Northern Star Resources Limited (ASX: NST) has released its activities report for the three months to 31 Mach 2023.
March Quarter key points
Environment, Social and Safety (ESS)
- LTIFR at 1.0 per million man hours
- Engineering design and supply contracts for Jundee renewable energy project advanced
Production
- Gold sold totalled 363koz at an AISC of A$1,813/oz (US$1,240/oz) and AIC of A$2,426/oz
- March quarter performance by production centre:
- Kalgoorlie: 191,031oz gold sold at an AISC of A$1,781/oz
- Yandal: 125,072oz gold sold at an AISC of A$1,627/oz
- Pogo: 46,978oz gold sold at an AISC of US$1,668/oz
- Group production slightly lower than expected primarily because of extended mill downtime at KCGM and Pogo, which are now largely resolved; Pogo mill motor repaired and resumed production in April
- Production shortfall offset by total cost improvement, in dollar terms, across all operations
Discovery and Growth
- Advancing five-year profitable growth pathway:
- Kalgoorlie: KCGM material movements on track to enable planned access to higher-grade ore volumes
- Yandal: Thunderbox mill expansion advances to sustainably deliver 6Mtpa nameplate capacity
- Pogo: Focus on optimisation initiatives continues
- During the quarter, A$191 million spent on growth capital and A$34 million on exploration
Financial
- Strong balance sheet with net cash of A$102 million at March 31; cash and bullion of A$452 million after A$124 million dividend payment on March 29
- Best quarter YTD for cash generated at operations, after capex and exploration spend
Corporate
- A$300 million on-market share buy-back program 42% complete
- US$600 million senior guaranteed notes issued at an interest rate of 6.125% per annum, due April 2033
FY23 Outlook
- Maintain FY23 production guidance of 1,560-1,680koz gold sold; ASIC guidance revised to A$1,730-1,760/oz due to operational impacts at KCGM and Pogo
- Maintain FY23 exploration budget of A$125 million; growth capital budget revised to approx. A$700 million from increased waste volumes at KCGM
Commenting on the March quarter performance, Northern Star managing director Stuart Tonkin said:
“This quarter was a challenging one for Northern Star but we have emerged with positive momentum, and the prospect of improved production across the group, to remain on track for a strong finish to FY23. Unplanned mill outages at KCGM and Pogo have been addressed and the team is now focused on delivering our full-year production guidance.
“I am extremely grateful to the Pogo operations team, which worked tirelessly to repair the damaged mill motor in a safe, cost-efficient and timely manner. Pogo has returned to normalised operating levels with a continued focus on high-grade stope ore.
“Northern Star was able to improve the AISC performance across most of our assets with total costs, in dollar terms, lower than in the previous quarter. Unit costs will reflect this effort on increasing production. Navigating the current cost environment remains challenging despite the benefits of our size and scale as well as our internal contracting business – Northern Star Mining Services.”
