What’s sending the Northern Star share price higher today?

The gold miner reported it will return 20% to 30% of cash earnings as dividend payouts at its investor presentation, held at the Bank of America Conference.

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Key points

  • Northern Star share price is lifting today following investor presentation
  • The ASX 200 gold miner reports it can sustainably produce some two million ounces of gold per year
  • The company is aiming to slash emissions by 35% by 2030

The Northern Star Resources Ltd (ASX: NST) share price is moving higher in morning trade.

Northern Star shares closed yesterday at $8.60 and are currently trading for $8.68, up 0.9%.

This comes as the S&P/ASX 200 Index (ASX: XJO) gold miner released its investor presentation at the Bank of America Conference.

What did the company report at the BofA Conference?

Northern Star is one of the largest gold miners in the world. The company has producing mines in the US state of Alaska (Pogo) and Western Australia (Yandal and Kalgoorlie). The Aussie operations account for 85% of its total production.

All told, the miner reports it can sustainably produce some two million ounces of gold per year, citing continuing cost improvements and higher quality grades to increase profitability.

Investors may be bidding up the Northern Star share price on the report of its assets’ long mine life. The company forecasts at least 20 years of sustainable production, targeting a 20 million ounce reserve and a 60 million ounce resource.

On the environmental front, the gold miner is aiming for a 35% reduction in its emissions by 2030 with an end goal of net zero by 2050.

As for risk management, the miner has a three-year hedge book of 1.1 million ounces of gold at AU$2,446 per ounce. This represents around 20% of its gold production over the next three years.

The company also highlighted its previously reported results for the first half of the 2022 financial year (1H FY22). These included an underlying net profit after tax (NPAT) of $108 million and underlying earnings before interest, taxes, depreciation and amortisation (EBITDA) of $699 million.

The forecast that its fourth-quarter performance will be better than its third-quarter performance could also be helping lift the Northern Star share price today.

And the updated dividend policy was discussed, which will see 20% to 30% of cash earnings (EBITDA less net interest and tax paid and sustaining capital) returned to investors as dividend payouts.

Northern Star share price snapshot

The Northern Star share price has struggled this year with gold prices currently down about 1% since 1 January.

Northern Star shares are down 8% in 2022, compared to a loss of 5% posted by the ASX 200.

The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. 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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