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Gold miners reap strong gold prices

Northern Star Resources, Regis Resources and Red 5 have all recorded an increase in gold sales for the first half of the 2023–24 financial year (H1 FY24), as did Gold Road Resources in its 223 full-year results.

Northern Star

 Northern Star remains on track to meet its FY24 guidance through the sale of 781,000 gold ounces (oz) at an all-in sustaining cost (AISC) of $1878/oz and all-in costs of $2653/oz.

The gold miner also maintained a strong balance sheet through $2.2 billion in revenue, a 15 per cent increase from the prior half year. Northern Star cited a higher average gold price being realised as the reason.

Northern Star saw 50 per cent grow in cash earning, with the total for H1 FY24 being $702 million.

The company also earned $889 million in underlying earnings before interest, taxes, depreciation, and amortisation (EBITDA), $229 million in net cash and $1 billion in cash and bullion.

“We are incredibly proud of our team, who have delivered this record half year result,” Northern Star managing director Stuart Tonkin said.

“This interim result is a glimpse of the cash-generating potential that our business is positioned for on a sustainable basis as we reach the halfway mark of our low-risk, five-year profitable growth strategy.

“The highlight of our strong half was the performance of the Kalgoorlie Production Centre, which contributed more than half of the group’s EBITDA and record EBITDA margins of 44 per cent as our largest asset – KCGM (Kalgoorlie Consolidated Gold Mines) – began a new era of mining high-grade Golden Pike North material.”

Regis Resources

The third largest gold miner on the ASX saw its gold sales revenue increase to $550 million from 211,010oz sold at an average price of $2607/oz.

The company also recorded an underlying EBITDA of $167 million and $126 million in cash flows from operating activities, with $160 million invested in future growth.

“The first half of FY24 will be remembered as the period when Regis Resources delivered a number of very significant positive outcomes to position it well for the future,” Regis managing director Jim Beyer said.

“We have had key assets, Tropicana’s Havana Cutback and Duketon’s Garden Well South Underground, move into commercial production and start delivering on their value promise, and significantly, the company was finally able to break free of its long running hedge book.”

Regis closed out H1 FY24 with $155 million in cash and bullion and $145 million in net debt. Its group production and AISC guidance for FY24 remains unchanged.

Red 5

Red 5 managing director Mark Williams said the company’s H1 FY24 financial performance was underpinned by a “solid” operational performance at its King of the Hills (KOTH) and Darlot mines.

The company recorded $283.5 million in sales revenue through the sale of 107,470oz. This resulted in the company posting a net profit after income tax of $29 million.

“The increased gold production and sales flowed through to a 77 per cent increase in sales revenue, strong cash in-flows and a bottom-line net profit that represents an almost $50 million increase on the previous corresponding half,” Williams said.

A total of 108,027oz was recovered during the period ending December 31 2023. The gold was recovered from 2.47 million tonnes of ore processed at an average head grade of 1.47 grams per tonne.

“This operational performance enabled us to strengthen our balance sheet, with $25 million in debt repaid in the period reducing our debt balance to $102.8 million,” Williams said.

“This positions the business for longer term growth as the operations continue to hit their straps.”

The results follow Red 5 and Silver Lake Resources revealing their plans to merge to create a ~445,000 ounce per annum diversified mid-tier gold company.

“This represents an exciting inflection point for Red 5 shareholders and follows the successful ramp-up at KOTH to achieve steady-state production,” Williams said.

“With a sector-leading balance sheet, the merged company will be very well placed for future growth.”

Gold Road 

Gold Road delivered $472.1 million in revenue from gold sales in 2023, a record for the company.

The achievement was bolstered by fully unhedged gold sales of 161,472oz at an average realised gold price of $2924/oz.

Gold Road documented a record $250.1 million in EBITDA, $115.7 million in net profit after tax and $233.6 million in operating cash flow. A record group free cash flow was also delivered, which equalled $140.2 million.

“Gold Road ended the year in a strong position with cash and short-term deposits of $143.8 million after cash outflows of $63.4 million related predominately to a strategic investment in De Grey Mining and cash dividend payments of $15.5 million,” Gold Road said.

The company remains debt free and its gold in circuit, doré and bullion on hand is valued at about $5.4 million.

Gold Road also saw success in its operations, with its Gruyere mine producing over 1.2 million ounces since its first gold in June 2019.

Gruyere, which is shared between Gold Road and Gold Fields through a 50/50 joint venture, is anticipated to produce between 300,000–335,000oz in 2024.

“Studies and drilling (have) commenced to test further mining opportunities beneath the Gruyere ore reserve and at the Gilmour mineral resource at (the) Yamarna (belt),” Gold Road said.

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