Northern Star misses guidance but hits record sales

Northern Star Resources’ June quarter and 2019 financial year results have fallen slightly below guidance, but it has still set new quarterly and annual sales records on progress at its Pogo mine in Alaska.

Northern Star recorded fiscal year sales of 840,580 ounces at all-in sustaining cost of AISC of $1,296 per ounce.

This was weaker than its previous financial year production guidance of between 850,000oz and-900,000oz and an AISC guidance of between $1,225/oz and $1,275/oz.

The company said it sold a record 232,042 ounces of gold across its entire operations during the June quarter at AISC of $1,238/oz, including sales of 184,033oz from its Kalgoorlie and Jundee operations in WA.

This fell short of its previous June quarter production guidance of between 235,000oz and 260,000oz and its AISC guidance of between $1,075/oz and $1,175/oz

Pogo sales increased 33 per cent for the quarter to 48,009 ounces, with all-in sustaining costs (AISC) at the mine coming in at $1,748/oz, a fall of 18 per cent compared to the March period.

Production was constrained at the mine during the March quarter due to delays involving its underground mining fleet and the introduction of a new mining method.

Northern Star bought Pogo, which is one of the largest mines in the US, from Japan's Sumitomo in August last year for $347 million.

Executive chairman Bill Beament said he anticipated Pogo would continue its positive momentum.

“We are confident that Pogo’s increasing rates of mine development and rising stoping tonnages will deliver higher gold production and lower costs,” he said.

“With the new mobile mining fleet now in place, there are strong gains in all the key performance metrics.”

Mr Beament noted that the current spot price of gold is over $200/oz higher than the average price realised during the quarter.

The company said if it achieved the current spot price throughout the quarter, it would have generated an additional $46 million in revenue.

Mr Beament also noted on Tuesday the spot price of gold was currently $US200/oz higher than the average recorded across the June quarter, a figure which would have generated the company an extra $46 million in revenue for the period.

Shares in Northern Star have been volatile during today’s trade, recovering from early morning losses to be up 2 per cent to trade at $13.47 at 2.15pm AEST.