Northern Star dividend up 33% on strong results

Northern Star Resources has a declared an interim dividend of 6 cents per share, up 1.5 cents per share on its previous dividend, after its recently acquired Pogo gold mine in Alaska underpinned strong growth for the six months to December.  

The rise in dividend was in line with the company's policy of paying out 6 per cent of revenue, which was an increase of 43 per cent to $633.5 million for the first half of the financial year, compared with revenue in the previous corresponding period.

In a statement, the Subiaco-based miner said profit after tax rose 4 per cent to $82.1 million, despite it spending a record $83 million on exploration and expansion, including a $10 million investment at the Pogo operation.

Chief executive Bill Beament said better-than-expected results at the underground Pogo project, the $347 million acquisition of which was announced in August, was a key factor behind its strong performance.

“As yesterday’s announcement demonstrated, the exploration results we are generating at Pogo are world class and will help us achieve our objective of growing mine life, production and cash flow there,” Mr Beament said.

“But these results don’t come for free.

“We need to invest in Pogo in the same way as we have invested in our other tier-one operations.”

Northern Star’s Australian operations also grew, with its earnings before interest, taxes, depreciation and amortization up by 13 per cent to $240 million.

“We generated an industry-leading return on equity of 20 per cent, excluding the Pogo acquisition, which is particularly exceptional when compared to the Van Eck GDX index five-year average of negative 2.9 per cent,” Mr Beament said.

The company said it was on track to meet its 2019 financial year guidance of 850,000 to 900,000 ounces at all-in sustaining costs of $1,125 to $1,225/oz.

According to BNIQ data, Northern Star is the fourth largest gold miner in Western Australia, by output.

It produced 575,000oz of gold from its operations in the state last financial year.

Shares in Northern Star were up 7.47 per cent to trade at $9.64 each at the close of trade.