Northern Star Resources Ltd (ASX: NST) shares have delivered some benchmark-smashing returns in 2024.
Shares in the S&P/ASX 200 Index (ASX: XJO) gold miner kicked off the year trading for $13.72 apiece. In early afternoon trade today, shares are up 0.9% and swapping hands for $16.50. Shares in the ASX gold stock are now up 20.2% this calendar year.
That's almost twice the 10.2% of the year-to-date gains delivered by the ASX 200.
If we add in the 40 cents a share in unfranked dividends paid to eligible shareholders since January, then the accumulated value of Northern Star shares has gained an even more welcome 22.5%.
And 2025 could see the miner continue to outperform.
That's according to Catapult Wealth's Dylan Evans (courtesy of The Bull), who has a buy rating on the big Aussie gold miner.
Image source: Getty Images
Why Northern Star shares could keep shining bright in 2025
The first reason Evans is optimistic about the outlook for Northern Star shares is a potentially rising gold price in 2025.
The ASX 200 gold stock has already enjoyed a 28% rise in the gold price in 2024. The yellow metal is currently fetching US$2,644 per ounce, up from US$2,059 on 2 January.
"We are bullish about the outlook for gold. We expect gold prices to be supported by growing budget deficits across Europe, Japan, and the US," Evans said.
The second reason Catapult Wealth has a buy rating on Northern Star shares is the miner's forecast production increase.
According to Evans:
Northern Star is well placed to benefit from a rising gold price, with its plan on track to grow core production from 1.6 million ounces a year to two million ounces within the next two years.
Northern Star's recent update included disappointing sales numbers, in our view, due to work at two of its mines. But we believe this will be a short-term setback, with momentum returning during the next 12 months.
The disappointing sales numbers Evans refers to cover the September quarter. The gold miner reported gold sales of 394,000 ounces for the quarter at an all-in-sustaining cost (AISC) of AU$2,082 per ounce (US$1,395/oz).
That was down from gold sales of 439,000 ounces in the June quarter.
Which brings us to the third reason Evans flags to buy Northern Star shares: The miner's $5 billion acquisition bid.
"NST has agreed to acquire De Grey Mining Limited (ASX: DEG) and its flagship project, Hemi, a large-scale gold development project in the Pilbara region of Western Australia," he said.
Commenting on that acquisition last Monday, Northern Star CEO Stuart Tonkin said:
De Grey's Hemi development project will deliver a low-cost, long-life and large-scale gold mine in the Tier-1 jurisdiction of Western Australia, enhancing the quality of Northern Star's asset portfolio to generate cash earnings.
