PERTH (miningweekly.com) – Gold miner Northern Star Resources has reported a 53% increase in its underlying net profits after tax for the half-year ended December, on the back of higher gold prices.   

Underlying net profits for the interim period were reported at A$139.4-million, while statutory net profits were up by 54%, to A$126.8-million, and earnings before interest, taxes, depreciation and amortization (Ebitda) increased by 45%, to A$322.3-million.

Revenue for the six months under review was up by 31%, to A$827-million, compared with the previous corresponding period, with 398 640 oz of gold sold at an average price of A$2 046/oz.

Gold sales for the previous corresponding period reached 423 243 oz; however, gold prices were lower at A$1 700/oz.

Northern Star executive chairperson Bill Beament on Tuesday said that the results demonstrated the company’s financial strength, which was underpinned by the substantial cash flow now being generated by its four tier-1 assets.

“The fact that our Ebitda rose 45% to A$322-million speaks volumes about both the strength and quality of our business. The combination of these earnings, cashflow and overall returns is the result of our highly disciplined approach to capital investment, whether it be through exploration, development or acquisition.

“This reflects our long-standing mantra that we are a business first and a mining company second.”

The interim results did not include Northern Star’s stake in the Super Pit mine, in Kalgoorlie.

The miner acquired a 50% stake in Kalgoorlie Consolidated Gold Mines (KCGM), which holds the Super Pit mine, through an $800-million deal with gold miner Newmont Goldcorp, forming a joint venture with fellow-listed Saracen Mineral Holdings at the Super Pit.

“We are looking forward to reaping the benefits of the KCGM acquisition, which we believe will drive more substantial growth in our net cashflow while maintaining strong overall financial returns,” said Beament on Tuesday.

“We are delighted with the outlook for KCGM and we are making rapid progress on the review in partnership with Saracen. This is one of the best gold systems in the world and between us, we have some of the best openpit and underground mining specialists in the world assessing the operation and its potential.

“We also expect that our financial performance in the current half will reflect the ongoing progress at Pogo, where production is forecast to rise from 75 000 oz in the first half to meet our second half guidance of 120 000 oz to 140 000 oz. The increased production at Pogo is expected to see all-in sustaining costs continue to fall, further strengthening free cash flow.”

For the second half of 2020, Northern Star has set a group production guidance of between 520 000 oz and 640 000 oz.