Northern Star going back to the drillbit
KALGOORLIE (miningweekly.com) – Gold miner Northern Star Resources will spend A$235-million on exploration over the next 12 months as the company’s focus moves to growing its resources and reserves.
Northern Star COO Simon Jessop told delegates at Diggers & Dealers that geology would be a focus to fund growth aspirations past its 2026 targets of two-million ounces of production.
Over the past 12 months, Northern Star has been adding ounces though exploration at a cost of A$31/oz.
“We are going back to the drill bit for future optionality,” Jessop said.
Beyond 2026, the next step is geology. That is the value driver for the business. We see continuity of production centres, we are growing the mineral resource and reserve base, and this is underpinned by the expansion of Kalgoorlie Consolidated Gold Mines (KCGM) that will give us a step change in our material cashflow generation.”
Northern Star in June approved a A$1.5-billion investment in the KCGM mill expansion project, which would increase the processing capacity from the current 13-million tonnes a year to 27-million tonnes a year, with the operation expected to reach steady-state production in 2029.
The expanded project would produce some 900 000 oz/y of gold at steady state, with the current mineral and ore reserves supporting a mine-life of more than 20 years, with all-in sustaining costs targeted at A$1 425/oz during steady-state production.
Based on a gold price of A$2 600/oz, the expanded project would have a post-tax internal rate of return of 19% and a pay-back period of 4.6 years.
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