Macquarie Research 10 Jan. In an impressively detailed analysis...

Macquarie Research 10 Jan. In an impressively detailed analysis of NST following the Plutonic acquisition, the conclusions are very upbeat, including that the actual replacement costs of P's infrastructure is c$250m, that it expects cash production costs to come down by $80 to $877/oz by Dec14, and at a production of 152koz for FY14 and 200koz for FY15 NST will achieve a CAGR of 32% over the next two years. Extracts:

"Outperform. NST remains one of our key picks in the ASX mid-cap gold sector. We forecast NST to produce over 200kozs in FY15 at an average AISC of $A1028/oz. The company is delivering solid cash flow from its Paulsen’s mine and we believe the company has made a disciplined, value and EPS accretive transaction by acquiring the Plutonic Mine for A$25m."

"...Whilst over the last two years the USD gold price has fallen 24% and the XGD gold index has declined by 67% NST has been able to outperform its ASX listed peer group by growing production from 60koz‘s in 2010 to now operating at a 100kozpa run rate in the last quarter of FY13. NST has delivered a 14.36% total return over the last two years, second only to BDR 20.61%......"

"We believe NST has the ability to be one of the lowest cost producers amongst it ASX listed peer group. NST currently sits in the second quartile on costs and we believe the company will be able to make further optimisations to decrease the cost of mining at Plutonic from the current A$1,200/oz level to A$1,185/oz by the end of FY14 and a further reduction in FY15 to A$1,121/oz."