Northern Star Resources shares climbed 6 per cent after beating analyst expectations for the December quarter
The market has been punishing gold companies which fall short of expectations, but Northern Star won the market’s plaudits for consistency on Wednesday.
Northern Star Resources shares closed up more than 6 per cent on Wednesday after the company said it was on track to meet annual production guidance following a solid quarter from its global gold operations.
The company said its gold mines produced 780,785 ounces in the first half of the year. It previously gave annual sales guidance of 1.6 to 1.75 million ounces of gold for the full financial year.
While Northern Star’s half-year output falls just short of the halfway mark of guidance, the company said it expected production to be weighted towards the second half of the year.
Northern Star’s mines produced 423,762 ounces in the December quarter, at an average all-in-sustaining cost of $1824, selling 411,613 ounces in the period at an average $2925 an ounce.
It has previously flagged average all-in-sustaining costs of $1730-$1790 an ounce for the full year.
The company said it finished December with net cash of $238m, with progress on its major expansion works at the Kalgoorlie Super Pit mine — where Northern Star is looking to more than double the size of its processing plant, to 27 million tonnes a year — on track and on budget.
RBC Capital Markets analysts said the quarterly report was slightly ahead of expectations, with a strong performance at the Super Pit. A stronger than expected effort from Northern Star’s long-troubled Pogo mine in Alaska, where processing rates hit a record, was also a positive sign, RBC said.
“We consider this result adds to NST’s market appeal as a consistent operator relative to gold peers,” RBC said in a client note on Wednesday.
Northern Star shares finished up 73c at $12.81.
