Pogo pushes Northern Star to record gold sales

Pogo. Image: Northern Star Resources.

Northern Star Resources is confident the integration of the Pogo mine in the United States into the company’s gold portfolio is on track.

The company today highlighted a record quarter and full-year of gold sales that has been underpinned in part by the progress made at Pogo, the Alaskan site it acquired for $US260 million ($375 million) last year.

Northern Star sold 232,042 ounces of gold at an all-in sustaining cost (AISC) of $1238 an ounce across its operations during the June quarter. In the 2019 financial year, the company sold 840,580 ounces at $1296 an ounce.

Pogo delivered sales of 48,009 ounces during the June quarter, a 33 per cent increase on the previous period, but below the 59,567 ounces and 57,534 ounces sold during the first two quarters of the 2019 financial year.

The company’s costs at Pogo in the June quarter did remain much higher than the company-wide average at $1724 an ounce, but improved by 18 per cent on the previous quarter’s $2062 an ounce.

Northern Star chairman Bill Beament said the progress now being made at Pogo vindicated a strong belief in the ability of the site’s gold system to form the company’s third pillar (alongside the Kalgoorlie and Jundee operations).

“We are confident that Pogo’s increasing rates of mine development and rising stoping tonnages will deliver higher gold production and lower costs,” Beament said.

“This will occur against a backdrop of a growing high-grade inventory in a Tier 1 location, all of which is entirely consistent with our overall objective of maximising financial returns for Tier 1 mines with long lives.”

Northern Star’s operations in Western Australia returned record sales of 184,033 ounces at $1111 an ounce during the quarter.

The Kalgoorlie and Jundee operations both finished at the top end of their full year sales guidances with 340,007 ounces and 299,236 ounces of gold sold, respectively.

Northern Star’s improved production results also gave it record cashflow of $104 million in the June quarter.

Beament noted that the current spot gold price is $200 an ounce higher than the average price realised by the company during the quarter.

“Had Northern Star achieved the current spot price throughout the quarter, it would have generated an additional $46 million in revenue,” the company reported.

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