Northern Star lifts earnings, dividends

Shares in Northern Star Resources have continued their steady recovery back towards record levels after the gold miner reported improved half-year profits, declared higher dividends and foreshadowed further growth.

The Subiaco-based miner reported a 54 per cent jump in net profit after tax to $126.8 million while its interim dividend was lifted 25 per cent to 7.5¢ a share, fully franked.

Executive chairman Bill Beament said the results demonstrated the company’s financial strength, which was underpinned by the substantial cashflow now being generated by four Tier-1 assets.

“The fact that out EBITDA rose 45 per cent to $322 million speaks volumes about both the strength and quality of our business,” Mr Beament said.

“The combination of these earnings, cashflows and overall returns is the result of our highly disciplined approach to capital investment, whether it be through exploration, development or acquisition.

“This reflects our long-standing mantra that we are a business first and a mining company second.”

The interim results were generated on the back of gold sales of 398,640 ounces.

The company’s production guidance for the second half is 520,000-640,000oz, including a six-month contribution from the KCGM Super Pit in Kalgoorlie, which suggests the company could deliver even better earnings in future.

Mr Beament said the continuing operational progress at the Pogo mine in Alaska (after some earlier setbacks) and record high gold prices would also support future cashflow.

“Our Australian operations performed exceptionally well, as demonstrated by the 47 per cent increase in their EBITDA to $352 million at an exceptional margin of 52 per cent,” he said.

“We are looking forward to reaping the benefits of the KCGM acquisition, which we believe will drive more substantial growth in our net cashflow while maintaining strong overall financial returns.”

Mr Beament said Northern Star was making rapid progress on its review of the Super Pit, in partnership with co-owner Saracen Mineral Holdings.

“This is one of the best gold systems in the world and between us, we have some of the best open pit and underground mining specialists in the world assessing the operation and its potential.”

Northern Star’s share price edged 5 cents higher to $13.67 today.

The stock hit an all-time high of $14.05 in July last year before falling sharply to $7.85 in November, after the company disclosed various operational issues, including at Pogo.