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“What Northern Star was seeking to achieve was absolutely geology to achieve a step-change on operations and at KGGM the target will be to drop mining costs by $7 a tonne.”
Chief operating Officer
Northern Star Resources
Kalgoorlie’s Super Pit mine, the biggest gold mine in Australia, is set to gain a higher world ranking. Chief operating officer for Northern Star Simon Jessop said pit and potential future underground mining at the company’s Kalgoorlie Consolidated Gold Mines (KGCM) is to undergo a $1.5 billion mill expansion, taking capacity from 13 million tonnes per annum to 27mtpa. This would take annualised production capacity by 2029 to 900,000 ounces and would see the Super Pit ranked in the ten largest gold operations in the world.
Jessop told Diggers & Dealers Forum that this was one step towards the company achieving group production of 2moz by next year. Apart from the Super Pit and the Mt Charlotte mine on the eastern side of Kalgoorlie’s township, Northern Star’s principal holdings are at the Yandal mining centre in WA’s northern eastern goldfields and the Pogo operation in Alaska.
Northern Star last fiscal year sold 1.56 Moz and has group resources totalling 57.4m oz resources and 20.2m oz reserves. Like other companies Northern Star sees a lack of skilled people in the Australian industry as an issue, and last year took on 225 trainees, including 105 graduates.
In a pre-conference presentation, Northern Star said at some time in the future there will be a transition to resuming underground mining on Kalgoorlie’s Golden Mile, where the series of original vertical shafts were enveloped by the current massive pit.
The lode systems trend deeper to the south and the deepest of the original shafts, Chaffers, on the southern end, went to an internal shaft depth of 4,400 feet but the lower reaches were under water due to mining operations receding in the 1970s. At the time this was not helped by the abolition of a federal gold subsidy that propped up Australian gold mines, as the perception was that the then nickel book would be the new prop for the goldfields. The gold price around that time was as low as $US33/ounce.
In the past 130 years the Golden Mile operations have produced about 65m oz of gold.
Jessop said gold sales last fiscal year were valued at $4.1bn and cash earnings were $1.2bn while net cash was $362m and returns to shareholders included $60m in dividends and share buyback.
At Yandal’s Thunderbox mine a plant expansion is already paying dividends. In Northern Star’s decarbonization quest it is setting a renewable energy complex at the Jundee operation.
Yandal operations now has 9.7m oz in resources and 3.8m oz reserves and in the past 30 years has produced about 14m oz. Pogo exceeded expectations last quarter with 80,000 oz and is on the way to 300,000 oz pa. It has 7.3m in resources and mining grades around 10.9 grams/tonne Latest drilling near the mine has produced positive results.
Jessop said, “What Northern Star was seeking to achieve was absolutely geology to achieve a step-change on operations and at KGGM the target will be to drop mining costs by $7 a tonne.”
The exploration team on all operations has been finding gold for $31/oz.