Ann: Trading Update , page-33

Tim Boreham - Criterion

Goldminer Northern Star still on track to shine

by: Criterion
From: The Australian
July 10, 2013 12:00AM

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CRITERION dips his lid to any goldminer that can produce record earnings in the current downturn, such as this WA producer, which produced the country's richest-ever assay (admittedly an outlier) of 12,178 grams a tonne from its Paulsens mine.

Even a sector leader in terms of grades and costs cannot escape the effects of gold's precipitous fall. Off the table is the Ashburton Gold Project, which was meant to have doubled the annual output of Northern Star (NST, 61.5c) to 200,000oz.

As with its bullion brethren, Northern Star's scythe has also whooshed silently but efficiently through head office costs.

Northern Star yesterday reported an "excellent" performance at Paulsens (near Paraburdoo), with June quarter output of 25,036oz sold at $1423/oz. This takes full-year output to 103,566oz.

Chief executive Bill Beament expects a record full-year profit of $27 million but bear in mind $22m was already chalked up in the first half.

Northern Star bought Paulsens from Intrepid Mines for $40m in July 2010, with the vendor preferring to focus on its Java project.

While the 550,000oz resource is rated as a five-year mine life, there's enough value there to maintain Northern Star as a spec buy.

Criterion had Northern Star as a bargain bullion buy at 80c in mid April and at 94c in August last year.

We maintain our faith in the dividend-paying entity's ability to ride the downturn, because sure as Faberge eggs many peers won't.

http://www.theaustralian.com.au/business/opinion/goldminer-northern-star-still-on-track-to-shine/story-e6frg9lo-1226676726844