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:
-
Kundana Gold Operations:
-
Kanowna Belle Gold Operations:
-
Paulsens Gold Operations:
-
Plutonic Gold Operations:
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