PERTH (miningweekly.com) – Gold miner Saracen Mineral Holdings and Northern Star Resources have both reported record profits for the half-year ended December, as the merger between the gold miners becomes effective.

Saracen on Wednesday reported record underlying net profits after tax of A$148-million for the six months to December, an 85% increase on the previous corresponding period, while statutory net profits after tax increased by 74%, to A$120.5-million.

Earnings before interest, taxes, depreciation and amortization (Ebitda) were up 44% on the previous corresponding period, to A$257.3-million.

The miner reported that revenue for the half-year was up by 47%, to A$601.7-million, on the back of a 43% increase in gold production, which hit a record 309 512 oz during the six months under review.

Gold sales for the period reached 255 938 oz at an average realised gold price of A$2 343/oz.

“These results show Saracen’s assets are top shelf, generating outstanding cashflow from strong margins and underpinned by long mine lives,” said MD Raleigh Finlayson.

“By combining our operations with those of Northern Star, we are creating a world-scale gold miner which meets the key investment criteria of abundant free cash flow and growing production and reserves exclusively from their tier one assets.

“In the process, we will unlock substantial synergies, efficiencies and exploration upside which will drive organic growth.”

Meanwhile, Northern Star has also reported record underlying net profits after tax for the half-year of A$194.4-million, up 63% on the previous corresponding period, while statutory net profits after tax also reached a record A$184.5-million, up 46% on the previous corresponding period.

Ebitda for the six months under review also reached a record A$472.2-million, up 47% on the previous corresponding period.

Northern Star has reported revenues of A$1.1-billion for the interim period, an increase of 34%, from the sale of 480 431 oz of gold at an average realised price of A$2 386/oz.

Executive chairperson Bill Beament said on Wednesday that the record performance showed the company’s growth strategy was proceeding to plan.

“Our strategy is aimed at ensuring Northern Star generates strong growth at all levels while maintaining its industry-leading financial returns.

“The record Ebitda of A$472-million demonstrates that our growth plan is delivering superior results. This result came despite investing A$108-million in exploration and expansionary capital and directing 39% of our gold sales into hedges, which meant revenue was over A$100-million lower than at spot prices.

“We are also generating significant growth in our business while maintaining superior returns, as shown by the annualised average return on equity of 17.4%.”

Beament said that the enlarged Northern Star group was primed for more growth at all levels, and to further increase returns for shareholders.

“After the Saracen merger is implemented on February 12, our combined operations have a clear pathway to an annual production rate of two-million ounces. This growth will be driven by organic sources and incur one of the lowest capital intensities in the industry, ensuring that it is not just strong growth but also financially rewarding growth.”