Northern Star – Good As Gold or Fool’s Gold?

Increasing costs and over-expenditure compared to the budgeted mine plans are major concerns. With Northern Star’s recent acquisitions and investments to expand assets, observers are sceptical whether these will bring in more profits. Is Northern Star’s Executive Chairman, Bill Beament, biting more than he can chew?

Beament’s Northern Star to expand Pogo plant

In the hopes of increasing reserves and resources, Beament’s gold miner has allotted A$43 million (US$30 million) to invest in the expansion of their Pogo processing plant in Alaska, North America, which will be completed in CY2021. 

According to the September 2019 Quarterly report of Northern Star Resources (NST), Pogo mined 28,962 oz of gold at an all-in sustaining cost (AISC) US$1,919 per oz, which represents an approximate US$400 loss per ounce produced.  

Based on wavering production results of Pogo, is it worth the effort, money, and resources to invest in the expansion of the North American mine? Was it a good decision from Beament to invest millions for the expansion of Pogo? 

Injunction halts Sumitomo-Northern Star Alaska deal reports that “An initial injunction in favour of privately held Nevada firm Great American Minerals Exploration (GAME) has put the brakes on a deal struck between Japan-based Sumitomo Metal Mining and Australian gold leader Northern Star Resources on prospective gold claims in interior Alaska near the Northern Star-operated Pogo mine.”

The full extent of NST’s exposure here is not clear as we can find no reporting or announcements from NST to the ASX.

Northern Star has been contacted for comment and at time of print no response had been received.

Pogo production results not up to par with Kalgoorlie and Jundee

Despite a bullish outlook on Pogo, Bill Beament still needs to bring the Alaskan mine par with NST’s Australia-based mining operations. 

Observers and shareholders are questioning whether Pogo is a good investment with its fluctuating production results, or if Beament should instead concentrate more on NST’s Jundee and Kalgoorlie operations. The jury is still out on whether Pogo was a good acquisition.

Bill Beament has been urging shareholders to be more patient with NST’s Pogo mine in Alaska, North America, promising rising productivity, increasing production, and falling costs. But, for how long will they hold up with negative results and significant losses?


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