Northern Star acquires Jundee mine

Australian gold producer Northern Star is to become the second largest gold producer behind Newcrest Mining after announcing the acquisition of Newmont Australia’s Jundee mine in Western Australia.

The acquisition of the mine will cost Northern Star (NST) A$82.5 million and will be funded out of cash reserves and an increased to its current debt facility with Investec to A$100 million. This will see NST’s output in fiscal year 2015 from 350,000 ounces to 550,000 ounces. The company expects the all-in sustaining cash cost will be approximately A$1050 an ounce – continuing the NST mantra of high grade operations with a low cost model.

That is substantially cheaper than an NCM or a KCN and the value of the transaction will de-risk the portfolio further as it provides increased operation diversification and increased economies of scale.  The Jundee mine reserves are estimated to stand at 411,000 ounces, with 508,000 ounces in recourse, which is expected to expand with further exploration.  Jundee’s all-in cash cost in 2013 was A$930 an ounce, making this a premier pick-up.

Expectations will be for the acquisition to be 2015 accretive and considering the gold price is still averaging US$1285 an ounce should see NST maintaining its record over its peers as a cash-positive, earnings growth business.

This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.

CFD’s zijn complexe instrumenten en brengen vanwege het hefboomeffect een hoog risico mee van snel oplopende verliezen. 79% van de retailbeleggers lijdt verlies op de handel in CFD’s met deze aanbieder.
Het is belangrijk dat u goed begrijpt hoe CFD's werken en dat u nagaat of u zich het hoge risico op verlies kunt permitteren.
CFD’s zijn complexe instrumenten en brengen vanwege het hefboomeffect een hoog risico mee van snel oplopende verliezen.