Northern Star could see a boost to its mineral resource at the Pogo mine in Alaska after returning strong exploration results outside of the existing resource.
The company agreed to purchase the mine, located in the Tintina Mineral Belt, from Sumitomo Metal Mining and Sumitomo Corp for $US260 million ($347 million) in August last year.
Northern Star spent $35 million on exploration and infill drilling in the 12-month period ending December 31 last year, with a further $15 million budgeted for the second half of 2019.
The drilling has produced several extensions, including results such as four metres at 40.7 grams a tonne of gold in the X-Vein/North Zone area, and 4.9 metres at 14.8 grams a tonne in the Fun Zone.
Northern Star has also defined a new vein system (Central Lodes) over a 650 kilometre strike length that has produced further significant gold intersections.
“Many of these exceptional drilling results come from outside the existing resource and clearly pave the way for a significant increase in the mineral resources,” said Northern Star executive chairman Bill Beament. “And the infill results show we are well on track for a substantial maiden JORC reserve.”
The company has, meanwhile, posted strong financial performance in the six-month period ending December 31 2018 and has no debt.
Northern Star delivered revenues of $633.5 million for the second half of 2018, up 43 per cent on the previous corresponding period. Statutory net profit was also up 4 per cent to $82.1 million. The company also invested a record $83 million in exploration over the period.
Beament said the results showcased the company’s belief in Pogo’s potential, which he said could return similar results to the company’s Australian operations at Kalgoorlie and Jundee.
“We need to invest in Pogo in the same way as we have invested in our other Tier 1 operations,” he said.
Pogo’s existing JORC mineral resource stands at 8.8 million tonnes at an average 14.7 grams a tonne for 4.15 million ounces of contained gold. Northern Star plans to update the project’s mineral resource and reserve in August 2019.
Pogo has produced 3.8 million ounces at an average grade of 13.6 grams a tonne over the past 12 years.
“Pogo is fast turning out to be everything we expected and more,” added Beament. “Our policy of investing in exploration and productivity is generating results which are entirely consistent with our goal of growing Pogo’s mine life, production and cashflow.”