Shares for Northern Star Resources Surge after Production Report

Northern Star Resources, the second biggest ASX-listed gold producer, has seen a rise in more than nine percent after the company announced its better-than-expected second quarter production results. The company beat its June-quarter production guidance by nearly 30 percent.

In the three months to June 30, the mining company produced and sold 115,819 ounces of gold from its Paulsens, Plutonic, Kundana and Kanowna Belle projects in Western Australia. The recently acquired Jundee gold mine produced 75,390 ounces of gold in the second quarter of 2014.

“Whilst the ounces produced from Jundee are not attributable to Northern Star due to the handover occurring on 1 July, the combined total would equate to 191,209oz for the June Quarter 2014,” Northern Star said.

Northern Star, which recently acquired the Jundee gold Mine from Newmont Mining for $82.5 million, expects total production to increase to the rate of 550,000-600,000 ounces per annum.

According to managing director Bill Beament, the newly acquired mines are performing better than anticipated. “Production has exceeded our guidance across the board, putting us well on track to achieve our goal of being the second-biggest and one of the most profitable ASX-listed gold producers with the scale and asset diversity demanded by global institutions.”

The company spent $182.5 million buying the Plutonic, Kundana and Kanowna Belle mines from Barrick Gold.

Northern Star now has $82.3 million in cash compared with $67 million on March 31. Market value for the company is now $883 million and the stock is just 6.5 cent short of a closing record hit 18 months ago.