Northern Star aims to grow mine lives
THE CONFERENCE CALLER: Prior to its presentation at Diggers & Dealers, Northern Star Resources (ASX: NST) released an announcement declaring its campaign to grow the life of each of its five mines is already gaining momentum.
The declaration came on the back of drilling results from outside the existing resources at its Pegasus deposit and Paulsens mine.
The latest results at the Pegasus deposit, which is part of the Kundana project (NST: 51%) on the outskirts of Kalgoorlie in WA, extend the known mineralisation to 100 metres below the current resource and expand the known strike length by 150m to 850m.
The company announced a 115 per cent increase in the resource at Pegasus in June this year, which took it to 2.1 million tonnes at 11.4 grams per tonne gold for 763,000 ounces.
Pegasus will cost Northern Star just $10 million to develop, with first production scheduled for the end of this financial year.
It will contribute 50,000 ounces to the company’s annual production from the middle of 2015.
Pegasus sits on the K2 structure, which runs for 14 kilometres and is already known to host many of the Kundana deposits including Rubicon and Hornet.
The K2 structure will be a feature in the $50 million exploration and drilling campaign which Northern Star has planned for its five operations.
Speaking to an auditorium full of admiring, yet envious, peers, Beament recalled how the previous year he had set out the company’s clear goals.
These were, he said, consisted of:
To take Northern Star to be producing 100,000 ounces of gold per annum at an all-in sustaining cost of approx. $1000 per ounce;
To grow production substantially while maintaining margins and total shareholder returns; and
To achieve critical mass from a low cost diversified asset base and significant mine lives, in excess of five years demanded by global investors.
“We are producing 600,000 ounces per year from five mines at all-in sustaining costs of $1050,” Beament said.
“Our next key goal, though, is to grow mineral inventory needed to underpin long mine lives.”
It would appear as though the company is indeed well on track as Beament read out its recent production achievements across its suite of mining projects.
Northern Star sold 116,000 ounces of gold during the recent June Quarter out of its Paulsens, Plutonic, Kanowna Belle and Kundana mines at $1032 all-in sustain costs.
The company’s most recent acquisition, the Jundee mine also had a good quarter producing 75,000 ounces at an all-in sustaining cost of US$724 an ounce.
“We poured 23,400 ounces of gold out of Jundee, under our ownership last month,” Beament said.
The bottom line for Northern Stars operations, including Jundee, for the June Quarter produced an annualised rate of 700,000 ounces of gold.
“This compares well with the guidance we provided when we acquired Jundee, which was 550,000 to 600,000 ounces at an all-in sustain cost of $1050 per ounce,” Beament continued.
“And that remains our current guidance.”
Beament went on to explain the company’s next target to be a two-stage strategy consisting: to maintain production and cost performance with an ongoing emphasis on productivity and further cost reductions; and growing its metal inventory to underpin long mine lives at each of its operations.
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