Gold miners defy trying times

Local gold miners continue to prove there is still money to be made in Western Australia’s resources playground, with Northern Star Resources, Metals X, Ramelius Resources and Saracen Mineral Holdings all closing higher on the ASX.

Northern Star posted a 79 per cent rise in profit to $65.1 million for the six months to December, with revenue up 3 per cent to $425.3 million.

The company also declared a 50 per cent increase in its interim dividend to 3 cents per share, fully franked.

Northern Star sold 283,573 ounces of gold at an average price of $1,497 per ounce.

Its all-in sustaining costs for the half-year were $1,062/oz.

“These results demonstrate the cash generating capacity of Northern Star based on our current production rate of about 570,000oz a year,” managing director Bill Beament said.

“But more importantly, they highlight the free cashflow Northern Star is set to generate as production grows to 700,000oz a year over the next two years.

Mr Beament said the increased dividend payout reflected confidence in the company’s financial prospects.

“At the same time, we retain a conservative approach to our balance sheet and, importantly, we have ample cash to fund our outstanding organic growth opportunities,” he said.

Ramelius Resources also released its half-year report today, announcing an 8.7 per cent increase in revenue to $75.8 million and a massive 461.5 per cent surge in net profit to $21.9 million.

The gold miner sold 46,766oz over the period at an average price of $1,560, against an all-in sustaining cost of $1,185/oz.

However, the company declared no interim dividend for the half-year.

Saracen Mineral Holdings also delivered good news today, announcing it had poured first gold at its $65 million Thunderbox project just 10 months after the company’s board approved development of the project.

Saracen is now on track to double its production rate to around 300,000oz a year at an all-in sustaining cost of $1,075/oz.

Managing director Raleigh Finlayson said Thunderbox had transformed Saracen into a prominent mid-tier Australian gold producer.

“Thunderbox gives us the level of production and cashflow sought after by international investors while enabling us to remain debt-free,” Mr Finlayson said.

“The potential +10-year life of Thunderbox and the exploration upside at both Thunderbox and Carosue Dam means we have a sustainable production profile with strong growth prospects.”

Meanwhile, Metals X was unable to celebrate with its gold mining peers today after revealing a 94.9 per cent slide in net profit to just $812,341 for the six months to December, with revenue down 2 per cent to $146.3 million.

The slide in profit was on the back of higher costs of deeper underground mining, post-fill requirements and an increase in amortisation rates at its Higginsville gold operation, coupled with similar cost increases at its South Kalgoorlie operation.

Metals X decided against declaring an interim dividend.

The company paid out a 2.95 cents per share dividend for the full 2015 financial year.

Northern Star shares closed 4 per cent higher to $3.87 each, while Saracen shares were 4.9 per cent higher to 95 cents each.

Metals X shares rose 5.5 per cent to $1.04 each, while Ramelius shares were 6.4 per cent higher to 41 cents each at the close.