Northern Star boosts output

Northern Star Resources has doubled its March quarter gold production after finalising the acquisition of three Barrick Gold assets during the period.

Northern Star said it produced 50,219 ounces of gold in the three months ending March, up 53 per cent from the same time last year.

The jump in output was attributed to the acquisition of the Plutonic, Kanowna Belle and Kundana gold operations, which were bought from Barrick Gold in two separate transactions worth about $100 million.

US-based Barrick Gold, the world’s largest gold producer by output, has been offloading non-core and underperforming assets in a bid to boost profit margins.

Northern Star managing director Bill Beament said the acquisitions would help the company to achieve its goal of producing 350,000 ounces per year at all-in sustaining costs of $1,050 per ounce.

“As we continue to drive productivity at each of our new operations and bring the Pegasus deposit at Kundana into production it will become clear that we will meet our production and cost guidance,” Mr Beament said.

Northern Star reported revenue for the period of $62.5 million after selling 43,307 ounces of gold at an average price of $1,444 per ounce.

All-in sustaining costs for the March quarter were $1,167 per ounce.

Mr Beament said as the new assets were integrated into the company’s portfolio it would generate substantial growth in its free cash flow.

The company expects to produce between 180,000 and 190,000 ounces of gold for the financial year ending June.

Mr Beament said last month at a general shareholder meeting that the company was planning at least one more acquisition.

“We do see the ultimate size of this business as 500 or 600,000 ounces a year. We want to bed these (newly acquired) assets in, but that does mean we need to do one more transaction in a reasonable space of time.”