Northern Star Resources is looking at a solid boost to 2018-19 production guidance after topping its 2017-18 guidance quite easily.
The company said yesterday in its June quarter and June year production and sales report that it is looking to lift output to a range of 600,000-640,000oz at an all in sustainable cost (AISC) of $A1,025-1,125/oz ($US758- $US832/oz).
Thanks to a solid June quarter the company boosted production for2017-18 to 575,121 oz, which exceeded the top end of the Company’s guidance of 540,000-560,000 oz for the year.
Gold sold was 570,110 oz at an AISC of $A1,029/oz (US$761/oz), which was within the guidance range of $A1,000-1,050/oz.
The strong cashflow resulted in cash and equivalents rising to $A512 million at June 30, an increase of $A73 million from March 31, despite paying $A27 million in dividends during the June quarter.
Buoyed by this strong performance Northern Star has increased its 2019 financial year exploration budget by 33% to a record $A60 million and a further $A74 million has been budgeted for capex in the coming year.
Northern Star Executive Chairman Bill Beament said the quarter’s results provided an insight into the substantial cash-generating capacity which was a direct result of the Company’s organic growth strategy.
“The hugely successful exploration program is the cornerstone of our growth and ultimately our exceptional financial returns,” Mr Beament said in a statement yesterday (https://www.asx.com.au/asxpdf/20180718/pdf/43wlj33fph0x9b.pdf)
“The vast expansion in our gold inventory, which in FY2017 came at a cost of just A$24/oz, has underpinned mine life visibility of more than 10 years and the growth in annual production to our targeted rate of 600,000oz.
“The success of this strategy is demonstrated by the fact that we generated record underlying free cashflow of more than A$93 million in the June quarter.
“Our focus is now on achieving further growth in our inventory and production, which will in turn drive our free cashflow and overall financial returns.
“Given the crucial role exploration has played in our success, we are delighted to increase our exploration budget for this financial year by one-third to a record A$60 million,” he said.
Northern Star will provide a reserve-resource upgrade early next month as part of the Company’s annual strategic update and financial results.
North Star shares eased 0.8% to $7.15.
