fire haults operations at paulsens

3/10/2010

Mining at Northern Star Resources' Paulsens gold mine has been disrupted by a fire.

The extent of the damage at Paulsens, about 1000km north of Perth, is not clear but mining has stopped after the incident on Monday night.

No one was injured.

It is understood the company was fully insured and does not expect to record a financial loss from the fire, although it will mean a temporary disruption to mining.

Northern Star is expected to provide an update to the market this morning, having put its shares into a trading halt yesterday, pending a "mine update".

Investors will be hoping for reassurance the incident will not seriously dent the miner's plans to produce 65,000 ounces under its stage-one mine plan, which will run until early 2011. Plans for stage two are under way.

Northern Star acquired Paulsens from Intrepid Mines in August for $40 million. Since then it has been working to increase the size of its resource and extend the mine life. Its shares are up 147 per cent in two months on the back of a series of encouraging drilling results - including a recent intersection of two metres at 40.5 grams per tonne.

Having last changed hands at 21.5?, they may come under pressure today.

Northern Star poured a record 30,600ozs in the September quarter, pulling in $40.5 million in revenue on cash costs of $386/oz. A production update for last month, due out in the next week, is expected to confirm another bumper month.

The group had $9.25 million in cash, as at September 30.


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