Northern Star Resources Limited Announces Purchase Agreement...

Industry News

& Articles

Northern Star Resources Limited Announces Kalgoorlie Power Plant Acquisition

Facebooktwitterlinkedin

Northern Star Resources Limited (ASX:NST) announces purchase agreement with Newmont Australia for Parkeston Power Station, expects continuing production growth towards FY26.

  • 1Q22 sales volume of 386,160 ounces of gold @ A $1,594 per ounce
  • FY21 Earnings Before Interest, Tax, Depreciation, and Amortisation (EBITDA) up 216 per cent at $2,268 million,
  • FY21 Net Profit After Tax (NPAT) up 300 per cent at $1,032 million

With a current portfolio comprising 6 West Australian mines and its Pogo site in Alaska, Northern Star’s announcement today of an acquisition involving Newmont Australia’s power business demonstrates a lateral move to improve its All-In-Sustaining-Cost (AISC) for years to come. The acquisition deal will see Northern Resources purchasing Newmont’s power business for US $95 million. The deal comes as a part of an earlier option exercised by Newmont, during its acquisition of 50 per cent of Kalgoorlie Consolidated Gold Mines Pty Ltd (KCGM).

Exercising this option to complete the purchase will see Northern Star paying a balance of US $70 million to complete the sale agreement, expected to finalise in December this year. As part of the purchase, Northern Star will enter a binding sale agreement with Newmont to fully acquire GMK Investments Pty Ltd, which currently owns and operates Newmont Power (NP) Pty Ltd, and NP Kalgoorlie Pty Ltd. The latter company presents with 50 per cent ownership of Goldfields Power Pty Ltd, which controls the Parkeston Power Station in Kalgoorlie-Boulder, Western Australia.

The 110 MegaWatt capacity power station supplies KCGM and the surrounding Kalgoorlie area with electricity. Said Northern Star Managing Director Stuart Tonkin, “The purchase means our Kalgoorlie power supply will now form part of our studies into ways to meet our commitment to becoming carbon-neutral.”

Northern Star’s Continuing Progress Along FY26 Trajectory

The group’s environment, social and safety initiatives see it setting a 2050 goal to achieve net zero scope 1 and 2 greenhouse gas emissions. Additionally, it anticipates setting a 2030 target to be clarified within its 2021 Sustainability Report, due March 2022. Alongside its current trajectory towards a carbon-neutral production profile, Northern Star also sees continuing production performance, moving in line with its expectations to deliver 2 million ounces of gold annually by FY26.

In its 1Q22 report published on 19 October, Northern Star presented shareholders with a number of performance updates — among which include a total of 386,160 ounces of gold sold at A $1,594 per ounce during the reporting period. This places the company well on track to deliver its earlier provided FY22 guidance of 1.55 - 1.65 million ounces at AISC of A $1,475 - $1,575 per ounce.

The company’s 1Q22 performance is seen as a continuation of its record A $648 million cash earnings generated in FY21. For the full year reported, Northern Star delivered EBITDA up 216 per cent at $2,268 million, and NPAT up 300 per cent at $1,032 million — crediting its record performance to the strength of its underlying business.

In anticipation of its full-year results, the company notes most of FY22 production to weigh towards the second half, especially with increased grades expected of its Yandal production, and increased mining rate within its Pogo site. Additionally, Northern Star expects its AISC to fall over FY22. At the time of writing, the Northern Star share price is trading at 29.76 per cent lower since this time last year.

Louis Mosmann

Louis Mosmann is a Private Wealth Client and Research Assistant at KOSEC- Kodari Securities. Louis covers macroeconomic events, global markets and ASX300 company announcements, allowing clients to make more informed investment decisions. Email Louis at l.mosmann@kosec.com.au.

Comment on this company

Latest Stories

Fisher & Paykel Healthcare Revenue Down

Fisher & Paykel Healthcare Revenue Down……

Iron Ore Prices Show Signs Of Rebound

Iron ore prices see a potential rebound in price……

Harvey Norman, Lockdown Restrictions Reduce Sales

Lockdown restrictions reduce sales by 8.8 per cent… …

More for you

NIB Holdings Limited Adds Kiwi Insurance And Telehealth Investment

NIB Holdings Limited (ASX:NHF) announces $4 million investment……

Link Administration Holdings Limited Manages Strong Acquisition Interests Ahead Of 2H22 Results

Link Administration Holdings Limited Manages Strong Acquisition Interests Ahead Of 2H22 Results……

WiseTech Global Looks To Capitalise On Global Supply Chain Congestion

WiseTech Global Looks To Capitalise On Global Supply Chain Congestion……

Accent Group Limited Plots Ambitious Steps Towards Retail Expansion

Accent Group Limited Plots Ambitious Steps Towards Retail Expansion……

Sonic Healthcare Significantly High COVID-19 Test Volume

Significantly high COVID-19 test volume……

Aristocrat Leisure Rakes In Strong Earnings With FY21 Report

Aristocrat Leisure Limited has today published its FY21, highlighting……

KOSEC Terms & Conditions

Kodari Securities Pty Ltd (CAR 399556) trading as KOSEC is regulated by the Australian Securities and Investment Commission (ASIC). KOSEC is a financial services company and any information provided by its platforms, portals, reports and documents is protected by copyright. Any unauthorised production of this information is prohibited.
KOSEC reserves the right to change or remove any information provided on our website, reports or any documents including these terms and conditions at any time without notice. The change or modification to the terms and conditions will be effective immediately upon posting an updated version on our website, necessary platforms and documents. It is recommended that you review the information provided on our website, including these terms and conditions frequently for any changes.

Disclaimer
KOSEC provides general advice only. The information provided is of a general nature only and does not take into account your individual objectives, financial situation or needs. It should not be used, relied upon, or treated as a substitute for specific professional advice. KOSEC recommends that you obtain your own independent professional advice before making any decision in relation to your particular requirements or circumstances. Please make sure you read our Financial Services Guide (FSG).

KOSEC does not guarantee any returns. Past performance of any product discussed is not indicative of future performance. (We urge that caution should be exercised in assessing past performance. All financial products are subject to market forces and unpredictable events that may adversely affect their future performance). Investing in the stock market can incur huge losses. Please also be aware that fees will incur on every transaction regardless of the performance of your investments or returns generated. Employees and or associates of KOSEC may hold one or more of the stocks, securities or investments reviewed by the company.

Your use of information from our website, reports, documents and from talking to our representatives/associates is at your risk. Under no circumstance should the investment be based solely on KOSEC information and general advice. You should seek professional financial planning advice.
KOSEC aims to maintain the accuracy of the data and information provided on this website, by using information prepared from a wide variety of sources, which KOSEC to the best of its knowledge and belief, considers accurate and does not make any representations or warranties of any kind, expressed or implied, about the completeness, accuracy, reliability, suitability or availability of the information provided.

We may at times refer to third parties, which the details of these third parties have been provided solely for you to obtain further information about other relevant products and entities in the market. KOSEC has no control over the information third parties have, or the products or services offered, and therefore make no representations regarding the accuracy or suitability of such information, products or services. You are advised to make your own enquiries in relation to third parties. Our inclusion of any third party content is not an endorsement of that content or the third party.

Fees
As a client you will be charged a yearly service fee and a set brokerage fee per transaction. Your service fee will automatically renew at the end of your agreed 12 month period at the same rate advertised at the time. Your credit card or bank account will be charged for a further year following which will again auto renew until you cancel your yearly service fee. You can cancel the auto renewal at any time in advance of the renewal date by contacting us. KOSEC is aware of the need to ensure the security of your credit card details and our payment systems are compliant with the Payment Card Industry (PCI) Data Security Standard.

Privacy
You consent to receiving email correspondence from KOSEC, as well as companies KOSEC has an association with. These emails will be sent by KOSEC and third party companies. You can opt out of receiving any category of emails at any time by contacting us. We may from time to time inform you of special offers, or even ask your opinion of the services we provide, but your involvement is optional. Should you request us to do so, we will archive your details.

Indemnity and Liability
You indemnify KOSEC from all claims or threatened claims, suits, demands, damages, costs as well as including legal costs incurred in dealing with any threatened claim, expenses made by any person or corporation against KOSEC and any other amounts which is caused by KOSEC providing information, execution and General Advice.

You hold KOSEC harmless and release it from any liability in respect of any loss, harm or damage arising from a decision made by you on the basis of information obtained through the use of our portal, reports, documents or any General Advice given and any transaction taken place.

You hold KOSEC harmless and release it from any liability in respect of any loss, harm or damage arising from delays in executing orders for the client and acknowledges KOSEC makes no guarantees about the time taken to execute an order on behalf of the client. You acknowledge that KOSEC relies on third parties in providing technology and release KOSEC from any harm, loss or damage you may suffer as a result of the failure of such information technology.

Cookies and Links
KOSEC website, and its portal uses cookies, which lets us identify your browser while you are using the site or our portal. Cookies do not identify you personally. They simply allow us to track your usage patterns. If you prefer not to receive cookies, you can configure your browser to reject them or to notify you when they are being used. The functionality of the KOSEC website may be impacted if you restrict the use of cookies.

Fill up the form below and we will get back to you as soon as possible.

CLAIM YOUR FREE E-BOOK &
7 DAY ACCESS TO LOTUS BLUE

STOCK MARKET SUCCESS

KOSEC’s CEO, Michael Kodari’s new book, “Stock Market Success” valued at $39.95, available at Dymocks book stores with all the proceeds going to Dymocks Children’s Charities.

CLAIM YOUR FREE E-BOOK WHEN YOU LOGIN TO LOTUS BLUE INVESTMENT PORTAL

Latest TV Commercial