Shares in Australia's Northern Star Resources (ASX: NST) jumped Tuesday after it said that drilling results from its Pogo gold mine in Alaska pointed to a significant increase in resources and a substantial maiden reserve.
The A$35 million ($25m) exploration and concentrated infill drilling campaign, using four underground and four surface rigs, has increased the existing JORC-compliant resource of 4.15 million ounces, at 14.7 grams of gold per tonne.
Pogo, located southeast of Alaska’s Fairbanks city, is currently the eight largest gold mine in the US.
The gold miner, which bought Pogo from Sumitomo Mining and Sumitomo Corporation in August last year, said the “exceptional exploration results” had outperformed expectations from its own due diligence at the time of acquisition.
Northern Star also said it had mined 59,219 ounces of gold at the underground operation in the last quarter of 2018, selling 57,534 ounces at an all-in sustaining cost (AISC) of $1,681 per ounce.
Northern Star maintained its 2019 financial year production guidance of 850,000-900,000 ounces in spite of a rising AISC from the investment in Pogo and the mining of lower-grade ore at its Kalgoorlie operations.
Pogo is the firm’s first asset outside Australia and the eight largest gold mine in the US. Located in the upper Goodpaster River Valley, about 38 miles (61 km) northeast of Delta Junction in southeastern Alaska, the mine has been commercially active since 2006, producing over 3 million ounces of gold to date.
The company’s stock closed Tuesday in Sydney 1.82% higher at A$8.97 on the news.
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