Northern Star Resources is pleased to advise that resources at its Ashburton Gold Project in WA have increased by 66 per cent to 1.67 million ounces1. The increased inventory, which comprises 21.3 million tonnes at 2.4gpt, underpins Northern Star's plan to establish a stand-alone operation at Ashburton. In line with this strategy, a maiden sulphide reserve for Ashburton is scheduled for completion in the second half of this year. Ashburton sits 200km from Northern Star's Paulsens Gold Mine, where a recently-completed plant expansion has put the Company on track to produce up to 115,000oz this calendar year, generating up to $85 million in surplus cash.

Economic and technical studies on the development of Ashburton are well advanced. These are based on a two-staged strategy, with Stage One comprising an oxide project and Stage Two being based on a sulphide plant. The updated resource includes 7.4 million tonnes of oxide ore grading 2.7gpt for 647,000oz2 and a further 13.9 million tonnes of sulphide ore grading 2.3gpt for 1.02Moz2. Commencing production at Ashburton as a free-milling operation will de-risk the subsequent establishment of a long life, high-grade sulphide operation and bring earlier cashflow. Metallurgical test work on the Ashburton sulphide ore has produced encouraging results, with total gold recoveries between 80 and 90 per cent. Historical oxide processing recovery was 95 per cent at the Ashburton Gold Project from 1998 to 2004.

Northern Star Managing Director Bill Beament said Ashburton was now a major deposit by any standard. "To establish a 1.7Moz resource, with clear scope for further increases, is a great outcome anywhere in the world," Mr Beament said. "But to have it in WA, just 200km from our existing Paulsens project, with all the certainty and other significant benefits that it brings, is very valuable for Northern Star shareholders. "It is becoming increasingly clear that Ashburton will be another stand-alone operation with low costs and strong cashflow, giving Northern Star the project diversity and critical production mass being demanded by investors.

"And we will be delivering that outstanding production growth and cashflow from the backyard of Western Australia." Late last year, successful remodelling of the geological structure of Mt Olympus enabled the Company to target the mineralisation more effectively. This resulted in a substantial 350 m down plunge extension to the Resource. This new understanding of the mineralisation will be further evaluated when drilling resumes in the next Quarter.

Part of the drilling campaign at Ashburton last year focused on the Peake Prospect which is located 3km from the Mt Olympus deposit. The Peake prospect is an open pit that was mined in 2001 and produced approximately 89,000t at 6.5gpt for 18,700oz from the oxide zone.  The mined ore body has a strike length of 600m, true width of 2-4m and dips 70-85 degrees south. A significant resource increase of more than 200 per cent was achieved at the Peake Prospect as part of the current upgrade. The resource now stands at 3.7 million tonnes at 3.4gpt for 399,000 ounces1. With only limited drilling, there has seen a substantial increase in the known strike length at Peake. This will form the basis of a further phase of drilling in 2013.