By Courtney Pearson
August 13, 2015
THE story has been all positive for Northern Star Resources which became one of Australia’s top three gold producers in 2014 and has enjoyed climbing production and sales results ever since.
Northern Star Resources ended the 2015 financial year with $178 million in cash, bullion and investments; nearly double the previous year’s $96 million result. The company also retired the last of its bank debt.
Record gold sales in the June quarter led to a final financial year result of 580,784oz, which was within its full year guidance of between 550,000oz and 600,000oz.
“These results mark the end of our first chapter as a company and it’s certainly not the end of the story,” Northern Star managing director Bill Beament said.
“We now have a business with critical mass in terms of production and we have asset diversity.”
The company acquired four of its five WA mines – Paulsens, Plutonic, Kanowna Belle, Kundana and Jundee – within a year and a half. Yet Northern Star maintains a strong exploration focus, with about 10,000 square kilometres of land in prospective areas of WA.
Exploration campaigns have, so far, produced “outstanding results” with a string of discoveries, including results at the company’s Kalgoorlie operations such as Kundana and Kanowna Belle.
“This [exploration] program is now the key theme of our next chapter which is about growing the pipeline feed from our four processing centres,” Mr Beamont said.
Made in WA
Originally mined in the 1930s as the Melrose mine, the Paulsens deposit was purchased by Northern Star as part of a 365sqkm tenement package in 2010.
By the end of the 2015 financial year, Northern Star had sold 77,642oz of gold from the Paulsens.
During the June quarter the company continued mine development, which included operating development of the ore drives at the high grade Voyager 2 lode, and the Gemini and Paulsens lodes.
“This resulted in a 20 per cent increase in mill grade from the previous quarter,” the company said.
In line with its exploration strategy, Northern Star Resources completed a diamond drilling program at the Belvedere project. The drilling tested exploration targets and generated core sample for the potential development of the Belvedere open pit mine.
The Belvedere project, 7km south-east of the Paulsens gold mine, is the company’s most advanced gold target in the tenement package. A number of high grade gold drill intercepts were recorded, including 5m at 8.84 grams per tonne of gold from 12m.
Northern Star Resources is also involved with the Hardey Junction and Mt Clement joint ventures, which are 9km and 30km from the Paulsens mine respectively.
The Plutonic underground mine is 180km north-east of Meekatharra and 1100km north-northeast of Perth.
In operation for more than 25 years, Plutonic produces gold at a rate of about 110,000oz to 115,000oz per annum. In the 2015 financial year, 80,141oz of gold was sold from Plutonic.
Five underground drilling rigs continue to drill with a focus on the Caribbean and Pacific East mining areas. About 6200m of surface diamond drilling has been completed at the Bigfish, Zone 114 and Plutonic West target areas.
The area surrounding Northern Star Resources’ Kanowna Belle mine has a rich history, with exploration in the Kanowna region beginning in 1895. Kanowna Belle is 18km north-east of Kalgoorlie-Boulder and was discovered in 1989. Open pit mining began in 1993, then underground operations in 1998. The company acquired the operation in March last year.
By the end of the financial year, Northern Star Resources had sold 96,223oz of gold from the operation.
During the June quarter the company exploration focused on the Velvet target, which is 600m west of the Lowed underground orebody. Previous results recorded an intersectionof 45.3m at 5.6g/t.
Exploration to “test the target from a more favourable position” is expected to start late next quarter.
Furthermore, there were two intersections at the SIMS upper project, between the SIMS deposit and the West Troy high grade lode, as well as continued exploration at the Six Mile prospect which returned “encouraging results”.
Modern underground mining began at the Kundana South, Kundana North and Strzelecki pits in 1988. Raleigh was discovered that same year.
The Rubicon project is 2km south-east of Raleigh and includes the Hornet, Rubicon and Pegasus deposits. Ore from Kundana is processed at Kanowna Belle.
The Kundana operations had a profitable 2015, which included103,051oz of gold sales.
The company continued its exploration at the Kundana operations, with drilling at Pegasus returning good results, including 3m at 11.3g/t.
Adjacent to Pegasus Northern Star recorded further additions to the Pode ore body with “some sensational hits” that were “very consistent with the existing ore bodies”, according to chief operating officer Stuart Tonkin.
Drilling at Raleigh uncovered significant intersections, including 0.2m at 326g/t and 1.5m at 27.5g/t, while “significant results” were returned between the Skinners Vein and the main Raleigh structure, including 30.1m at 14g/t, 8.2m at 8.1g/t and 0.9m at 34.7g/t.
Meanwhile, drilling confirmed the continuation and depth extensions of the Hornet deposit as well as mineralisation in the hangingwall. At Rubicon, drilling revealed a northerly plunge shoot with results including 5.8m at 9.2g/t and 5.7m at 10.6g/t.
Northern Star has a 51 per cent interest in Kundana in a joint venture with Rand and Tribune (49 per cent).
The largest of Northern Star’s five mines, Jundee was
acquired by the miner last year.
Jundee is in the Northern Goldfields region of WA about 45km north-east of Wiluna and about 520km north of Kalgoorlie-Boulder.
The operation saw a huge amount of exploration activity in the June quarter, which included 36,306m of underground diamond drilling from seven rigs.
Outside of the normal mine schedule the company focused on a number of targets, with “drill plans and development on newly identified targets progressing as planned”, the company stated.
Extensional drilling programs for deeper extensions of the Westside and Gateway systems in the Jundee dolerite package were completed, while an extensional drilling program for strike extensions of Westside and Gateway into the Stirling area to the south was expected to be completed in the September quarter.
Northern Star was also testing the Gringotts ore body, with the completion of an additional drill drive in Gateway.
“A new resource update for Gateway has been completed – resulting in two additional drill drives and further drilling being scheduled to commence in the September quarter 2015,” the company said in its June quarterly report.
Drilling at Moneyline, Midas and Nexus was completed with “some good results in Moneyline”, Northern Star stated.
The board approved the development of an extensive deep drill drive to allow testing of possible down-dip extensions below current and historic underground operations, which has begun, while surface exploration activities continue.
More than 35,000 rotary air blast/aircore drilling was completed, with follow up drilling planned for the next quarter.
Northern Star has a very clear outlook.
“I think it’s clear that Northern Star is an outstanding business, both from an operational and financial perspective,” Mr Beamont said.
“The challenge is to keep it that way.”
The company’s exploration drive was the key to achieving future success.
“The results we are generating from that are already outstanding and I’m very confident that we’ll achieve increases in mineral inventories that will underwrite the future of our business,” Mr Beamont said.
The company has had an extremely productive year, constantly looking for discoveries to add to its portfolio. One discovery is Carbine, about 60km from Kalgoorlie, which indicated open pit and underground potential from its significant results.
Mr Beamont said it was discoveries like these which put the company in good stead for the future.
“Regardless of whether you think the gold price is going up, down, sideways, we believe we are ideally positioned in every respect,” he said.