At time of writing, Northern Star Resources Ltd [ASX:NST] shares are trading at $9.14. This is an impressive 7.65% jump from yesterday’s figures.
The Aussie gold-producing company that operates and profits on a global scale pride themselves on their mantra as being ‘…a business first and a mining company second.’
This morning, the slides from Northern Star’s investor Presentation at the JP Morgan Conference were released on the ASX. New projects announced in the presentation point towards commitment to this ‘business first’ initiative, which seems to be music to investor’s ears.
Strategic investing set to help Northern Star’s share price
Northern Star have been investing significantly into natural forms of growth such as exploration and cost-cutting measures. Their organic growth strategy has made over $4.65 billion in value for shareholders since their first gold acquisition in 2010.
The current tier 1 gold mining locations situated in Australia, US and Canada are slowing on production because of depleting reserves and a lack of newly discovered abundances. But Northern Star has announced they will shortly be adding two new mines — Jundee and Kangoorlie — to this tier 1 list, thus boosting production pace for the industry.
Another solidified venture for the company has been the acquisition of the world class Pogo underground gold mine in Alaska for US$260 million. This is yet another high grade, low cost, tier 1 asset added to the company to help make up falling production levels.
This venture, according to Northern Star, is expected to add up to 269,000oz to production for FY19. On current valuations, it will lift the company to the title of second-largest gold producer listed on the ASX.
And Northern Star insists they are prepared for this undertaking. By identifying many similarities between the Pogo and Jundee mines, the company already have access to a value creation template which they can apply to Pogo. They will also employ the same Integration Team to both mines to maintain this consistency.
More good news to come for Northern Star share price
The report reiterates that for the last five years Northern Star has delivered the best in class financial returns worldwide.
Regarding these returns, the report states ‘NST has been able to consistently grow production, resource and reserve life on a per share basis for its Shareholders since 2010 and has been our key focus for the past 4 years.’
Northern Star were also proud to reveal their zero debt status, with $263 million in cash. They have an underlying free cash flow of $186 million and an average shareholder return for the past five years of 76%.
Of course nothing lasts forever, but for now all is looking good for Northern Star Resources. And with the US tax reform causing uncertainty around finances, people will be rushing towards gold to secure a physical form of currency.
Keep a look out on this space to hear the latest.
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