In morning trade the Northern Star Resources Ltd (ASX: NST) share price has raced higher following the release of the gold miner's half year results.
At the time of writing the Northern Star share price is 5% higher to $9.40.
What happened in the first half?
During the first half Northern Star delivered an underlying profit of $89.1 million on revenue of $633.5 million. This was an increase of 11% and 43%, respectively, on the prior corresponding period.
This was driven by the sale of 423,243 ounces of gold at an average price of $1,700 an ounce.
This strong financial performance was achieved despite the company embarking on a record investment of $83 million in exploration and expansionary capital. This includes a $10 million investment in the very promising Pogo operation.
After generating $169.1 million of cash flow from operations, Northern Star finished the period with $292 million in cash, bullion, and investments despite outlaying $196 million on acquisitions during the half. It has no debt on its books.
Earnings per share came in at 13 cents per share, of which almost half will be paid out to shareholders through its 6 cents per share interim dividend.
Outlook.
Management confirmed that it is on track to meet its FY 2019 production guidance of 850,000 ounces to 900,000 ounces of gold at an all-in sustaining cost (AISC) of $1,125 to $1,225 an ounce.
The latter will be a reduction from an AISC of $1,295 an ounce during the first half.
Should you invest?
Whilst I'm not a buyer of gold shares as I'm not overly bullish on the gold price in 2019 and 2020, I think this result demonstrated why Northern Star is one of the best options on offer in the industry along with Newcrest Mining Limited (ASX: NCM) and Resolute Mining Limited (ASX: RSG).
If you're bullish on the gold price then I would class its shares as a buy.
