Scoping study shows Hermes deposit can help Northern Star achieve production target

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Image credit: Northern Star Resources The Hermes deposit is located 60km south-west of the Plutonic mine. The above long section shows the illustrated stage one pit outline. The deposit remains open in several directions with several ore grade intercepts highlighting the potential for underground mining.

Northern Star Resources announced that a scoping study has found that its recently acquired Hermes deposit at the Plutonic mine holds the potential to fulfil the company’s aspirations to become 700,000 ounce-a-year gold producer.

The Hermes deposit is located 60km south-west of the Plutonic mine. The above long section shows the illustrated stage one pit outline. The deposit remains open in several directions with several ore grade intercepts highlighting the potential for underground mining.
Image credit: Northern Star Resources

“The study concluded that stage one mining at Hermes, which is located 60 kilometres south-west of Plutonic in WA, would produce a total of 86,000 ounces over two to three-year life at an all-in sustaining cost (AISC) of A$1,095/oz. the capital cost to bring Hermes into production is estimated to be A$10 million,” the company said in a statement to the ASX.

“This is forecast to help increase Plutonic’s annual production from 75,000oz-80,000oz per annum this financial year to 100,000oz per annum in FY17 and beyond.”

Northern Star acquired Hermes from Alchemy Resources earlier this year for A$1.5 million. The company is planning to start mining operations at three pits in the middle of 2016, with the ore being trucked to Plutonic via a direct haulage route.

Adertisement

“The increased production at Plutonic is part of Northern Star’s strategy to grow production to 700,000 ounces per annum in 2018, up from this financial year’s forecast production of 535,000 to 570,000 ounces at an AISC of A$1,050-A$1,100/oz,” reads the statement.

Northern Star has intersected high grade mineralisation across four new mining fronts at Plutonic. Further work will be conducted at the Baltic Extension Zone. Image credit: Northern Star Resources
Northern Star has intersected high grade mineralisation across four new mining fronts at Plutonic. Further work will be conducted at the Baltic Extension Zone.
Image credit: Northern Star Resources

“This production growth will come entirely from organic sources, with increased output also forecast for the Company’s Kalgoorile operations and the start of mining at the Central Tanami Project in the Northern Territory.”

Northern Star has invested significantly in exploration and development at Plutonic as part of its strategy to move away from remnant mining and into new resource areas. This program has led to the development of four new areas – Caribbean, Pacific East, Indian and Caspian – now being well advanced.

The company is also assessing the viability of extending mining to the high-grade Baltic Extended zone, which is a potential underground base-load feed source for the processing facility over a number of years.

Northern Star Managing Director Bill Beament said the Company’s strategy to rebuild Plutonic was already paying dividends.

“We bought Plutonic because we were confident there was a lot more gold to be found. The results of our exploration and development strategy show we were right,” Mr Beament said.

“We have made the investment in identifying and developing these new areas, which will enable us to move away from remnant mining into genuinely new areas of mineralisation. Much of this upfront expenditure is now done and we are starting to see the benefits of the increased grades and lower costs which are at the heart of this strategy.”