Northern Star Resources and Saracen Mineral Holdings have both delivered operational records just weeks shy of their proposed merger being completed.
Saracen recovered record gold from its Australian mines as it soared on bullish gold prices during the December quarter.
The company delivered nearly 310,000 ounces of gold, a record achievement that was replicated at its Carosue Dam operation in Western Australia.
Saracen produced more than 58,000 ounces at Carosue Dam, a figure that is comparable to the company’s attributable production of over 59,000 ounces at the Super Pit in Western Australia.
Such achievement was guided by Saracen’s mill expansion from 2.4 million tonnes a year to 3.2 million tonnes a year, which was commissioned earlier than expected and contributed to Carosue Dam’s record.
Saracen sold more than 150,000 ounces of gold during the quarter at an average price of $2322 an ounce, up from $2138 that was realised in the 2020 financial year.
Saracen managing director Raleigh Finlayson said the company had met or exceeded all its operational, financial and corporate objectives for the quarter.
“Our production centres performed extremely well, resulting in record production for the six months,” he said.
“We also continued to invest in our growth and future-proofing strategy, which will help ensure the Saracen assets meet the targets set as part of the merger with Northern star.
“This is the last quarterly report for Saracen but it also marks the start of a new chapter which will see shareholders benefit handsomely from the increased scale, synergies, flexibility and outstanding growth opportunities which will stem from our unique merger.”
Saracen expects to execute its merger with Northern Star on February 12, which is backed by 98 per cent of approving shareholders.
Northern Star has also ended what could be its last quarter as a singular company with its gold production reaching the upper end of its production guidance.
The gold miner is well on the pathway to annual production of its 1.6-million-ounce guidance, with the potential to push this out to two million ounces.
Northern Star produced a total of 252,899 ounces during the December quarter, representing an 11 per cent increase on the prior quarter and at the pointy end of its 226,000 to 254,000 ounces goal.
Gold sales from Northern Star’s smaller Western Australian operations Yandal and Kalgoorlie supported the company’s spending to increase Super Pit activity, which boosted its open pit movement by 22 per cent compared with the September quarter.
The company sold 71,731 ounces at an all-in sustaining cost (AISC) of $1968 per ounce at Kalgoorlie, and 58,565 ounces from Yandal at an AISC of $1203.
Northern Star executive chair Bill Beament said the company met its operational, financial and strategic goals on all levels, allowing for significant debt reduction in the face of the upcoming merger.
“It was a very robust performance with strong production and margins,” he said.
“Our Australian operations, including (the Super Pit) performed very well. The results at Yandal were once again exceptional and further progress was made in our push to increase production and lower costs at our Kalgoorlie operations.”
Beament confirmed that preparations for the Saracen merger were “proceeding to plan”.
“I am very confident that the combined group is on tack to meet the production and financial targets we have outlined,” he said.
“The potential productivity gains and growth opportunities are immense.”
The executive chair also recognised the efforts of Northern Star’s international operations at the Pogo mine in Alaska, which progressed its mill expansion to 1.3 million tonnes per annum despite managing 100-plus cases of COVID-19 during the December quarter.
“Our (Pogo) team have managed more than 100 cases of COVID during the quarter. This had inevitable impacts on productivity at many levels but despite this, nearly 59,000 ounces were mined in the quarter,” Beament said.
“This is a huge credit to our people at Pogo and I thank them enormously for their dedication in such difficult circumstances.”