NORTHERN STAR RESOURCES LIMITED ASX ANNOUNCEMENT
28 October 2016
Australian Securities Exchange Code: NST
Board of Directors
Mr Chris Rowe
Non-Executive Chairman
Mr Bill Beament
Managing Director
Mr Peter O'Connor
Non-Executive Director
Mr John Fitzgerald
Non-Executive Director
Ms Shirley In'tVeld
Non-Executive Director
Mr David Flanagan
Non-Executive Director
Issued Capital
Shares 600 million
Options 3.2 million
Current Share Price A$4.03
Market Capitalisation A$2.4 billion
Cash, Bullion & Investments 30 Sep 2016 - A$350 million
Free cash flow of A$24m after investing A$28m in organic production growth and exploration
Cash and equivalents increased to A$350m at 30 September, up from A$326m at 30 June; Northern Star has no bank debt
110,000oz of gold produced in the September Quarter from continuing operations, just 7,000oz below budget despite 10% reduction in Jundee mill throughput; on track to meet FY17 guidance of 485,000-515,000oz
All-in sustaining costs (AISC) for September Quarter of A$1,091/oz from continuing operations despite reduced mill throughput; on track to meet FY17 guidance of A$1,000-A$1,050/oz
Total gold inventory (gold in circuit and on stockpiles awaiting processing) of
~100,000oz and continuing to grow
September Quarter production:
Jundee Gold Operations:
51,337oz mined and 42,220oz sold at an AISC A$1,168/oz
Kalgoorlie Gold Operations:
47,235oz mined and 49,188oz sold at an AISC A$928/oz
Paulsens Gold Operations:
15,722oz mined and 15,111oz sold at an AISC A$1,406/oz
Sale of the Plutonic mine for A$66m has settled with a special 3¢ fully-franked dividend declared (payable 2 November 2016)
Northern Star's highly successful exploration strategy delivered a 33% increase in Reserves to 2.0Moz after mining 611,000oz in FY16; at a cost of A$50/oz. Total Resources increased to 9.25Moz
Further strong progress made on strategy to grow production to 600,000ozpa in 2018 from organic sources, with substantial exploration success at Jundee and Kalgoorlie operations
The new 50,000ozpa Millennium underground mine commenced development during the quarter
Board restructure announced that will enable Northern Star to further develop its growth strategies and maximise its significant opportunities while maintaining its strong emphasis on operational performance
Northern Star will host a quarterly conference call today at 8.30am AWST (11.30am AEDT), Friday, 28 October 2016. The call can be accessed at http://boardroom.media/broadcast/?refid=&eid=581158e0068c79b661df90a3
Projects |
Paulsens Mine Kanowna Belle Mine Kundana Mines (51% of EKJV) Jundee Mine Central Tanami (25% of JV) |
Listed Investments VXR, DAU, RND, TBR, ALY |
Northern Star Resources Limited (ASX: NST) is pleased to report on a solid quarter during which the Company generated A$24 million in free cashflow while remaining on track to achieve its growth targets.
Cash and equivalents rose by A$24 million over the quarter despite the Company investing A$28 million in its organic growth strategy.
Production totalled 110,000oz, which was just 7,000oz below budget despite the 10% reduction in mill throughput at Jundee. The budget allows for 241,000oz to be produced in the current half with a significant increase in the second half.
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By limiting the impact of the lower Jundee mill throughput, which was the result of reduced capacity while waiting for components, Northern Star remains on track to meet its annual production guidance of 485,000- 515,000oz.
Throughput at the Jundee mill has been running at record rates in October, resulting in significant production increases.
AISC for the quarter were A$1,091/oz. This was actually lower than budget despite the reduced production, reflecting the benefits of the Company's cost-cutting program. Northern Star maintains its FY17 AISC guidance of A$1,000-A$1,050/oz.
All the above production and guidance figures exclude the Plutonic gold mine, which sold for A$66 million, effective from 1 October 2016. A special dividend of 3¢ fully-franked will be paid on 2 November 2016.
Plutonic produced 20,211oz in the quarter at an AISC of A$1,495/oz.
Northern Star continued to enjoy outstanding exploration success during the quarter as part of its organic growth strategy.
As well as identifying new mineralisation at and around its existing operations, particularly at Jundee and Kalgoorlie, the Company made strong progress developing new sources of production. This included the start of development at its 50,000ozpa Millennium underground mine in Kalgoorlie.
This has ensured Northern Star remains on track to achieve an annual production rate of 600,000oz in 2018.
Northern Star Managing Director Bill Beament said the exploration and development programs at the Company's four concentrated centres of production were delivering outstanding results.
"We are finding more gold and developing additional sources of ore at an impressive rate," Mr Beament said.
"These results continue to underpin our confidence in our organic growth strategy, which will in turn ensure we continue to generate some of the highest financial and shareholder returns on the ASX."
Northern Star | Units | Dec-15 Qtr | Mar-16 Qtr | Jun-16 Qtr | Sep-16 Qtr | FYTD |
Ore Hoisted | Tonnes | 886,185 | 881,029 | 907,396 | 742,983 | 742,983 |
Mined Grade | gpt Au | 5.6 | 5.6 | 4.9 | 4.8 | 4.8 |
Gold in Ore Hoisted | Oz | 158,617 | 158,671 | 143,599 | 114,294 | 114,294 |
Milled Tonnes | Tonnes | 970,999 | 891,068 | 1,094,571 | 745,425 | 745,425 |
Head Grade | gpt Au | 5.1 | 5.4 | 4.1 | 5.0 | 5.0 |
Ounces Produced | Oz | 159,133 | 155,848 | 143,580 | 118,759 | 118,759 |
Recovery | % | 91 | 92 | 91 | 93 | 93 |
Gold Recovered | Oz | 145,251 | 142,630 | 130,020 | 109,995 | 109,995 |
Ounces Sold | Oz | 142,017 | 143,469 | 134,110 | 106,519 | 106,519 |
Average Gold Price | A$/oz | 1,484 | 1,640 | 1,684 | 1,720 | 1,720 |
Revenue | A$M | 210.8 | 235.2 | 225.9 | 183.2 | 183.2 |
Cash Operating Cost | A$/oz | 837 | 737 | 843 | 796 | 796 |
All in Sustaining Cost | A$/oz | 1,040 | 985 | 1,056 | 1,091 | 1,091 |
Total Stockpiles Contained Gold | Oz | 70,453 | 73,977 | 80,342 | 81,540 | 81,540 |
Gold in Circuit (GIC) | Oz | 20,816 | 19,409 | 15,136 | 16,065 | 16,065 |
Gold in Transit (GIT) | Oz | - | - | 585 | - | - |
Table 1: Key Group Performance Figures (Quarterly) from Continuing Operations
Northern Star | Units | Dec-15 Qtr | Mar-16 Qtr | Jun-16 Qtr | Sep-16 Qtr | FYTD |
Mining | A$/oz | 561 | 470 | 557 | 508 | 508 |
Processing | A$/oz | 188 | 176 | 214 | 283 | 283 |
Site Services | A$/oz | 62 | 48 | 58 | 59 | 59 |
Ore Stock & GIC Movements | A$/oz | (9) | 5 | (26) | (87) | (87) |
Royalties | A$/oz | 40 | 41 | 43 | 38 | 38 |
By Product Credits | A$/oz | (4) | (3) | (4) | (5) | (5) |
Rehabilitation-Accretion & Amortisation | A$/oz | 2 | 7 | 1 | 5 | 5 |
Corporate Overheads | A$/oz | 35 | 43 | 46 | 54 | 54 |
Mine Development/Sustaining CAPEX | A$/oz | 147 | 171 | 152 | 209 | 209 |
Mine Exploration | A$/oz | 19 | 27 | 14 | 27 | 27 |
All in Sustaining Costs | A$/oz | 1,040 | 985 | 1,056 | 1,091 | 1,091 |
Depreciation & Amortisation | A$/oz | 300 | 337 | 303 | 316 | 316 |
Table 2: Key Group Cost per Ounce Measures from Continuing Operations
Production KPIs Sep Quarter | Units | Paulsens | Kalgoorlie Operations | Jundee | Total |
Total Ore Hoisted | Tonnes | 88,467 | 334,486 | 320,030 | 742,983 |
Mine Grade | gpt Au | 5.5 | 4.4 | 5.0 | 4.8 |
Gold in Ore Hoisted | Oz | 15,722 | 47,235 | 51,337 | 114,294 |
Milled Tonnes | Tonnes | 96,759 | 348,181 | 300,485 | 745,425 |
Head Grade | gpt Au | 5.5 | 4.9 | 4.8 | 5.0 |
Recovery | % | 89 | 94 | 92 | 93 |
Gold Recovered | Oz | 15,047 | 51,725 | 43,223 | 109,995 |
Gold Sold | Oz | 15,111 | 49,188 | 42,220 | 106,519 |
Cash Operating Costs | A$/oz | 984 | 729 | 808 | 796 |
All In Sustaining Costs | A$/oz | 1,406 | 928 | 1,168 | 1,091 |
Depreciation & Amortisation | A$/oz | 416 | 209 | 405 | 316 |
Table 3: Key Quarterly Mine Production Performance from Continuing Operations Discontinued operations quarterly production performance is presented in Table10 below.
FINANCEThe following is a table of the cash, bullion and investments held at the end of each quarter:
Units | Dec-15 Qtr | Mar-16 Qtr | Jun-16 Qtr | Sep-16 Qtr | |
Cash at bank | A$M | $210.9 | $262.3 | $315.3 | $311.3 |
Bullion awaiting settlement(1) | A$M | $9.1 | $17.2 | $1.9 | $25.7 |
Investments | A$M | $5.5 | $6.0 | $8.8 | $12.6 |
Total | A$M | $225.5 | $285.5 | $326.0 | $349.6 |
(1) Bullion awaiting settlement is dore which has been received by the refiner in the quarter and is awaiting settlement.
Table 4: Cash, Bullion and ASX equity investments
The below table sets out the total of surface gold inventories:
Gold Inventories | Dec-15 Qtr | Mar-16 Qtr | Jun-16 Qtr | Sep-16 Qtr |
Stockpiles contained gold (oz) | 70,453 | 73,977 | 80,342 | 81,540 |
Gold In circuit (oz) | 20,816 | 19,409 | 15,136 | 16,065 |
Gold In transit (oz) | - | - | 585 | - |
Total Gold Inventories (oz) | 91,269 | 93,386 | 96,063 | 97,605 |
Table 5: Gold Inventories
The below waterfall chart highlights the September Quarter's operating cash flow together with movements in cash, bullion and investments (A$M):
450
77.5 | 38.3 | ||
16.3 2.4 | |||
3.1 | 349.6 | ||
326.0 | |||
400
350
300
250
200
Opening Operating Cashflow PP&E Exploration Investments Debt Repaid Closing
1.7
The below waterfall chart highlights the underlying free cash flow for the September Quarter (A$M):
24
24
23
23
22
22
21
21
20
20
19
23.6
1.7
2.4
22.9
Q1 Cash, Bullion & Inv
Movement
Working Capital
M&A
Investments
Debt Repaid
Underlying Free Cashflow
3.1
Banking Facilities
Northern Star has in place an undrawn three year A$100 million revolving debt facility with a self-arranged syndicate of Australian and International banks.
Hedging
The below table outlines the Company's current hedging position:
Term | Dec-16 Half | Jun-17 Half | Dec-17 Half | Jun-18 Half | Dec-18 Half | Total |
Ounces | 54,160 | 75,000 | 59,000 | 59,000 | 17,500 | 264,660 |
Gold Price | A$1,673 | A$1,721 | A$1,772 | A$1,804 | A$1,856 | A$1,750 |
Table 6: Hedging commitments
During the quarter, 16,660oz of hedging was added for delivery across the December 2016 quarter at an average of A$1,722/oz.
OPERATIONSPaulsens Gold Operations
Production Summary | Dec-15 Qtr | Mar-16 Qtr | Jun-16 Qtr | Sep-16 Qtr | FYTD | |
Paulsens | ||||||
Ore Mined | Tonnes | 92,772 | 94,755 | 105,453 | 88,467 | 88,467 |
Mined Grade | gpt Au | 7.0 | 8.0 | 5.7 | 5.5 | 5.5 |
Ounces Mined | Oz | 20,730 | 24,336 | 19,293 | 15,722 | 15,722 |
Milled Tonnes | Tonnes | 95,953 | 92,502 | 96,805 | 96,759 | 96,759 |
Head Grade | gpt Au | 7.3 | 8.2 | 5.6 | 5.5 | 5.5 |
Recovery | % | 90 | 90 | 87 | 89 | 89 |
Gold Recovered | Oz | 20,152 | 22,060 | 15,271 | 15,047 | 15,047 |
Gold Sold | Oz | 19,161 | 22,963 | 15,418 | 15,111 | 15,111 |
Cost per Ounce | ||||||
Mining | A$/oz | 447 | 385 | 595 | 601 | 601 |
Processing | A$/oz | 245 | 199 | 307 | 290 | 290 |
Site Services | A$/oz | 74 | 67 | 121 | 83 | 83 |
Ore Stock Movements | A$/oz | (6) | 27 | (58) | (24) | (24) |
Royalties | A$/oz | 38 | 41 | 43 | 37 | 37 |
By Product Credits | A$/oz | (2) | (1) | (2) | (3) | (3) |
Cash Operating Costs | A$/oz | 795 | 718 | 1,006 | 984 | 984 |
Rehabilitation - Accretion & Amortisation | A$/oz | 5 | 5 | 7 | 5 | 5 |
Corporate Overheads | A$/oz | 35 | 44 | 50 | 53 | 53 |
Mine Development / Sustaining CAPEX | A$/oz | 315 | 206 | 242 | 352 | 352 |
Paulsens Mine Exploration | A$/oz | 5 | 26 | 9 | 12 | 12 |
All in Sustaining Costs | A$/oz | 1,156 | 999 | 1,314 | 1,406 | 1,406 |
Depreciation & Amortisation | A$/oz | 390 | 393 | 433 | 416 | 416 |
Table 7: Summary Details - Paulsens
Kalgoorlie Gold Operations
Production Summary | Dec-15 Qtr | Mar-16 Qtr | Jun-16 Qtr | Sep-16 Qtr | FYTD | |
Kalgoorlie Operations | ||||||
Ore Mined | Tonnes | 321,274 | 292,550 | 321,620 | 334,486 | 334,486 |
Mined Grade | gpt Au | 5.5 | 6 | 5.2 | 4.4 | 4.4 |
Ounces Mined | Oz | 56,299 | 56,818 | 54,133 | 47,235 | 47,235 |
Milled Tonnes | Tonnes | 316,904 | 331,698 | 321,103 | 348,181 | 348,181 |
Head Grade | gpt Au | 5.1 | 5.6 | 5.2 | 4.9 | 4.9 |
Recovery | % | 95 | 94 | 95 | 94 | 94 |
Gold Recovered | Oz | 49,606 | 55,861 | 50,819 | 51,725 | 51,725 |
Gold Sold | Oz | 52,187 | 52,052 | 54,592 | 49,188 | 49,188 |
Cost per Ounce | ||||||
Mining | A$/oz | 474 | 436 | 444 | 449 | 449 |
Processing | A$/oz | 128 | 126 | 153 | 324 | 324 |
Site Services | A$/oz | 59 | 21 | 50 | 57 | 57 |
Ore Stock Movements | A$/oz | 5 | 14 | (9) | (130) | (130) |
Royalties | A$/oz | 41 | 42 | 42 | 36 | 36 |
By Product Credits | A$/oz | (5) | (4) | (5) | (7) | (7) |
Cash Operating Costs | A$/oz | 702 | 635 | 675 | 729 | 729 |
Rehabilitation - Accretion & Amortisation | A$/oz | - | 5 | 2 | 5 | 5 |
Corporate Overheads | A$/oz | 35 | 44 | 43 | 55 | 55 |
Mine Development / Sustaining CAPEX | A$/oz | 96 | 95 | 106 | 108 | 108 |
Kanowna Belle Mine Exploration | A$/oz | 22 | 14 | 20 | 31 | 31 |
All in Sustaining Costs | A$/oz | 856 | 794 | 845 | 928 | 928 |
Depreciation & Amortisation | A$/oz | 220 | 212 | 212 | 209 | 209 |
Table 8: Summary Details - Kalgoorlie Operations
Northern Star Resources Ltd. published this content on 28 October 2016 and is solely responsible for the information contained herein.
Distributed by Public, unedited and unaltered, on 28 October 2016 01:21:07 UTC.
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