Credit Suisse observes management is genuinely impressed with the exploration opportunity at Pogo and confident it will be its best mine within three years.
The broker notes the mine appears to have been operated for closure prior to Northern Star taking ownership, and while renovation is progressing well it appears to be a larger and longer task than previously expected.
The mill expansion to 1.3mtpa will proceed with some capital being allocated to move the next bottleneck to 1.5mt, in anticipation of reserves and production growth. The broker maintains an Underperform rating and $6.30 target predicated on a lower gold price deck.
Sector: Materials.
Target price is $6.30.Current Price is $11.30. Difference: ($5.00) – (brackets indicate current price is over target). If NST meets the Credit Suisse target it will return approximately -79% (excluding dividends, fees and charges – negative figures indicate an expected loss).
