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Gold miner Northern Star increases half-year cash earnings by 3% to ~US$323 million

Kitco News

(Kitco News) - Northern Star (ASX: NST), a senior global gold producer, reported today that for the half-year period ended 31 December 2022 (HY22), the company sold 773,243 ounces of gold compared with 778,815 ounces for the half-year period ended 31 December 2021.

In a statement, the company said that its HY22 revenue of A$1,949 million (~US$1,347 million) was up 5% from the prior half year period primarily due to higher average realized gold price.

The company added that underlying EBITDA of A$633 million (~US$438 million) was down 12% as cost challenges offset higher gold prices, while cash earnings (defined as underlying EBITDA less net interest and tax paid and sustaining capital) of A$467 million (~US$323 million) were up 3%.

Northern Star also announced record interim fully franked dividend of A11 cents per share, up 10%, which represents a 27% payout of cash earnings versus 20-30% dividend policy.

Northern Star pointed out it is on track to deliver 1,560koz – 1,680koz of gold in FY23 (a year ended 30 June 2023), which will be weighted towards 2H as a result of the scheduled ramp-up of the Thunderbox mill expansion and grade improvements at Pogo.

Commenting on the results, Managing Director Stuart Tonkin said, “The strength and resilience of our world-class gold assets in Western Australia and Alaska were on show in the first half and delivered significant cash earnings despite the industry wide cost pressures. This has enabled the Board to declare a record interim dividend of 11 cents per share, at the top end of our dividend policy and complementing the A$300 million share buyback that commenced during the half.

“At the same time we have made further progress with executing our low-risk, profitable growth strategy to become a 2Mozpa gold producer by FY26. Key growth projects Pogo and Thunderbox are delivering significant cost improvements. A continued focus in the second half on costs across all three operating centres, alongside the expected lift in group production to meet our FY23 guidance, should further build cash to maintain Northern Star’s strong financial position. Work is also continuing on finetuning the KCGM mill optimisation project.”

Northern Star is a global-scale Australian gold producer that owns and operates three world-class gold production centers (Kalgoorlie, Yandal and Pogo), located in prospective geological settings in the low sovereign risk jurisdictions of Australia and North America.

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