Coronavirus restrictions hit Northern Star production
Northern Star Resources says production at its Australian mines dipped sharply in the March quarter as the company adjusted its underground operations to new coronavirus restrictions.
Northern Star Resources says production at its Australian mines dipped sharply in the March quarter as the company adjusted its underground operations to new coronavirus restrictions.
The company sold 130,054 ounces of gold from its Australian operations in the period, excluding the Kalgoorlie Super Pit, 39,530 fewer ounces than in the December period.
It took control of half of the Super Pit on January 1, and sold an additional 60,204oz from that operation. Its Pogo mine in Alaska continued its improved performance, selling 48,773oz in the period, up from 45,051oz in the December quarter.
Northern Star blamed the shortfall on restrictions imposed to limit the spread of coronavirus in WA, saying it had taken time to adjust its underground operations to the new regime.
“These mines rely on specialised skills and the roster changes, including longer and even-time rosters, require additional skilled personnel, who are in short supply,” Northern Star said on Tuesday.
“Towards the end of the quarter, the mining crew alone lost more than 1500 shifts, with unplanned leave up 80 per cent due to the strict health and safety operating protocols.”
The company said its Jundee mine had suffered from a 10-day processing shutdown in the quarter for maintenance and upgrades, and time was also lost at its Raleigh mine near Kalgoorlie over seismic issues early in the year.
Northern Star shares dipped sharply in late March when the company downgraded guidance for the March quarter by 10 to 15 per cent, blaming the impact of the coronavirus on its operations, deferred payment of its 7.5c interim dividend and said it was seeking to delay delivery of gold due to be delivered into hedging positions this financial year.
Northern Star shares fell from $13.50 on March 25, before the announcement was made, to $10.18 in early April before recovering as the gold price climbed.
The company’s mines produced 241,007 ounces of gold in the December period, and sold 214,635oz at an all-in sustaining cost (AISC) of $1421/oz, before Northern Star took possession of half of the Kalgoorlie Super Pit from Newmont Corporation.
In the first half of the financial year Northern Star produced 460,869oz and sold 398,640oz at an AISC of $1454/oz.
Before the March downgrade It had given full year production guidance of 920,000 – 1,040,000oz at an all-in sustaining cost (AISC) of A$1,240-A$1,340/oz, including gold produced from the Super Pit.
On March 25 Northern Star had total debt of $700 million, including a $400 million four-year term loan and a three-year $300 million revolving credit facility. Cash on hand and bullion awaiting settlement stood at $534 million, the company said.
Northern Star shares last traded at $13.58.