Northern Star Resources lifts gold sales despite WA skills crisis

WA should bring its Covid-19 isolation rules into line with the east coast to minimise the impact of opening state borders, according to Northern Star boss Stuart Tonkin.

Northern Star Resources’ Pogo gold mine in Alaska.

The WA government needs to reduce the isolation period for positive Covid-19 cases to minimise the impact of next month’s border opening on the mining industry, according to Northern Star Resources boss Stuart Tonkin.

BHP and Rio Tinto both warned this week that they face potentially significant disruptions when WA drops interstate border travel restrictions on February 5, warning a surge in Covid-19 cases poses a short term risk to their operations.

Mr Tonkin said on Thursday that Northern Star, and the rest of the mining industry, is “well prepared” for a potential surge in Covid cases in WA when border restrictions end on February 5, the risk of absenteeism in the workforce as Covid-19 spread through the WA community remained a threat to the industry.

WA still requires a 14-day isolation period for people who test positive to the virus, and for their close contacts.

But Mr Tonkin told analysts he hoped a state government review of the rules would result in WA adopting similar rules to the east coast.

“The trepidation is probably more related to the regime of quarantine related to positive cases and close contacts – and that‘s been reviewed by the Minister and they will likely be modified and it could align with these on the east coast,” he said.

“If that remains 14 days… that becomes a problem as you get more cases. But we believe that will be reviewed and it’ll be a risk based approach.”

Northern Star reported its December quarter production results on Thursday, saying it had lifted gold sales in the December quarter despite ongoing impacts of the WA skill shortage,

Australia’s second biggest gold producer said its local operations performed in line with expectations in the December period, although its Pogo mine in Alaska lagged again.

Northern Star said it sold 392,655 ounces in the December quarter, up from 386,160 ounces in the previous quarter, at an all-in sustaining cost of $1631 an ounce – slightly up on September period costs of $1593 an ounce.

It booked gold production of 762,216 ounces in the first half of the year, but said it remained on track to meet annual guidance of 1.55 to 1.65 million ounces, with a lift in output expected in the second half of the year.

Mr Tonkin said the gold major believed it was in a position to minimise likely disruptions from the spread of Covid-19 when WA opens its borders on February 5.

“We remain on track to meet our FY22 guidance, which incorporates the current WA border closure and associated labour and cost impacts. Our experience at Pogo in Alaska has provided examples of the disruption we may face in WA and the mitigating actions required to reduce operational impact,” he said.

Northern Star shares jumped on the result and closed Thursday trading up 98c, or 11.2 per cent, to $9.73.

Barrenjoey analyst Daniel Morgan said in a client note that, although the result was largely in line with expectations, it had come in “better than market fears”.

Originally published as Northern Star Resources lifts gold sales despite WA skills crisis