Northern Star Resources Provides Quarterly Activities Report

Northern Star Resources Limited announced that its highly successful organic growth strategy is about to culminate in a surge in free cashflow as the Company hits its 600,000ozpa production target.

The Company expects to produce more than 150,000 ounces in the June quarter as the benefits of its investment in exploration and development flow though to its production and financial results.

In light of this strong forecast, Northern Star has narrowed its FY2018 guidance to 540,000oz – 560,000oz, which is well within its previous range of 525,000oz – 575,000oz. The forecast for all-in sustaining costs is unchanged at A$1,000 – A$1,050/oz.

With Northern Star now having completed the capital investments associated with the 600,000ozpa growth strategy, this production increase is expected to result in a significant surge in free cashflow from the June quarter onwards.

Gold sold in the March quarter totalled 119,976oz at an AISC of A$1,075/oz, taking the total for the nine months to 31 March to 387,254oz at an AISC of A$1,053/oz.

During the quarter, Northern Star continued to accelerate the implementation of its organic growth strategy, investing ~A$33 million in expansionary capital, including exploration, to grow the group’s production and mineral inventory.

After allowing for this expansionary capital, Northern Star generated underlying free cash flow of A$32 million in the March quarter, leaving it with cash and equivalents of A$439.1 million and no debt at 31 March 2018.

Northern Star Executive Chairman Bill Beament said Shareholders were about to reap the rewards of the organic growth strategy initiated by the Company over two years ago.

“This strategy began with the acquisition of Tier-1 assets at an opportune time in the cycle,” Mr Beament said.

“We then invested prudently in exploration at and around these centres. This resulted in the Company establishing mine life visibility of ten-plus years.

“In the latest quarter, we completed the expansionary capital expenditure program stemming from this exploration success, paving the way for us to hit the 600,000ozpa production target in the current quarter.

“The combination of this increased production, low operating costs and completion of the capital investment program will drive free cashflow significantly higher.

“This means our organic growth strategy will have met the ultimate objective of everything we do – maximising financial returns. In the process, it will help ensure we maintain the highest rate of return on equity in our industry and one of, if not the, highest rates of return on the Australian stock exchange.”

Mr Beament said the strategy was also continuing to deliver highly significant exploration results, such as those contained in the ASX announcement dated 20 February 2018, which were yet to be included in the Resource and Reserve inventory.


Disclaimer

The advice given by Kalkine Pty Ltd and provided on this website is general information only and it does not take into account your investment objectives, financial situation or needs. You should therefore consider whether the advice is appropriate to your investment objectives, financial situation and needs before acting upon it. You should seek advice from a financial adviser, stockbroker or other professional (including taxation and legal advice) as necessary before acting on any advice. Not all investments are appropriate for all people. Kalkine.com.au and associated websites are published by Kalkine Pty Ltd ABN 34 154 808 312 (Australian Financial Services License Number 425376). The information on this website has been prepared from a wide variety of sources, which Kalkine Pty Ltd, to the best of its knowledge and belief, considers accurate. You should make your own enquiries about any investments and we strongly suggest you seek advice before acting upon any recommendation. Kalkine Pty Ltd has made every effort to ensure the reliability of information contained in its newsletters and websites. All information represents our views at the date of publication and may change without notice. To the extent permitted by law, Kalkine Pty Ltd excludes all liability for any loss or damage arising from the use of this website and any information published (including any indirect or consequential loss, any data loss or data corruption). If the law prohibits this exclusion, Kalkine Pty Ltd hereby limits its liability, to the extent permitted by law to the resupply of services. There may be a product disclosure statement or other offer document for the securities and financial products we write about in Kalkine Reports. You should obtain a copy of the product disclosure statement or offer document before making any decision about whether to acquire the security or product. The link to our Terms & Conditions has been provided please go through them and also have a read of the Financial Services Guide. On the date of publishing this report (mentioned on the website), employees and/or associates of Kalkine Pty Ltd do not hold positions in any of the stocks covered on the website. These stocks can change any time and readers of the reports should not consider these stocks as advice or recommendations.

 

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s