Pogo will become Northern Star's flagship: Tonkin
Northern Star Resources is more confident than ever that its Pogo mine in Alaska will become a 300,000 ounce per annum producer
7th June 2019
Resources Rising Stars
Northern Star Resources is more confident than ever that its Pogo mine in Alaska will become a 300,000 ounce per annum producer (reports MiningNews).
The company paid A$351 million for Pogo in late September last year and has been working on integrating the asset.
A weak March quarter, where Pogo produced 36,227 ounces of gold at all-in sustaining costs of $2062 an ounce, got the market nervous.
But Northern Star CEO Stuart Tonkin told the Resources Rising Stars conference on the Gold Coast today the integration and "renovation" would take 18 months and was progressing to plan at the halfway point.
Stoping rates rose from 11% in the March quarter to 27% in the month of April and the balance of the new mining fleet will arrive this quarter.
Cultural issues of going into a new jurisdiction can be significant, but Tonkin said the attitude and acceptance of its Alaskan workforce had been excellent.
Tonkin said over time, Northern Star remained confident Pogo will eventually produce 300,000ozpa.
"Pogo, for us, is the next Jundee," he said.
"For us, we're just looking in the window of what Pogo can be.
"It's going to be the best asset in Northern Star."
Pogo has had less than a tenth of the drill holes Northern Star's Jundee mine in Western Australia has had.
While Jundee has had 10 million metres of drilling for 10 million ounces of gold, Pogo has had just 800,000m of drilling for 8Moz.
A maiden JORC reserve is due in early August.
"We're going to show mine life," Tonkin said.
Drilling under Northern Star has returned 5.8m at 59.7 grams per tonne gold and 22.5m at 33.8gpt gold at the Liese vein system.
The company also discovered the Central Lodes vein system, about 800m from existing mine infrastructure and open in all directions, with results including 2m at 175.3gpt gold.
Northern Star is spending $75-80 million on exploration across its assets this financial year.
Tonkin said the company had 160 geologists and 35 drill rigs consistently turning.
"Do you find it or do you buy it? We've done both," he said.
"If you don't drill, you don't find and if you don't find, you don't mine."
Northern Star shares traded at an all-time high of $10.28 yesterday but closed at $9.99.
Still, since its first acquisition in 2010, it's a return of more than 18,000%.
"Our growth has been through operational excellence, not acquisitions," Tonkin said.
"The value creation is in the mine life extensions. Every asset [we acquired] would now be closed under the previous owners."
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