PILBARA gold miner Northern Star Resources reported a $20 million profit in its maiden year while disclosing plans to more than double production to 200,000 ounces per year.
Northern Star managing director Bill Beament said in a statement that the profits were due primarily to increased production at the company’s flagship mine, Paulsens.
The profits come after deducting the $40 million expenditure for the Paulsens acquisition and another $10 million to increase mine life.
“Northern Star has extended significantly the known depth of the key Voyager 1 lode, which has supplied all the ore mined to date at Paulsens, and discovered the Voyager 2 lode,” Mr Beament said.
These developments underpin the upgrades planned for the New Year, which provide potential for another five years of mine life at Paulsens.
“Northern Star is on track to beat its forecasts of 75,000 ounces in production and surplus cash flow of $40 million for calendar 2011,” Mr Beament said.
On the back of these record profits, the company announced a two-stage expansion program to redevelop its newly-acquired Ashburton project.
The first stage involves the recovery of free-milling ore from Ashburton, which will be trucked to the Paulsens plant to supplement plant feed; playing an important role in boosting the company’s annual gold output to 100,000oz.
The second stage, set to raise production to 200,000oz per annum, will involve a standalone sulfide ore processing circuit to be known as the Ashburton sulphide project.
The strategy to increase production received a strong boost with a series of high-grade intersections at Ashburton. The results come from drilling at the Mt Olympus and Peake deposits, and include highlights of 4 metres at 9.6 grams per tonne, 8m at 6gpt and 4m at 9.8gpt. “The results highlight the significant contribution Ashburton stands to make to Northern Star’s rapid growth outlook and reinforce the excellent outlook for the company based on rising production and cash flow,” Mr Beament said.
He said that the successful execution of this growth plan to 200,000ozpa would elevate Northern Star beyond the crowded ranks of the 100,000ozpa to 150,000ozpa ASX-listed gold producers.
By Reuben Adams