The mining newspaper for Alaska and Canada's North
The mining newspaper for Alaska and Canada's North
Gold output, costs improved but lagging behind expectations North of 60 Mining News – April 29, 2022
Northern Star mined 258,567 metric tons of ore averaging 8.3 g/t gold at its Pogo mine during the first quarter of 2022.
With a recently completed upgrade, the mill at Northern Star Resources' Pogo gold mine in Alaska has the capacity to process 1.3 million metric tons of ore per year.
Northern Star Resources Ltd. April 27 reported that while gold production is increasing and costs are coming down at Pogo, the Australian company's Alaska gold mine continues to underperform expectations on both fronts.
During the first three months of 2022, Pogo produced 57,489 ounces of gold from 260,508 metric tons of ore averaging 8.2 grams per metric ton gold. This is roughly a 15% increase in gold output from the previous quarter due to a slight increase in both the tons of ore processed through the mill and the grade of that ore.
The all-in sustaining cost per oz of Pogo gold sold during the March quarter was US$1,483, which is a 15% improvement from the US$1,735/oz of gold sold during the final three months of 2022.
"As foreshadowed, higher mining inventory at Pogo is delivering a better milling outcome but we have more work to do to deliver on Pogo's potential," said Northern Star Managing Director Stuart Tonkin.
He said the best way to drive down the per-ounce cost at Pogo is to increase the ounces produced.
"Given the need to accelerate mine productivity to optimise its future cost profile, Pogo will temporarily incur an elevated cost structure," the company penned in its quarterly report.
Late last year, Northern Star completed a major expansion at Pogo that included increasing the mill throughput capacity to 1.3 million metric tons per year; accelerating underground development to access more ore to feed into the higher capacity mill; and improving both surface and underground infrastructure to support the company's growth vision for the mine.
While the company says the recently expanded processing plant at Pogo is operating effectively and consistently, work is currently being carried out to further optimize gold recovery, which was at 82% during the quarter.
Northern Star continues to focus on increasing the quantity of ore available to process through the mill, which only ran at about 80% of the newly expanded capacity during the March quarter. Tonkin said Pogo is positioned to have enough ore to have the mill running at full capacity during FY2023, which begins on July 1.
"We are working hard to overinvest and get the development in place and the stopes online to be able to deliver the 1.3 million tons in FY23, which ultimately delivers the 300,000 ounces," the Northern Star executive told analysts and investors on April 27.
Once the mill is fully optimized and running at full capacity, it is anticipated that Pogo will produce somewhere around 300,000 oz of gold per year, or 75,000 oz a quarter.
Pogo gold output is expected to top 60,000 oz during the current quarter. Northern Star, however, says that the Alaska operation's gold production will be lower and costs higher than previously forecast for the company's fiscal year, which ends on June 30.
In its updated guidance, Northern Star anticipates Pogo to produce 205,000 to 220,000 oz of gold at an all-in sustaining cost of US$1,570 to US$1,625/oz during FY2022.
Through the first nine months of FY2022, the Alaska operation produced 144,879 oz of gold.
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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