ann: major resource%reserve upgrade paulson, page-34

from fosters

Northern Star Resources Ltd (NST, $0.99, Mkt Cap 422M) – Reserves upgrade extends Paulsen mine life. TRADING BUY $1.30/sh

Today’s Top Picks.

Northern Star Resources Ltd (NST, $0.99, Mkt Cap 422M) – Reserves upgrade extends Paulsen mine life. TRADING BUY $1.30/sh

•Yesterday NST announced an 81 per cent upgrade in reserves at its flagship Paulsen’s project and extended the mine life to more than five years. Paulsen reserves now stand at 204,000oz @ 5.3 g/t and we expect the reserves and mine life at Paulsen to continue to expand given the continuation of the mineralisation at depth and the exclusion of a series of high grade drill results, including hits of up to 1,135gpt at the Voyager 1 lode and 435gpt at the Voyager 2 lode
•The Paulsen’s upgrade follows last month’s announcement by Northern Star that Resources at its Ashburton Project in WA had grown by 66 per cent to 1.7Moz1. A maiden Sulphide Reserve for Ashburton is scheduled for the second half of this year. This will underpin Northern Star’s plan to develop a stand-alone 100,000ozpa operation there.
•CY13 production run rate is ahead of schedule with Paulsens on track for 100-115kozpa as the head grade increases resides at 8.5 g/t and total costs <$A850-950/oz delivering healthy cash margins to fund the continuation of dividends, exploration and development activity at Ashburton.
•Broker consensus NPAT estimates for FY13 and FY14 are $52M and $74M, putting the stock on a one year forward PE of 7.7x.
•With continued news flow expected on further resource extensions at the Voyager 1 Extension and Voyager 2 zones as well as exploration drilling at Gabbro offsets and Ashburton. We can see the stock trading out of the current range, providing a good trading opportunity.
•TRADING BUY PT $1.30/sh

http://www.fostock.com.au/announcements/northern-star-resources-ltd-nst-asx