KALGOORLIE (miningweekly.com) – ASX-listed Northern Star Resources will spend A$35-million on exploration over 2016, after its A$50-million exploration spend in 2015 delivered massive results.

MD Bill Beament told delegates attending the second day of the Diggers & Dealers conference that exploration in 2015 resulted in a 44% increase in Northern Star’s resources, increasing resource estimates by 2.7-million tonnes to 8.9-million tonnes.

The significant resource increase came despite some 622 000 oz of gold being mined by Northern Star since the company last calculated a resource estimate a year ago.

Beament noted that some eight new discoveries were made across the company’s project portfolio, while resource upgrades were recorded at the Jundee and Kalgoorlie operations, while ounces were also replaced at the Paulsens and Plutonic mines.

The resource estimate also contained a 42% increase in the measured and indicated categories, which now stood at a combined 4.4-million ounces.

“These figures more than justify our decision to invest A$50-million in exploration over the past year. They also underpin our commitment to spend another A$35-million on exploration this financial year,” said Beament.

“We have always said that the major gold system at each of our projects would be shown to host significantly more gold. These results prove that to be the case. They also provide us with further confidence that we will continue to identify more gold and continue to grow mine lives.”

Beament pointed out that the additional resources have come at a cost of just A$19/oz to Northern Star, highlighting the attractive economics of the company’s exploration and growth strategy.

“The simple fact is we would never be able to acquire resources or reserves at anywhere near this price,” he said.

“Growth through exploration unquestionably delivers superior returns [to shareholders]. The economics of this strategy are even more attractive when it is remembered that each new ounce allows us to further leverage our existing infrastructure.”

Over the next 12 months, Northern Star would work to incorporate the upgraded resource into the current mine plans, Beament said.

In addition to the planned exploration spend in 2016, Northern Star would spend A$39-million in investment and expansion capital to bring the recent discoveries closer to production and to lift group gold production from 2017 onward.

“We are investing quite heavily into bringing [on line] mines of the future and expanding that investing capital to grow production in years to come,” Beament said on the sidelines of the conference.

Meanwhile, Northern Star, at the end of last week, also completed its transaction with Tanami Gold over the Central Tanami gold project, in the Northern Territory.

Northern Star issued 4.29-million of its own shares, along with A$11-million in cash to Tanami Gold, to acquire a 25% interest in the Central Tanami project, which could produce at a rate of 150 000 oz/y.

Northern Star was hoping to bring the Central Tanami project into production by 2017.