Northern Star Resources has posted a massive 573 per cent net profit increase after successfully brining a host of newly acquired gold mines into production.
Last year, the company went on a buying spree, picking up Jundee, Plutonic, Kundana and Kanowna Belle mines, taking its gold sales to 292,840oz in the half, up 50,927oz in the previous corresponding period.
Northern Star received an average price of $1,407/oz and all-in sustaining costs were $1,057 an ounce, inclusive of a $49/oz non-cash rehabilitation expense.
This meant revenue for the half was 471 per cent higher at $412.1 million.
The strong result means Northern Star declared a fully-franked dividend to 2 cents a share.
Northern Star Managing Director Bill Beament said the growth in production and free cashflow was extremely satisfying because it showed the company had achieved a key goal of becoming a major Australian gold miner with scale and asset diversity.
“The increased dividend and rise in the Company’s return on equity from 7 per cent to 17.6 per cent half-on half are the most important measures of Northern Star’s achievements,” Beament said.
“Free cash flow, dividends and return on equity are the ultimate gauges of any company’s performance. By contrast, growing production and revenue are of limited value if they don’t generate increased returns for shareholders.”
Northern Star aims to maintain production at an annual rate of 550,000-600,000ozpa at an AISC of $1,050/oz to $1,100/oz.
Not satisfied to rest on its newly acquired assets, exploration is still a major part of the company’s strategy, with $50 million put away to find new deposits.
This exploration campaign is already generating results with an increased resource estimate of 1.1moz at the Pegasus deposit within the Kundana project and a revised resource estimate for the Jundee project.