10/02/2021 - 14:59

Goldminers lift profit

10/02/2021 - 14:59

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Northern Star Resources and Saracen Mineral Holdings have reported strong growth in production and earnings, just days ahead of their merger taking effect.

Goldminers lift profit
MERGING: Bill Beament (L) with Raleigh Finlayson.

Northern Star Resources and Saracen Mineral Holdings have reported strong growth in production and earnings, just days ahead of their merger taking effect.

The merger of the two Perth-based miners is due to take effect from Friday 12 February.

They are already joint owners of Kalgoorlie’s Super Pit and together will move up the ranks of global gold miners.

Northern Star has reported a 46 per cent increase in statutory net profit to $184.5 million.

Its underlying net profit was even stronger, up 63 per cent.

The company has lifted its interim dividend by 27 per cent to 9.5 cents per share.

Northern Star had gold sales of 480,431 ounces and said it was on track to meet its full-year production guidance of 940,000oz to 1,060,000oz.

Executive chair Bill Beament said the record performance showed the company’s growth strategy was proceeding to plan.

“Our strategy is aimed at ensuring Northern Star generates strong growth at all levels while maintaining its industry-leading financial returns,” he said.

Mr Beament said the result came despite investing $108 million in exploration and expansionary capital and directing 39 per cent of gold sales into hedges, which meant revenue was over $100 million lower than at spot prices.

“We are also generating significant growth in our business while maintaining our superior returns, as shown by the annualised average return on equity of 17.4 per cent,” he said.

He said the enlarged Northern Star Group was primed for more growth at all levels, further increasing returns for shareholders.

“After the Saracen merger is implemented on February 12, our combined operations have a clear pathway to an annual production rate of two million ounces.

“This growth will be driven by organic sources and incur one of the lowest capital intensities in the industry, ensuring that it is not just strong growth but is also financially rewarding growth.

“It will also mean that Northern Star is growing at a time when so many of our global peers have flat or declining production and inventories.”

Meanwhile, Saracen has reported a 74 per cent lift in interim profit to $120.5 million.

This was based on gold sales of 255,938oz, up 24 per cent.

Managing director Raleigh Finlayson said the results showed the company’s assets were top shelf, generating strong cash flow from strong margins and underpinned by long mine lives.

Saracen will pay a 3.8 cents per share special dividend, as part of its merger deal.

 

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