Northern Star Resources will invest $US30 million ($43 million) in an expansion of the processing plant at its Pogo gold mine in Alaska.
Under the expansion plan, the annual throughput capacity of the Pogo plant will be increased from one million tonnes to 1.3 million tonnes.
Northern Star is set to begin work on the expansion this financial year, with the company initially investing $US10 million on the project during that period.
The company expects to complete the project early in the 2021 calendar year, with the final $US20 million to be invested in the 2021 financial year.
Northern Star executive chairman Bill Beament said the decision to increase Pogo’s production rate reflected the company’s significant confidence in the asset.
“We now know that Pogo in the future can comfortably sustain a mining rate of 1.3 million tonnes a year, the progress we are making and the visibility we now have, shows that this is the optimal run-rate for Pogo in terms of sustainability and cost-effectiveness,” Beament said.
“With this confidence in the mining operation now well-established, we will move quickly to begin expanding the plant, driving further efficiencies in the process.”
Beament said Northern Star’s confidence in the outlook for Pogo was also underpinned by the strong exploration results being generated from the discovery at the Goodpaster prospect, located one kilometre from the existing mining areas.
Since acquisition, Northern Star has rapidly advanced exploration drilling in the initial Goodpaster area with mineralised intersections now known to extend over a strike distance of 2.3 kilometre, to a depth of 500 metres.
Northern Star reported the $US30 million investment was in addition to the company’s capital expenditure budgets and will be funded from ongoing cashflow.