I spent my spare time last weekend reviewing past Annual Reports of Northern Star, which are readily available on a search back to 2004. (www.nsrltd.com)
The NST picture started changing materially around 2010 with the discovery of some new gold ores at Paulsens (near Onslow).
Production had been chugging along in the 50,000 to 60,000 ounces per annum range.
The management, by necessity, had really focused on cost efficiency and prayed for organic growth by way of step out exploration around existing facilities.
An ambitious culture and professionalism was evident early through the commentary in the Chairman’s Reports.
The next 10 years then witnessed an amazing period of growth driven by numerous acquisitions on projects where they could value add by adopting the same proven strategy.
It makes sense that the best place to find more gold is nearby old locations where gold has been profitably recovered before.
Every 2 years, for the next 10 years, the NST stock price seemed to double. (70 cents to $14)
Production from 2010 progressively ramped up from 50,000 ounces to 600,000 ounces per annum.
If anyone else is interested, please start with the Chairman’s addresses from 2010 forward.
Paulsens was a project probably constrained by the location and exploration upside, so they rolled the dice on an acquisition.
Their mantra became to first understand the controls on the geology and then prudently explore around facilities.
Those basic disciplines that made NST the great success are clearly being adopted at OBM … I have no doubt about it.
OBM shareholders already have a vision and opportunity to participate in 2 exciting years of clearly defined organic growth and profitability, as Davyhurst production is initially ramped up to a rate of 100,000 ounces per annum, and then possibly 150,000 towards the end of calendar 2024.
NST has been such a wonderful success story, but it is now mostly for the institutions and leverage reduced by shear size.
Whereas, OBM’s real journey has probably only just begun.
OBM don’t need to go out and acquire projects, because it has an open ended, highly prospective package of contiguous leases covering a mineralised corridor this is dotted with historic workings and pits than run North/South for some 120 kilometres.
Luke was the senior underground mine manager for NST and he is clearly following their songbook here by targeting a much better understanding of these deposits with modelling and then the deeper drilling to test theory.
A building cashflow generated from the potential production of 150,000 plus ounces is going to fuel one hell of a lot of exploration drilling and fund organic growth.
Any share that could potentially double in value from here, every 2 years, will certainly work for me.
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