NORTHERN STAR RESOURCES LTD (ASX:NST) - Ann: Quarterly Activities Report - March 2015, page-30 - HotCopper | ASX Share Prices, Stock Market & Share Trading Forum

Originally posted by mainholm ↑

One has to mine to find gold. The qtr report is full of golden info, but needs some analytical mining to find it. Plus listening to the NST conference call helps identify the lode bearing information. Here is some golden info I have gleaned from reading and listening today.

1. Annualised ROE is 33.4%.
2. Annualised ROA is 18.5%.
3. Debt free as at 13 Apr 15.
4. Exploration spend to date is only $16m from budget of $50m. BB stated; "exploration kicking goals".
5. Results to date indicate discovery cost of only $30 oz. That is excellent on a $400/500 profit margin/oz.
6. 26/27 drill rigs operating and overall costs have dropped by 25% below budget forecast.
7. Paulsens looks like getting significant increase in LOM with mineralisation discovered up to 300m down plunge from Voyager 2.
8. The COO stated an overall LOM update is coming end of FY.
9. The COO stated that last qtr had a reduced overall output of about 5k oz due to weather and a maintenance issue. 2k oz reduction at Jundee due to a weather event and 3k oz reduction at Kanowna due to plant maint issue. Current stockpile is 80k oz overall.
10. BB stated that Plutonic AISC cost high due to the "mine plan" and subsequesnt development "basically building a new mine". He said that was part of the plan when acquiring Plutonic and they have identified 3 or 4 new ore bodies. There are 4 Jumbos in use at present.
11. Over the last 9 months there has been 7109m of mine development completed at Plutonic and the AISC also contains a very high non cash amount of $99 for mine rehab provision.
12. BB and the COO both expressed the opinion that the Hermes acquisition from ALY will commence feeding the Plutonic plant in about 12 months time and should help improve the profit margin as well.
13. BB also noted that the Kundana project had a heavy development ore feed last quarter that temporarily kept the overall grade low. This will improve as more stoping ore is mined this quarter.
14. The CFO stated that the underlying FCF was $24m. He referred to the "waterfall chart" on page 4 of the qtr report to note some important cashflow points. He noted that NST paid an accelerated tax expense of $17m last qtr and this current qtr the tax expense is expected to be about $4m. He also noted that there were one off final M&A costs plus a stamp duty cost of $6m embedded in operating costs. He also noted that the P&PE cost of $32m incl mine dev costs and not just plant and equipment investment.
15. BB stated that the Coal Resource was "for sale" and presently there is no strategy and low priority.
16. BB stated that there might be an exploration update for the Kalgoorlie projects released before end FY.
17. Jundee has 5 Jumbos in operation and over the last 9 months there has been over 10km of mine development. He said there is still plenty of high grade ore around Jundee.
18. BB made broad comment on the NST Acquisition Plan: Opportunity ready, no rush, strict criteria, asset purchases preferred.
19. Planning info on TAM JV will be released after deal is done and all clearances obtained.
20. Most exciting of all was the statement by BB that NST is strategically planning to be a 1m oz producer.

So, plenty of good info to reassure that NST is travelling well on the path to grow and reward shareholders. BB speaks with confidence and clarity. He seems to be doing an outstanding job and looks like he is supported by a great team. My bets are on them establishing a multi billion dollar company sooner than later. It might be short sighted to worry about the Plutonic AISC at the moment. That acquisition seems to be a good part of the overall strategic plan. As BB stated, they are "building a new mine" at Plutonic.

Cheers

Expand

Great summary thanks Mainholm, appreciate the speed at which you posted.

Great to hear BB state "stunning return on invested capital" referring to the $30 per oz discovery cost of drilling and a 25% reduction in drilling rates so the $50m budget likely to cost only $38m.

The biggest disappointment was the EKJV. A big 10,281oz (35%) drop in production from 29,566oz to 19,285oz alongwith a drop in grade and recovery. Very well offset by Kanowna Belle and other operations - not good for the JV partners who don't have that luxury.

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(20min delay)
Last $15.16		Change 0.260(1.74%)		Mkt cap ! $17.42B

Open	High	Low	Value	Volume
$15.05	$15.38	$15.05	$77.42M	5.098M

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