PERTH (miningweekly.com) – Gold major Northern Star Resources has reported a 35% increase in revenue and a 31% increase in underlying earnings before interest, taxes, depreciation and amortisation (Ebitda) following the first 12 months of operation since the merger with Saracen Resources.

Northern Star on Monday reported that it had delivered its 2022 production guidance of 1.56-million ounces of gold, at an all-in sustaining cost (AISC) of A$1 633/oz, generating revenues of A$3.7-billion, up from the A$2.7-billion in 2021 financial year.

Underlying Ebitda in the same period increased from A$1.1-billion to A$1.5-billion, while net profit after tax declined from A$1.03-billion to A$429.8-million, and Ebitda declined from A$2.26-billion to A$1.74-billion.

“These results, which include for the first time Saracen and 100% of the Super Pit, clearly demonstrate Northern Star’s cash earnings potential. Our strong performance in 2022 generated $1-billion in cash earnings, which underscores the sustainability of the cash flow from our high-quality assets located in tier-1 jurisdictions,” said MD Stuart Tonkin.

“We have made a solid start to FY23 and continue to progress the Kalgoorlie Consolidated Gold Mines (KCGM) cutback with our new cost-efficient mining equipment. The SKO processing plant is now on care and maintenance, at Thunderbox we commence commissioning the expanded mill in the first quarter, while at Pogo we have removed surplus equipment, reflecting increased development rates across the fleet.

“We are a stronger and more resilient business today than ever before, with a clearly defined multi-year strategy to deliver higher margin ounces. This strategy, backed by our experienced team and portfolio of high-quality assets, will enable Northern Star to create superior value for shareholders,” Tonkin said.

Looking ahead to 2023, Northern Star has set a production target of between 1.56-million and 1.68-million ounces of gold at an AISC of A$1 630/oz and A41 690/oz, with growth and capital expenditure set at A$650-million.

Meanwhile, Northern Star on Monday announced its first on-market share buy-back of up to A$300-million as part of its capital management strategy.

The buy-back aligns with Northern Star’s disciplined capital allocation priorities, which include returning cash to shareholders, investing in organic profitable growth and maintaining a strong balance sheet, and will not affect the company’s dividend policy.

“The announcement today of the first buy-back in Northern Star’s history presents compelling value and confirms the board’s confidence in our strong balance sheet and cash generation outlook and aligns with our fiscal discipline and returns focus,” Tonkin told shareholders.

“We believe an on-market buy-back is an effective method of returning surplus capital to shareholders while also being immediately earnings and value accretive.

“The launch of the buy-back reflects the maturing of Northern Star as a company as we balance reinvestment in the business with cash returns to shareholders. Our clearly defined, multi-year organic growth strategy to deliver higher-margin ounces remains on track, with the past year laying the foundation for enhanced strong cash generation.”