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Northern Star Resources Ltd is poised to ramp up gold production

The Northern Star Resources Ltd (ASX: NST) share price was up 0.2% to $6.39 on Monday, on top of a 50% increase over the past 12 months, following the release of the gold miner’s quarterly report.

The result was weak compared to the previous quarter. Gold production decreased 4% to 120,000 ounces, yielding a 9% decline in revenue, despite a higher average realised gold price of $1,720 per ounce.

The all-in sustaining cost (AISC) increased slightly to $1,075 per ounce – not exactly one of the lowest in the industry, but still ensuring a healthy operating margin.

Northern Star generated an underlying free cash flow of $32 million in the quarter, despite investing $33 million in expansionary capital.

The good news is that the company has now completed an investment strategy poised to lift production to 600,000 ounces per annum, starting with a 150,000 ounces output estimated for the current quarter.

The plan included the expansion of activities at the company’s Jundee project, exploration of new projects and the acquisition of South Kalgoorlie from Westgold Resources Ltd (ASX: WGX) for $80 million.

Northern Star has a strong financial position, with $439 million in cash and no bank debt.

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Motley Fool contributor Tommaso Autorino has no position in any of the 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 Scott Phillips.

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