The Northern Star Resources Ltd (ASX: NST) share price is bouncing around on Tuesday after the company released its December quarter activities report.
The Northern Star share price opened 1.18% lower at $16.79 per share, then rose to an intraday high of $17.04, up 0.29%, after about an hour of trading.
The ASX 200 gold share then reversed course and slipped back into the red.
The gold stock is currently flat at $16.99, while the S&P/ASX 200 Index (ASX: XJO) is up 0.6%.
Let's take a look at the latest news from the ASX 200's biggest gold miner.
Northern Star share price lower following quarterly report
Here are the highlights of the report:
- Total 410,249 ounces (oz) of gold sold at an all-in sustaining cost (AISC) of A$2,128/oz
- Kalgoorlie mine sales of 208,035 oz at an AISC of A$2,019/oz
- Yandal mine sales of 131,617 oz at an AISC of A$2,254/oz, with the Jundee and Thunderbox mills delivering at nameplate capacity
- Pogo mine sales of 70,597 oz at an AISC of US$1,450/oz, with the mill delivering a 1.5Mtpa annualised run rate
- Generated underlying free cash flow of A$72 million, which is forecast to increase in 2H due to higher gold sales
- Net cash of A$265 million at 31 December, with cash and bullion of A$1,215 million after receiving A$206 million from Osisko debenture proceeds
- 1H FY25 cash earnings estimate of A$1,130 million to A$1,170 million, up from A$701.7 million in 1H FY24
What else happened in the December quarter?
Northern Star said its all-in costs (AIC) were A$3,278/oz in the December quarter. This is higher than a year ago due to capital growth projects, led by the KCGM Mill Expansion Project.
Northern Star said it expected a second-half production uplift at KCGM now that the East Wall remediation was complete and underground development metres have been increased for the third consecutive quarter.
Overall, the KCGM Mill Expansion is on track, with bulk structural steel on site and pre-assembly of the off-site primary crusher now underway.
The big news during the quarter was Northern Star's announcement of a $5 billion takeover of De Grey Mining Limited (ASX: DEG).
The companies have entered into a binding scheme implementation deed. Northern Star will acquire 100% of De Grey Mining shares via a court-approved scheme of arrangement.
De Grey Mining shareholders will receive 0.119 new Northern Star shares for each De Grey share held.
News of the deal sent De Grey Mining shares rocketing 29.61% to a 17-year high of $1.99 per share, while the Northern Star share price fell 5.25%.
What did Northern Star management say?
Northern Star managing director Stuart Tonkin said:
Our continued focus on operational performance, cost control and capital discipline position us well for significant growth in free cash flow generation, complemented by a high gold price environment.
We remain on track to achieve our full year production and cost guidance.
Tonkin added that if the De Grey Mining takeover proceeded, he expected De Grey's flagship development project, Hemi, in Western Australia, to provide an additional tier-1 future low-cost production centre.
He said this "fully aligned with our strategy to deliver superior shareholder returns".
What's next for Northern Star Resources?
Northern Star said it achieved a record first-half level of net mine cash flow in 1H FY25 due to a strong operational performance and high gold prices.
The company said it was on track to achieve its FY25 guidance.
It continues to expect between 1,650 koz and 1,800 koz of gold sales at an AISC of A$1,850/oz to 2,100/oz.
The FY25 growth capital guidance remains between A$950 million and $1,020 million plus KCGM Mill Expansion capex of between A$500 million and $530 million.
FY25 exploration guidance remains at A$180 million.
The A$300 million on-market share buyback program continues with A$43 million remaining.
Northern Star has repurchased 24.8 million shares at an average price of A$10.38 for a total cost of A$257 million to date. The miner bought back 5.3 million Northern Star shares during the December quarter.
Northern Star share price snapshot
The Northern Star share price has risen by 34% over five years compared to an 18% lift for the ASX 200.
