PERTH (miningweekly.com) – Gold miner Northern Star Resources has started its 2019 financial year strongly, reporting production of 207 600 oz of gold in the three months to September.

The production performance was a 13% increase on the 183 949 oz produced in the previous quarter, with the miner telling shareholders on Thursday that it was on track to achieve its full year production guidance of between 850 000 oz and 900 000 oz.

The Jundee gold operation delivered 84 399 oz during the September quarter, with the Kalgoorlie operation delivering a further 94 190 oz, while the newly acquired Pogo gold mine, in Alaska, accounted for 66 364 oz of the production.

Northern Star assumed management control of Pogo at the end of September.

Executive chairperson Bill Beament said on Thursday that the September quarter was a pivotal one for the company, launching Northern Star to the next level of production and free cash flow, without detracting from its financial returns.

“Growth was the overwhelming theme of the September quarter. There was a great balance of organic and acquisition-led growth marked by strong increases in our reserves, resources, production and free cash flow,” said Beament.

“And importantly, this growth will ensure we maintain our industry-leading financial returns.”

Gold sales for the September quarter reached 212 682 oz, up from the 182 856 oz sold in the previous quarter. However, on the back of a weaker average gold price, revenue for the quarter declined from A$316.5-million to A$258.9-million.

Meanwhile, all-in sustaining costs (AISC) for the quarter increased from A$982/oz to A$1 226/oz.

Beament said that the AISC for the quarter at the Kalgoorlie operation was higher than the yearly guidance of between A$1 050/oz and A$1 150/oz, owing to the increase of gold inventories across all sites, and the decline in development expense at the South Kalgoorlie operations.

He noted that the Pogo mine’s performance was also restricted by insufficient mined tonnage to the mill, which operated at less than 70% of its capacity. This, coupled with gold unsold, resulted in an AISC of A$1 493/oz, which increased the group’s overall AISC.

Since taking management control of Pogo, Northern Star has been implementing a range of effective operational changes, many of which involve increasing the scale of mining activity and the number of work areas, Beament said.

As a result, mill utilisation rates are forecast to rise to some 90% in the current quarter, and 100% in the upcoming June quarter.

These changes are expected to see Pogo meet its targeted production of between 250 000 oz and 260 000 oz at an AISC of A$1 189/oz.