Northern Star faces higher costs in June Q
PERTH (miningweekly.com) – Despite reporting record sales and production for 2013, gold miner Northern Star said on Monday that its all-in sustaining costs for the year had been affected by the weakening gold price.
Northern Star previously reported that production for the full year was up 44% to 103 566 oz, while sales for the year were up 50% to 92 795 oz, compared with the previous financial year.
Revenue for the full year was also up by 45%, to A$144.1-million.
Northern Star told shareholders that the company’s heavy emphasis on productivity enabled it to restrict all sustaining cash costs to A$1 016/oz for the full year, while costs for the three months to June reached A$1 098/oz, compared with the A$982/oz achieved in the previous corresponding period.
The miner told shareholders that part of the reason for the increase in costs during the June quarter was the impact of the lower gold price on the value of the ore stockpile, which generated an accounting adjustment of A$111/oz.
“Ironically, much of this stemmed from the company’s success in growing its ore stockpile, which was the result of the mining division significantly exceeding its budget,” the company said.
The contained ounces in the stockpile rose 15% from the March quarter.
During the period under review, the gold miner also incurred one-off costs, such as manning a second long-hole drill for the quarter, which resulted in a 140% increase in the production drill costs and expensing two major truck and grader rebuilds.
Processing costs were also high as recoveries ramped-up to normal, following the plant expansion.
For the current financial year, all-sustaining costs were expected to be around A$1 000/oz.
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