Northern Star forecasts stronger June quarter

Image: Northern Star Resources.

Northern Star Minerals has emerged from the March quarter with a revised operating environment that has performed as expected after being severely impacted by COVID-19.

Despite a number of setbacks, the company sold 239,031 ounces of gold in the March quarter at an all-in sustaining cost (AISC) of $1590 per ounce.

The Australian operations contributed 190,258 ounces of gold sold at an AISC of $1505 per ounce, while the Pogo operations in Alaska, the United States produced 48,773 ounces of gold at an AISC of US$1254 ($1944).

Northern Star’s March quarterly performance delivered an underlying free cash flow of $89 million, after allocating $66 million to growth capital and exploration.

Company chair Bill Beament praised the company’s resilience during the tumultuous start to the year with the company reacting swiftly to manage confirmed cases of COVID-19 among its workforce at Pogo.

“This has been a strong performance from our people across the board in what are very difficult circumstances,” he said.

“We moved pre-emptively to protect our people using the best advice we could get. The initial implementation of these measures had some significant short-term impacts on productivity and production.

“We are confident that these measures, a number of which far exceed those required by health authorities, will protect our people and those in our local communities.

“While it’s not a perfect operational platform at the moment, it is manageable and enables us to continue production.”

In the aftermath of its six recovered COVID-19 cases, the company’s Pogo operations have continued to progress, with ore grades of development and stope ore rising by a combined 12 per cent from the December 2019 quarter to the March 2020 quarter.

However, labour availability and underground productivity has been impacted by the COVID-19 restrictions in the United States.

“There is ongoing underlying progress at Pogo, with production and free cashflow increasing, costs coming down and significant procurement savings expected in the current quarter,” Beament said.

Northern Star’s initial response to COVID-19 during the quarter saw roster changes that reduced mining productivities at the Jundee mine in Western Australia.

However, the company believes the recruitment of extra skilled personnel and the expected completion of the Jundee mill upgrade will boost gold production in the June quarter.

The Kalgoorlie Operations in Western Australia, which are comprised of the Kanowna Belle and Kundana projects, also saw a 10 per cent decrease to gold production due to COVID-19, but a stabilising workforce and introduction of the new Moonbeam deposit stoping is expected to allow Kalgoorlie to bounce back.

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