Northern Star Resources (NST) has announced the acquisition of the Pogo Gold Mine in Alaska from Sumitomo Metals Mining Co., Ltd (Sumitomo) for US$260m (A$347m). Pogo has a non-JORC Resource of 4.1Moz @ 12.2g/t Au and a Reserve of 760koz at 11.9g/t Au. The acquisition will be funded 50/50 from existing cash and via a fully underwritten A$175m placement to institutional investors at an issue price of A$6.70ps. Pogo is forecast to produce 250-260koz Au in FY19 at an all-in sustaining cost (AISC) of A$1,175/oz). Pogo is a quality acquisition and we see value upside in not only mine life extension, but the application of NST’s rigorous cost template and aggressive investment in exploration. Importantly, NST is maintaining a significant cash balance post-deal suggesting further M&A could be in the pipeline short term. HOLD maintained and target price of $6.77ps.
is still trading on undemanding multiples and we maintain our BUY call.
To access our Northern Star Resources report please log in under the Client Area Log In at the bottom of this page.
Argonaut’s Client Area allows you to view delayed share prices, access Argonaut’s wealth of Research as well as create custom portfolios and set up company watch lists.
If you would like to access our research please contact us to create an account.
+61 8 9224 6888
+852 3557 4888