14/01/2015 - 13:08

Northern Star increases cash flow

14/01/2015 - 13:08

Bookmark

Save articles for future reference.

Northern Star Resources says it is generating over $200 million in free cash flow per year on the back of an expansion of its asset base, lower costs and increased gold sales.

Northern Star increases cash flow
Northern Star managing director Bill Beament.

Northern Star Resources says it is generating over $200 million in free cash flow per year on the back of an expansion of its asset base, lower costs and increased gold sales.

In a statement, the gold producer said the combination of strong production and low costs put cash flow for the December quarter up by $1.6 million to $52.5 million.

“The result stemmed from the sale of 142,556 ounces (of gold) in the December quarter, taking total sales for the six months to 292,840 ounces,” Northern Star said.

“All-in sustaining costs were $1,073 per ounce in the December quarter including a non-cash item of $47 per ounce relating to site rehabilitation liabilities as required under the new World Gold Council Reporting Standard and $1,057 per ounce in the six months.”

Northern Star spent $10.2 million on drilling and exploration activities in the December quarter, $39.8 million less than what was budgeted.

It also reduced its bank debt facility $15 million and returned a $14.5 million dividend to shareholders.

Managing director Bill Beament said the results showed the company’s ability to generate cash flow from its five Western Australian gold mines.

“Our business is generating substantial free cashflow thanks to the scale of our expanded asset base, low costs and strong margins,” Mr Beament said.

“This enviable position means we are well placed to continue paying fully-franked dividends while still investing in growth through exploration and enjoying the benefits of a conservative balance sheet in the process.”

During the December quarter, Northern Star paid a 2.5 cents fully franked dividend for the past financial year, taking the full year’s payout to 3.5 cents per share.

The company said it was preparing for first production at its Pegasus gold mine near Kalgoorlie.

Yesterday, Northern Star said it had intersected high-grade gold at its Paulsens gold mine near Paraburdoo.

Northern Star was trading 0.27 per cent higher at $1.81 per share at 1pm.

STANDING BY BUSINESS. TRUSTED BY BUSINESS.

Subscription Options