PERTH (miningweekly.com) – Gold miner Northern Star Resources has reported an 83% fall in net profit after tax for the half-year to December, and a 34% fall in earnings before interest, taxes, depreciation and amortisation (Ebitda).

Net profit fell from the A$276.8-million in the half-year ended December 2021, to A$47.7-million, while Ebitda in the same period fell from A$948.4-million to A$622.9-million.

The ASX-listed miner on Monday reported that revenue for the half-year was up 5% on the previous corresponding period, to A$1.94-billion, primarily owing to a 5% increase in the gold price, while gold sales remained consistent in the period at 773 243 oz, compared with the 778 815 oz sold in the same period last year.

However, the cost of sales increased by 12%, driven by higher average cash costs per ounce sold, as inflationary pressures in the mining industry took its toll.

Northern Star also reported an impairment charge of A$19-million relating to exploration-focused assets following the half-yearly reviews of the company’s drilling programmes.

During the period under review, Northern Star made net drawdowns of A$250-million of corporate bank debt, paid stamp duty relating to its 2021 merger with Saracen Mineral Holdings of A$156-million and returned cash to shareholders through dividends of A$134-million and A$127-million of the share buy-back.

Operating cash flows for the period, following the stamp duty payments, were A$47-million.Total capital expenditure including exploration was 16% higher at A$549-million.

“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 11c a share, at the top end of our dividend policy and complementing the A$300-million share buy-back that commenced during the half,” said Northern Star MD Stuart Tonkin.

“At the same time we have made further progress with executing our low-risk, profitable growth strategy to become a two-million-ounce-a-year gold producer by 2026. 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 2023 guidance,  should further build cash to maintain Northern Star’s strong financial position. Work is also continuing on finetuning the Kalgoorlie Consolidated Gold Mines (KCGM) mill optimisation project.

“Northern Star made great progress during the half to deliver superior returns to shareholders. Our focus remains steadfast on operational excellence and a disciplined and mature approach to investing shareholders’ funds,” said Tonkin.

For 2023, the miner has set a production target of 1.56-million to 1.68-million ounces, with production weighted towards the second half of the year, with all-in sustaining cost estimates estimated at between A$1 630/oz and A$1 690/oz.