Commodities, Gold, News, Production

Northern Star strengthens output following Saracen merger

Gold

Northern Star Resources has delivered synergies from its merger with Saracen Mineral Holdings ahead of schedule after smashing production, gold sales and cash flow targets.

The company sold 1.6 million ounces of gold in the 2021 financial year at an all-in-sustaining-cost (AISC) of $1483 per ounce.

This result was bolstered by a solid June quarter that saw the company sell 444,012 ounces of gold from its Kalgoorlie, Yandal and Pogo production centres in Western Australia at an AISC of $1459 per ounce.

The Kalgoorlie production centre contains the Kalgoorlie Consolidated Gold Mines (KCGM), Kalgoorlie Operations and Carosue Dam mine, with Northern Star claiming full ownership of KCGM and Carosue Dam after merging with Saracen in February 2021.

Northern Star also acquired the Thunderbox mine from Saracen as part of its Yandal production centre.

The company has also boosted its gold reserves by 8 per cent to 21 million ounces and resources 15 per cent to 56 million ounces over the nine-month period to March 31, 2021.

Northern Star managing director Stuart Tonkin said the updated reserves show its synergies with Saracen were materialising.

“As we bed down the merger, the savings and the productivities are coming through at numerous levels,” Tonkin said.

“And the scale of our business, now underpinned by Reserves of 21Moz exclusively in tier-one locations, is exceptional.”

Strong gold sales generated $914 million of sales revenue for Northern Star at the end of the June quarter with an average price of $2179 per ounce sold.

The company has $830 million of cash and bullion on hand after spending $215 million in growth capital and exploration.

Tonkin also highlighted that Northern Star had achieved strong operational performance due to the merger.

“It was a strong operational performance from our recently-merged team with production and costs comfortably in line with the undertakings we provided to the market,” he said.

“This flowed through to our financial results, with cash flow rising significantly from the previous quarter, leaving us with cash and bullion of more than $800 million at the end of the financial year.”

The strong results follow yesterday’s announcement that Northern Star would be selling its Kundana assets in Western Australia to Evolution Mining for $400 million.

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