Northern Star sets record exploration budget as reserves rise

The Pogo operation. Image: Northern Star Resources

Northern Star Resources has boosted its group reserves by 35 per cent to 5.4 million ounces, at a time when numbers in the gold industry across Australia and overseas are falling.

Its Pogo mine in the United States is forecast to lead Northern Star’s next round of organic growth after posting a maiden reserve of 1.5 million ounces.

Pogo also had a 43 per cent resource increase to 5.95 million ounces at 9.6 grams per tonne, which is the largest resource in the history of the project.

Northern Star is confident the group reserve boost paves the way for the next round of organic production growth – the next stage in the company’s cycle.

The company has budgeted a record $76 million for exploration this financial year. The funds will be spent across the Pogo mine, the Jundee operation in the northern Goldfields and the Moonbeam underground in Kalgoorlie.

Northern Star executive chairman Bill Beament said the inventory growth was particularly notable given the wider trend of reducing resources across the gold industry both within Australia and overseas.

“These outstanding results show that the Northern Star cycle of investing in exploration and development continues to drive the company’s operational and financial success,” Beament said.

“Not only have we grown our world-class reserve and resource inventory by one-third despite mining nearly one million ounces in the 2019 financial year, we have increased the grades and the size of the crucial measured and indicated category.”

The increased reserve also features a 16 per cent improvement in reserve grade to 4.4 grams per tonne.

Pogo is on track for further production growth in this financial year, with output in the second-half forecast to be in the range of 120,000 to 140,000 ounces.

Beament said the results at the Australian operations were also exceptional: “Kanowna Belle’s resources rose seven per cent with a 48 per cent increase in grade, Jundee’s resources grew seven per cent to 4.55 million ounces and the overall grade of resources at the Kalgoorlie operations is up 45 per cent.

“Almost everywhere we look at the Australian operations, there has been strong growth.”

Northern Star targets a production range of 800,000 to 900,000 ounces at an all-in sustaining cost of $1200 to $1300 an ounce in the 2020 financial year, following “a consolidation of the record production levels” achieved in the past period.

To keep up to date with Australian Mining, subscribe to our free email newsletters delivered straight to your inbox. Click here.