Alaskan delays hit Northern Star’s production

Delays at Northern Star Resources’ Pogo mine have dented the company's quarterly production, but the gold miner forecasts the next quarter’s production will be a record.

Northern Star sold 185,296 ounces worth of gold for the March quarter, a decrease of 12 per cent from the December quarter, at an all-in sustaining cost of $1,369 an ounce, compared to $1,365 in the prior quarter.

Its Australian operations sold 149,069 ounces at an AISC of $1,200 an ounce, while its US operations sold 36,227 ounces at an ASIC of $2,062 an ounce.

It recorded operating cash flow of $63 million for the quarter, compared to $110 million in the quarter prior, primarily due to disruptions and changes at its Pogo mine in Alaska.

In a statement, the company said its Australian operations performed comfortably within guidance for the quarter, but its US operations was impacted due to a delay in equipment delivery, with only five the scheduled sixteen pieces of underground mobile plant arriving in the quarter.

“The delivery of the remaining eleven units in the June quarter will see productivities and efficiencies continue to rise and lower the unit costs,” it said.

“Turnaround of Pogo and ongoing strong performance at Australian operations are expected to deliver record group quarterly production in the June quarter.”

Northern Star commenced a new mining method at Pogo late in the March quarter, and executive chairman Bill Beament said it drove costs up temporarily.

“These changes are starting to pay dividends, as the results of March and April show,” he said.

Around 45 per cent of gold sold over the quarter was sold in March.

"We always said it would take 18 months to implement our strategy at Pogo, so despite the temporary delays we are still on schedule,” Mr Beament said.

Northern Star's full-year production guidance remains between 850,000 and 900,000 ounces.

But the company increased its all-in sustaining cost guidance from $1,125 to $1,225 an ounce to $1,225 to $1,275 an ounce.

Shares in Northern Star closed 2.48 per cent lower to $8.26 each.