Northern Star happy with Hermes

Gold miner Northern Star Resources says its recently acquired Hermes deposit in the Bryah Basin could make a ‘significant’ contribution to its annual production.

A scoping study on the Hermes deposit found the project would produce about 86,000 ounces of gold over two to three years at an all-in sustaining cost of $1,095/oz, with an expected capital cost of $10 million.

With potential for pit extensions and underground mining, production at Hermes would also be set to grow to about 100,000oz per annum in the 2017 financial year.

Northern Star has scheduled mining to start at three pits during the middle of next year, with the ore to be trucked to Plutonic via a direct haulage route, which would boost the company’s annual production to 700,000oz per annum.

That’s up from Northern Star’s FY16 forecast production of 535,000-570,000oz at an all-in sustaining cost of $1,050-$1,100/oz.

Managing director Bill Beament said it was now clear that the company’s strategy to rebuild Plutonic after acquiring it last year was paying dividends.

“We bought Plutonic because we were confident that there was a lot more gold to be found,” he said.

“The results of our exploration and development strategy show we were right.

“We have made the investment in identifying and developing these new areas, which will enable us to move away from remnant mining into genuinely new ideas of mineralisation.

“Much of this upfront expenditure is now done and we are starting to see the benefits of the increased grade and lower costs which are at the heart of this strategy.”

Northern Star purchased the Hermes deposit from Alchemy Resources in February for $1.45 million.

Northern Star shares closed 1.5 per cent higher to $2.58 each.