Northern Star stocks up on maiden profit

Northern Star Resources shares have spiked after the company announced a maiden $16.2 million net profit for financial year 2010-11.

The gold miner said the profit came despite a $22 million write-down associated with the acquisition of the Paulsens gold operation, near Pannawonica, and a $24 million deduction due to depreciation and amortisation.

Northern Star raked in revenue of $114 million, chalking up operating costs of $42 million, both up from a base of zero the previous financial year.

The company produced 87,069 ounces of gold at Paulsens, at an average realised gold price of $1,367 per ounce.

Cash costs averaged $588/oz, Northern Star said.

By close of trade today, Northern Star’s stock had gained 11.6 per cent, to trade at 48 cents.

Managing director Bill Beament said the company had enjoyed an exceptional year since acquiring the Paulsens mine.

“Paulsens has provided Northern Star with an outstanding financial foundation on which to grow production and profits,” Mr Beament said.

“We are going to utilise this strength and the flexibility that comes with it to aggressively expand the company through exploration, organic growth and acquisition.”