Northern Star boosts interim dividend by 25pc

Northern Star Resources has rewarded shareholders with a 7.5¢ fully franked interim dividend up 25 per cent on the 5¢ it paid last year...
14th February 2020
Resources Rising Stars

Northern Star Resources has rewarded shareholders with a 7.5¢ fully franked interim dividend up 25 per cent on the 5¢ it paid last year (reports The West Australian).

The juicier payout came on the back of a 54 per cent jump in net profit after tax in the first half to $126.8 million.

It follows the company’s policy of paying out 6 per cent of its revenue in dividends and was calculated before the company’s December acquisition of a 50 per cent stake in the Kalgoorlie Super Pit from Newmont for $US800 million.

The dividend will be paid on March 30.

RBC Capital Markets analyst Paul Hissey said the dividend was slightly softer than he expected, but left the company with sufficient cash availability to further pursue additional development of acquisition options at Pogo and the Super Pit.

“Looking through the next few years of our production and cost outlook for the large-cap gold names, Northern Star is best placed to grow both production and also lower cash costs,” he said.

Northern Star sold 398,640oz of gold in the half at an average price of $2046/oz.

The company said it was on track to meet previously issued full-year production guidance of 920,000-1.04Moz at costs of $1240-A$1340/oz.

Northern Star executive chairman Bill Beament said the results demonstrated the company’s financial strength, which was underpinned by the substantial cashflow now being generated by four Tier-1 assets.

“The fact that out EBITDA rose 45 per cent to $322 million speaks volumes about both the strength and quality of our business,” he said.

“The combination of these earnings, cashflows and overall returns is the result of our highly disciplined approach to capital investment, whether it be through exploration, development or acquisition.

“This reflects our long-standing mantra that we are a business first and a mining company second.”

Mr Beament said the results provided a strong insight into the cashflow which Northern Star was set to generate in the current half given the first-time inclusion of the company’s half-share of the Super Pit, the continuing operational progress at the Pogo mine in Alaska and record high gold prices.

“Our Australian operations performed exceptionally well, as demonstrated by the 47 per cent increase in their EBITDA to $352 million at an exceptional margin of 52 per cent,” he said.

“We are looking forward to reaping the benefits of the KCGM acquisition, which we believe will drive more substantial growth in our net cashflow while maintaining strong overall financial returns.

“We are delighted with the outlook for KCGM and we are making rapid progress on the review in partnership with Saracen.

“This is one of the best gold systems in the world and between us, we have some of the best open pit and underground mining specialists in the world assessing the operation and its potential.”

Subscribe to the RRS Weekly Wrap

© 2020 Resources Rising Stars All Rights Reserved