Northern Star Resources Ltd

Published : January 28th, 2016

Quarterly Activities Report – December 2015

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Keywords :   Debt | Georgia | Gold | Growth | Market | Mines | Recovery |

Quarterly Activities Report – December 2015

f8354e5d-0938-4932-90d2-4ab0c3e7671b.pdf


December 2015 Quarterly Activities Report

STRONG OPERATIONAL AND FINANCIAL PERFORMANCE AS NORTHERN STAR PREPARES FOR NEXT CHAPTER OF GROWTH


KEY POINTS


ASX ANNOUNCEMENT

28 January 2016

Australian Securities Exchange Code: NST


Board of Directors

Mr Chris Rowe

Non-Executive Chairman


Mr Bill Beament

Managing Director


Mr Peter O'Connor

Non-Executive Director


Mr John Fitzgerald

Non-Executive Director


Ms Liza Carpene

Company Secretary


Issued Capital

Shares 600 million

Options 4.3 million

Current Share Price A$3.23 Market Capitalisation

$1.94 billion


Cash, Bullion & Investments 31 Dec 2015 - A$226 million

Outstanding December Quarter with production at the top end and costs below the bottom end of guidance respectively

Production totalled 145,251oz at an all-in sustaining cost (AISC) of A$1,040/oz (FY16 guidance is 535,000-570,000oz at AISC of A$1,050- A$1,100/oz)

Cash, bullion and investments rose by A$30m in the December Quarter to A$226m after paying out A$18m in dividends and A$23.5m on organic growth and development; Northern Star remains debt-free

Production for six months to 31 December totalled 285,494oz at an AISC of A$1,062/oz

Strong Progress made on strategy to grow production to 700,000ozpa in FY18 from organic sources

Organic growth strategy reflects Northern Star's ongoing commitment to maximising financial returns for its Shareholders, including an industry- leading return on equity

Turnaround at Plutonic continues with AISC down 11% from September Quarter and positive scoping study results from the Hermes Project

December Quarter production:

  • Jundee Gold Operations:

    • 60,273oz mined and 53,760oz sold at an AISC A$986/oz

  • Kundana Gold Operations:

    • 29,271oz mined and 27,034oz sold at an AISC A$898/oz

  • Kanowna Belle Gold Operations:

    • 27,028oz mined and 25,153oz sold at an AISC A$811/oz

  • Paulsens Gold Operations:

    • 20,730oz mined and 19,161oz sold at an AISC A$1,156/oz

  • Plutonic Gold Operations:

    • 21,315oz mined and 16,910oz sold at an AISC A$1,645/oz

Northern Star will host a quarterly conference call today at 8.30am AWST (11.30am AEDT), Thursday, 28 January. The call can be accessed at http://boardroom.media/broadcast/?refid=&eid=56a56ef42ac671c40a8c7007


Northern Star Resources Managing Director Bill Beament said:

"Northern Star enjoyed an outstanding quarter in every respect. The A$30 million increase in cash, bullion and investments to A$226 million, which came despite paying the full year dividend and investing in our growth program, reflects the fact that our operational success translates to financial success.

Projects

Paulsens Mine Plutonic Mine Kanowna Belle Mine

Kundana Mines (51% of EKJV) Jundee Mine

Ashburton

Central Tanami (25% of JV)

Listed Investments

VXR, DAU, RND, TBR, ALY

"We sold 142,017oz in the quarter at an average realised price of A$1,484/oz, again highlighting the robust margins and strong cash flow our assets generate. And we are selling gold for A$100/oz more in the current March quarter.

"We are now fully committed to the detailed planning which underpins our strategy to grow production to 700,000ozpa by FY18. This growth will all come from organic sources, further increasing our free cash flow and, importantly, enabling us to maintain our reputation for having one of the highest rates of return on capital on the ASX."


Page 1 of 13


Northern Star

Units

Mar-15 Qtr

Jun-15 Qtr

Sept-15 Qtr

Dec-15 Qtr

YTD

Ore Hoisted

Tonnes

824,328

901,515

821,070

886,185

1,707,254

Mined Grade

gpt Au

5.3

5.6

5.7

5.6

5.6

Gold in Ore Hoisted

Oz

140,051

161,808

150,402

158,617

309,018

Milled Tonnes

Tonnes

883,969

959,999

911,818

970,999

1,882,817

Head Grade

gpt Au

5.1

5.5

5.3

5.1

5.2

Ounces Produced

Oz

144,044

168,767

154,445

159,133

313,578

Recovery

%

91

91

91

91

91

Gold Recovered

Oz

131,169

153,360

140,242

145,251

285,493

Ounces Sold

Oz

135,498

152,446

141,556

142,017

283,573

Average Gold Price

A$/oz

1,500

1,497

1,509

1,484

1,497

Revenue

A$M

203.3

228.3

213.6

210.8

424.4

Cash Operating Cost

A$/oz

876

900

836

837

836

All in Sustaining Cost

A$/oz

1,172

983

1,083

1,040

1,062

Total Stockpiles Contained Gold

Oz

80,124

73,339

70,061

70,453

70,453

Gold in Circuit (GIC)

Oz

18,333

19,016

17,505

20,816

20,816

Gold in Transit (GIT)

Oz

-

-

-

-

-

Table 1: Key Group Performance Figures (Quarterly)


Northern Star

Units

Mar-15 Qtr

Jun-15 Qtr

Sept-15 Qtr

Dec-15 Qtr

YTD

Mining

$/oz

546

510

551

561

556

Processing

$/oz

195

180

189

188

189

Site Services

$/oz

57

55

67

62

65

Ore Stock & GIC Movements

$/oz

43

120

(3)

(9)

(6)

Royalties

$/oz

38

38

35

40

37

By Product Credits

$/oz

(3)

(3)

(3)

(4)

(4)

Rehabilitation-Accretion & Amortisation

$/oz

50

(149)

8

2

5

Corporate Overheads

$/oz

23

27

44

35

40

Mine Development/Sustaining CAPEX

$/oz

184

179

177

147

162

Mine Exploration

$/oz

39

26

18

19

19

All in Sustaining Costs

$/oz

1,172

983

1,083

1,040

1,062

Depreciation & Amortisation

$/oz

176

601

276

300

288

Table 2: Key Group Cost per Ounce Measures


Production KPIs Dec Quarter

Units

Paulsens

Plutonic

Kanowna Belle

Kundana

Jundee

Total

Total Ore Hoisted

Tonnes

92,772

173,450

207,061

114,213

298,689

886,185

Mine Grade

gpt Au

7.0

3.8

4.1

8.0

6.3

5.6

Gold in Ore Hoisted

Oz

20,730

21,315

27,028

29,271

60,273

158,617

Milled Tonnes

Tonnes

95,953

198,959

196,489

120,415

359,183

970,999

Head Grade

gpt Au

7.3

3.5

3.8

7.3

5.4

5.1

Recovery

%

90

78

94

96

93

91

Gold Recovered

Oz

20,152

17,248

22,572

27,034

58,246

145,251

Gold Sold

Oz

19,161

16,910

25,153

27,034

53,760

142,017

Cash Operating Costs

A$/oz

795

1,531

753

655

764

837

All In Sustaining Costs

A$/oz

1,156

1,645

811

898

986

1,040

Depreciation & Amortisation

A$/oz

390

257

206

233

361

300

Table 3: Key Quarterly Mine Production Performance

FINANCE

The following is a table of the cash, bullion and investments held at the end of each quarter:


Units

Mar-15 Qtr

Jun-15 Qtr

Sep-15 Qtr

Dec-15 Qtr

Cash at bank

A$M

$77.4

$167.5

$163.4

$210.9

Bullion awaiting settlement(1)

A$M

$29.1

$2.7

$26.1

$9.1

Investments

A$M

$5.2

$7.5

$6.5

$5.5

Total

A$M

$111.7

$177.7

$196.0

$225.5

Table 4: Cash, Bullion and ASX equity investments

(1) Bullion awaiting settlement is dore which has been received by the refiner in the quarter and is awaiting settlement.


The below table sets out the total of surface gold inventories:


Gold Inventories

Mar-15 Qtr

Jun-15 Qtr

Sep-15 Qtr

Dec-15 Qtr

Stockpiles contained gold (oz)

80,124

73,339

70,061

70,453

Gold In circuit (oz)

18,333

19,016

17,505

20,816

Gold In transit (oz)

-

-

-

-

Total Gold Inventories (oz)

98,456

92,355

87,566

91,269

Table 5: Gold Inventories

The below waterfall chart highlights the December Quarter's operating cash flow together with movements in cash, bullion and investments:



The below waterfall chart highlights the underlying free cash flow for the December Quarter:



The below waterfall chart provides an overview of year to date underlying free cash flow:



Banking Facilities

During the quarter the Company's Revolving Loan Facility (RLF) limit of A$100M has been reduced to A$90M per the amortisation schedule. The RLF is undrawn with the limit available for draw down.

Hedging

The below table outlines the Company's current hedging position:


Term

Mar -16 Qtr

Jun -16 Qtr

Sep -16 Qtr

Dec - 16 Qtr

Total

Ounces

39,000

39,000

19,500

19,500

117,000

Gold Price

A$1,615

A$1,618

A$1,638

A$1,640

A$1,624

Table 6: Hedging commitments

During the quarter 72,000oz of hedging was added for delivery across CY16 at an average of A$1,642/oz.

OPERATIONS

Paulsens Gold Operations


Production Summary

Mar-15 Qtr

Jun-15 Qtr

Sep-15 Qtr

Dec-15 Qtr

YTD

Paulsens

Ore Mined

Tonnes

94,124

115,723

105,832

92,772

198,604

Mined Grade

gpt Au

5.2

5.9

7.9

7.0

7.5

Ounces Mined

Oz

15,671

21,918

26,892

20,730

47,622

Milled Tonnes

Tonnes

124,003

110,551

101,311

95,953

197,264

Head Grade

gpt Au

5.1

6.1

7.8

7.3

7.5

Recovery

%

90

89

92

90

91

Gold Recovered

Oz

18,177

19,260

23,259

20,152

43,411

Gold Sold

Oz

18,868

19,848

22,736

19,161

41,897

Cost per Ounce

Mining

A$/oz

444

431

377

447

409

Processing

A$/oz

244

274

189

245

215

Site Services

A$/oz

55

74

62

74

67

Ore Stock Movements

A$/oz

226

36

(23)

(6)

(15)

Royalties

A$/oz

39

37

36

38

37

By Product Credits

A$/oz

(2)

(3)

(2)

(2)

(2)

Cash Operating Costs

A$/oz

1,005

849

639

795

710

Rehabilitation - Accretion & Amortisation

A$/oz

3

10

6

5

5

Corporate Overheads

A$/oz

23

28

45

35

41

Mine Development / Sustaining CAPEX

A$/oz

199

236

292

315

303

Paulsens Mine Exploration

A$/oz

44

42

25

5

15

All in Sustaining Costs

A$/oz

1,275

1,165

1,007

1,156

1,075

Depreciation & Amortisation

A$/oz

341

340

360

390

374

Table 7: Summary Details - Paulsens


Plutonic Gold Operations


Production Summary

Mar-15 Qtr

Jun-15 Qtr

Sep-15 Qtr

Dec-15 Qtr

YTD

Plutonic

Ore Mined

Tonnes

190,537

200,549

159,172

173,450

332,622

Mined Grade

gpt Au

3.7

3.7

4.0

3.8

3.9

Ounces Mined

Oz

22,757

24,068

20,651

21,315

41,966

Milled Tonnes

Tonnes

192,054

214,359

175,640

198,959

374,598

Head Grade

gpt Au

3.6

3.6

3.7

3.5

3.6

Recovery

%

83

79

77

78

78

Gold Recovered

Oz

18,712

19,570

16,147

17,248

33,395

Gold Sold

Oz

19,675

19,287

16,365

16,910

33,275

Cost per Ounce

Mining

A$/oz

966

1,052

1,274

1,107

1,189

Processing

A$/oz

266

308

270

309

290

Site Services

A$/oz

89

95

113

87

100

Ore Stock Movements

A$/oz

26

20

5

(9)

(2)

Royalties

A$/oz

39

38

31

40

36

By Product Credits

A$/oz

(2)

(2)

(2)

(3)

(3)

Cash Operating Costs

A$/oz

1,383

1,511

1,691

1,531

1,609

Rehabilitation - Accretion & Amortisation

A$/oz

99

(449)

14

(6)

4

Corporate Overheads

A$/oz

24

27

46

35

41

Mine Development / Sustaining CAPEX

A$/oz

209

20

81

85

83

Plutonic Mine Exploration

A$/oz

68

51

-

-

-

All in Sustaining Costs

A$/oz

1,784

1,160

1,832

1,645

1,737

Depreciation & Amortisation

A$/oz

135

1,155

330

257

293

Table 8: Summary Details - Plutonic

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Data and Statistics for these countries : Georgia | All
Gold and Silver Prices for these countries : Georgia | All

Northern Star Resources Ltd

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CODE : NS7.BE
ISIN : AU000000NST8
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Northern Star Res. is a producing gold company based in Australia.

Northern Star Res. holds various exploration projects in Australia.

Its main asset in production is PAULSENS GOLD MINE in Australia and its main exploration properties are EAST KIMBERLEY, WILSON RIVER GROUP and HALLS CREEK in Australia.

Northern Star Res. is listed in Australia and in Germany. Its market capitalisation is €UR 3.4 billions as of today (US$ 3.7 billions, € 3.4 billions).

Its stock quote reached its lowest recent point on July 09, 2010 at €UR 0.02, and its highest recent level on July 26, 2019 at €UR 8.70.

Northern Star Res. has 600 539 968 shares outstanding.

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BERLIN (NS7.BE)AUSTRALIA (NST.AX)
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