The mining newspaper for Alaska and Canada's North
The mining newspaper for Alaska and Canada's North
Finished mill expansion bodes well for stronger production North of 60 Mining News – January 21, 2022
Northern Star has completed upgrades that increase mill throughput at its Pogo Mine in Alaska to 1.3 million metric tons per year, a 30% increase over the previous capacity.
With increased mill capacity and higher-grade ore, the Pogo operation is forecast to produce around 300,000 ounces of gold per year.
Northern Star Resources Ltd. Jan. 20 reported that Pogo gold mine in Alaska continued to underperform expectations during the fourth quarter, but there are indications that gold production will be stronger during 2022.
During the final three months of 2021, Pogo produced 49,985 ounces of gold from 213,688 metric tons of ore averaging 6.6 grams per metric ton gold. While a 25% increase over the 40,127 oz produced during the previous quarter, this is still significantly lower than the Australia-based miner's expectations for its first North American asset.
As of the end of March, Pogo hosted 12.86 million metric tons of indicated resource averaging 9.5 grams per metric ton (3.95 million oz) gold, plus 10.03 million metric tons of inferred resource averaging 9.1 g/t (2.95 million oz) gold.
Of these resources, 5.85 million metric tons averaging 8 g/t (1.5 million oz) gold has been elevated to reserve status.
The lower-than-reserve grades processed during the fourth quarter were partially due to low-grade material averaging 2.8 g/t being fed to the mill to complement the 7.3 g/t gold ore that was mined from underground.
The all-in sustaining cost per oz of Pogo gold sold during the December quarter was US$1,735, down slightly from the US$1,751/oz during the September quarter.
As a result, the operating cash flow at Pogo was US$7 million, but the net cash flow was a deficit of US$9 million after growth capital investments of US$9 million.
Though Pogo performed slightly below expectations, Northern Star completed the upgrades that expanded mill capacity at the Alaska operation to 1.3 million metric tons per year. The mill operated at a 1.2-million-metric-ton-per-annum rate during December. The increased throughput, coupled with an anticipated increase in ore grades, is expected to result in higher gold output during 2022.
For Northern Star, this increase comes in time to boost Pogo's performance midway through its fiscal year 2021, which ends on June 30.
"Pogo made solid progress with development crews achieving 1,500 meters during December and the mill operating at 1.2mtpa," said Northern Star Resources Managing Director Stuart Tonkin. "This provides confidence in Pogo's ability to deliver ounces in the second half and beyond."
As far as calendar year production goes, Pogo produced 192,574 oz of gold during 2022.
With the expanded and upgraded mill running at full capacity, Northern Star forecasts that Pogo will be able to produce around 300,000 oz of gold per year, or about 75,000 oz per quarter, moving forward.
Over his more than 16 years of covering mining and mineral exploration, Shane has become renowned for his ability to report on the sector in a way that is technically sound enough to inform industry insiders while being easy to understand by a wider audience.
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