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Northern Star post-merger earnings drive higher dividend

Northern Star

Northern Star Resources has secured a record $648 million in earnings following its merger with Saracen Mineral Holdings, paving the way for further growth across its operations.

Managing director Stuart Tonkin said the earnings, which increased by 10 per cent from the previous year, demonstrated the company’s strong position following the merger.

“With the completion of the merger, we have established a simple, effective strategy based on our three production centres in world-class locations,” Tonkin said.

The record earnings will also benefit shareholders through Northern Star’s new dividend policy, which will provide a total annual dividend payment of 20-30 per cent of the $648 million cash earnings.

Northern Star will reward its shareholders with a final dividend of $0.95 cents per share.

The company’s revenue from its gold sales also rose by 40 per cent to 2.8 billion, which was driven by an increase of the average gold price to $2273 per ounce.

Northern Star recovered 1.6 million ounces of gold in the 2020-21 financial year, up by 13 per cent from the previous period, but its all-in sustaining costs (AISC) increased from $1350 to $1483 per ounce.

“We have a clear five-year pathway to annual production of two million ounces a year with a strong emphasis on ensuring it is profitable growth,” Tonkin said.

“This strategy involves investing capital in those projects which will generate the strongest returns and actively managing our asset portfolio to maximise this outcome.”

Northern Star sold 472,089 ounces from its Kalgoorlie Consolidated Gold Mines (KCGM) operations in Western Australia, a significant increase over its 115,825-ounce sales prior to combining with former joint venture partner, Saracen.

“We have an enviable asset base and world-class inventory with significant scope for further organic growth,” Tonkin said.

“And as these results show, we have the balance sheet and cash strength to unlock the full value of these opportunities in a way which will drive strong financial returns.”

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