Northern Star Resources says its record production during the 2013 financial year largely offset the impact of lower gold prices and led to a record profit, but it hasn’t been enough for the miner to continue with plans to develop its second gold mine.
Northern Star said today it expects to lodge a net profit of more than $27 million for FY13, up from $22 million the previous year.
Gold output was up 32 per cent to a record 88,614 ounces, Northern Star said.
The record result won’t stop Northern Star looking to ensure its margins and shareholder returns remain robust, including reducing exploration and project development spending.
As such, Northern Star said it would put its Ashburton gold project on ice until conditions in the gold sector improve.
The company will continue to make minimum expenditure commitments to ensure it retains ownership of the project, which has an estimated gold resource of more than 1 million ounces.
Northern Star had been planning to develop a 100,000 ounce-a-year gold mine at Ashbruton, which is near Tom Price.
Managing director Bill Beament said it was important for the company to respond quickly to changes in the financial environment.
“WE have sought to strike the right blance between the ened to ensure our business continues to generate satisfactory returns for shareholders while retaining the assets needed to grow over the longer term,” Mr Beament said in a statement.
“This means reducing costs to enable us to keep our team of people and protect our margins.”
At 11:20AM, WST, Northern Star stocks were up 4.1 per cent, trading at 62.5 cents.
