves, having mined some 611,000 ounces since the previous estimate was calculated a year ago.
Northern Star indicated the additional Reserves have been delivered at a cost of $50 per ounce, which it boasted to be a remarkably low figure given global transaction multiples equated to approximately $500 per reserve ounce over the past 12 months.
These revised estimates also include just one of the five discoveries made by Northern Star over the past year.
The company said it has work underway with the goal of bringing the other four discoveries into the JORC estimate.
“The fact that we are growing Reserves for $50 per ounce, with a very low level of capital intensity associated to those ounces will further strengthen our ability to maintain superior rates of return,” Northern Star Resources managing director Bill Beament said in the company’s announcement to the Australian Securities Exchange.
“This discovery cost is the foundation of our outstanding return on invested capital, which was 28 per cent in the past financial year.
“By combining this cost with our tight production costs, we maximise margins, cashflow and overall financial returns.
“At the same time, our Resource base of 9.25 million ounces shows we have a substantial inventory to underpin our mine lives and future production rates.”
Northern Star pointed out that at Jundee, where total Reserves increased by 21 per cent to 720,000 ounces, it has completed further drilling, which has discovered high-grade mineralisation in a number of areas that have not yet been included in this Resource/Reserve update due to time constraints.
The company’s current Mineral Resource and Reserve summary includes:
Group Mineral Resource Estimate of 83 million tonnes at 3.5 grams per tonne gold for 9.25 million ounces.
Group Mineral Reserve Estimate of 13.1 million tonnes at 4.7g/t gold for 2 million ounces.
These figures, which are estimated to 30 June 2016, represent JORC 2012 combined Resource for the five assets owned by Northern Star.
Email: info@nsrltd.com.au
Website: www.nsrltd.com.au