Fast-growing gold miner, Northern Star Resources Ltd (ASX: NST), has delivered yet another strong quarterly report to shareholders today with the company hitting its targets across multiple metrics.
In the three months to 31 March 2015 total gold sales were 135,498 ounces (oz), taking the year-to-date total to an impressive 428,338oz. This places the company firmly in good stead to meet guidance of between 550,000oz and 600,000oz for the full year.
The other important component of profitable gold mining is costs. And during the quarter, Northern Star said its all-in sustaining cost (AISC) was $1,172/oz, slightly above its year-to-date average of $1,093/oz.
However both AISC figures include costs which are non-cash and a liability which will likely prove to be a one-off.
Another pleasing result was the down payment of debt. During the quarter, the miner paid down $15 million of debt, taking the total debt figure at reporting date to just $20 million. However, less than a fortnight after the period finished Northern Star said all bank debt was retired (although it still has an active revolving credit facility).
With $111.7 million in cash, bullion and investments Northern Star MD, Bill Beament, said the miner "had the ability to undertake value accretive acquisitions whilst funding its aggressive exploration campaign."
Indeed during the period the company's exploration began to bear fruit. Combined, resources at the Jundee and Pegasus projects increased by 650,000oz to 2.25 million ounces. This bodes well for future increases to mine life.
Should you buy Northern Star Resources shares?
Northern Star Resources has been the best-performing resources stock on the entire ASX over the past 10 years. This has come about partly thanks to great mining efficiencies and savvy investment decisions. With the company once again cashed-up and production levels generating good cash flows, I wouldn't be surprised to see it go on the prowl for new acquisitions. Maybe not this year but certainly in the near future.
Investing in gold stocks isn't for the risk-averse because there are many volatile factors that ultimately determine their profitability. However if your partial to it Northern Star and quality fellow ASX-listed gold miners such as Independence Group NL (ASX: IGO), Newcrest Mining Limited (ASX: NCM) and perhaps even EVOLUTION FPO (ASX: EVN) could be worthy of further consideration.
