Northern Star Resources’ acquisition of five gold mines in Western Australia is paying off after the company posted a 32 per cent increase in May gold production figures.
The company reported production of 41,668 ounces in May and said the rise was proof that it was successfully bedding down its recent gold mine purchases.
The Perth-based company bought Barrick Gold’s Plutonic, Kanowna Belle and Kundana gold mines earlier this year for a total of $100 million.
Northern Star has since reached a binding agreement to acquire the Jundee gold mine from Newmont Mining for $82.5 million. The purchase is due to settle on 1 July 2014.
"The production figures across the group are well ahead of Northern Star's publicly-stated targets, under which it aims to produce at a combined annual rate of at least 350,000 ounces from these four mines," the company said in a statement.
The results come from the Paulsens, Plutonic, Kanowna Belle and Kundana (NST 51 per cent) gold mines.
It said that after the settlement of Jundee, the company would aim to produce at the rate of around 55,000 ounces a year at an all-in sustaining cost of less than $1050.
Northern Star managing director Bill Beament said the May results highlighted the affect the company’s efficiency measures were having on its new mines.
“The strong results are particularly pleasing and provide confidence that our integration plan will work equally well in bedding down the Jundee project,” Beament said.
“This success is the direct result of the team that we built ahead of making the acquisitions and the excellent acceptance of the incumbent workforce adopting Northern Star as a Company. That approach meant we could implement our operating methods and efficiency drive immediately we were in the door. “
The company’s rise from junior miner to major player took place in less than six months and at a cost of just $200 million.
Northern Star is now the second-largest ASX-listed gold miner.