With a share price up 120% in the last 12 months, expectations were clearly high that Northern Star Resources Ltd (ASX: NST) would announce a huge result today. Here’s what you need to know about the company’s full year result:

Northern Star Resources Ltd

FY15

FY16

% Change

Production (oz)

581 k

561 k

-3%

Revenue ($millions)

$728 m

$786 m

8%

Profit  ($millions)

$92 m

$151 m

65%

Dividend

5cps

7cps

40%

True to form Northern Star delivered an impressive result with profit soaring 65% on a higher average gold price and lower production costs. The company raised its full year dividend to 7 cents per share which will come fully-franked.

Also impressive was the fact that three of Northern Star’s core mine assets produced EBITDA (Earnings Before Interest Tax Depreciation and Amortization) margins over 50%.

What now for Northern Star?

It was a standout result for Northern Star, a company which has been my pick of gold miners for a while.

Most important for investors is the strong footing the company has looking ahead.

Northern Star remains one of the lowest cost ASX listed producers with an FY16 average All-In Sustaining Cost (AISC) of production per ounce of $951, compared to Newcrest Mining Limited’s (ASX: NCM) annual average AISC of $1,046. So it is well positioned to take advantage of any rise in gold prices going forward.

The company’s superb mine acquisitions made during the deep lows of the gold price slump have positioned it for success in the medium-term, while the news that it is targeting annual production of 600,000 oz by FY18, up from 215,400 oz  just two years ago is mighty impressive.

So, should you buy?

Low operating costs, low debt, strong margins and big production growth makes Northern Star an appealing business to own. The company even has an undemanding valuation, despite the recent run-up in share price. In almost any other industry I would jump on it.

But Northern Star’s performance is still inescapably shackled to the price of gold and beyond projecting out a trend line, I am pretty terrible at forecasting the future price of gold. Because of this I would be sure to limit my exposure to any gold miner to only a small percentage of my portfolio.

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Motley Fool contributor Regan Pearson has no position in any stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.