Motley Fool Australia

Will Northern Star Resources Ltd shoot the lights out in 2017?

gold bullion
Image source: Getty Images

Northern Star Resources Ltd (ASX: NST) today reported its half-year result to the market.

Here are the key takeaways from the gold miner’s report:

  • Revenue fell 2% to $415 million
  • Net profit rose 61% $104.6 million
  • 246,229 ounces of gold was sold at an average price of $1,683 per ounce
  • $61 million was invested to boost production to 600,000 ounces next year
  • The company’s all-in sustaining costs (AISC) came in at $1,076 per ounce
  • Total company cash and bullion stood at $303 million

The $2.7 billion gold miner said its performance proved the short and long-term objectives of the company.

“We have generated significant profit growth and maintained some of the highest financial returns on the ASX while investing heavily in our expansion strategy,” Executive Chairman Bill Beament said. “We are very confident that we will generate both strong returns on the capital we are investing in these growth projects and significant increases in overall cashflow as we ramp-up to 600,000ozpa next year.”

The company declared an interim fully franked dividend of three cents per share, equal to last year’s payment.

“We are retaining a robust cash balance and maintaining our dividend track record while funding the growth projects that will take our production to 600,000ozpa,” Mr Beament added. “Northern Star will emerge from this process with an enviable balance sheet and having unlocked the value of its assets to provide longer mine lives and increased production and cashflow.”

Should you buy Northern Star shares in 2017?

I have said time and again that you wouldn’t need to look beyond Northern Star, Newcrest Mining Limited (ASX: NCM) or Evolution Mining Ltd (ASX: EVN) to get a good exposure to gold.

However, while I think the future looks bright for Northern Star, its profit performance is heavily dependent on the price of gold and the Australian dollar. Therefore, it’s not a share I’d feel comfortable owning.

I prefer companies with less volatile sales and profits, to avoid losing money when the market takes a turn for the worst. 

Man who said buy Kogan shares at $3.63 says buy these 3 ASX stocks now

When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

In this FREE STOCK REPORT, Scott just revealed what he believes are the 3 ASX stocks for the post COVID world that investors should buy right now while they still can. These stocks are trading at dirt-cheap prices and Scott thinks these could really go gangbusters as we move into ‘the new normal’.

*Returns as of 6/8/2020

Motley Fool Contributor Owen Raszkiewicz does not have a financial interest in any company mentioned. Owen encourages your feedback. You can follow him on Twitter @OwenRask.

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.

Related Articles...

Latest posts by Owen Raszkiewicz (see all)