Northern Star Resources says US mine resilient to Trump tariffs as cash earnings soar in first half

A roaring gold price and strong greenback will insulate Northern Star Resources’ isolated Pogo gold mine in Alaska from any tricky tariffs Donald Trump’s administration might inflict, says chief executive Stuart Tonkin. Now a month into the president’s second term, the boss of the Subiaco-based gold giant told analysts on Thursday there were no immediate concerns but he was “very alert to policies” that could impact the business. “It’s fluid, let’s put it that way,” Mr Tonkin said. “We’ve already had experience (with) a version one of this, and we endured through that.” Northern Star bought Pogo — 50km from the sparsely populated town of Delta Junction in the far north-west US state — in 2018. The asset contributed $466.7 million in revenue over the half year to the end of December for Northern Star, and 130,228 ounces of gold out of the group’s total of just over 800,000oz. In terms of materials and supplies, Mr Tonkin said freight costs alone to get equipment to the remote operation were expensive and already well-factored in for the accounts. And its strong performance amid record-high gold prices and earnings collected in US dollars meant Pogo would be financially resilient to any potential imposts. “We might not like it, but it will be able to manage those structural changes that could potentially be imposed over coming years,” he said. “It’s insulated given it’s got a US cost base, US revenue line and a general higher cost of getting stuff to Alaska in the first instance ... Pogo’s not fragile.” Speaking more on the US, he said the miner wouldn’t be swayed on making changes to its diversity, equity and inclusion policies following rollbacks on commitments from some global companies. Northern Star’s board has a target of making sure at least 30 per cent of directors are women but — unlike BHP and Rio Tinto — does not have set targets for the rest of the business. The CEO said the company was instead focused on fostering “inclusion”. “I’ve never worked from ‘pick a number and try and drive to it’, because you can get different outcomes,” Mr Tonkin said. “I don’t see us pivoting or changing related to other global views. It works in our company.” The Super Pit owner will pay out a record interim dividend after booking a massive spike in cash earnings for the first half. Cash earnings for the six months to the end of December were up 63 per cent on the same period the previous year to $1.15 billion. It sold 804,000oz of the precious metal at all-in costs of $2105/oz, delivering underlying earnings before interest, tax, depreciation and amortisation of $1.4b — up 58 per cent on a year earlier thanks to higher gold sales and realised prices as gold broke into new territory on safe haven demand. Revenue for the half rose 28 per cent to $2.9b and net profit was up 55 per cent to $506.4 million. Northern Star will share the bounty with shareholders and return an unfranked dividend of 25¢ a share — up 10¢ from the same time a year ago. Mr Tonkin said the company had reported record underlying earnings for a second-straight period, which underscored the value of the growth strategy it started four years ago. “We remain well positioned to achieve our FY25 production and cost guidance while retaining a firm focus on progressing our key growth plans, including the KCGM mill expansion project, which remains on time and within budget,” he said. “We continue to pursue exploration success at existing operations, while advancing our recommended offer to acquire De Grey Mining.” Northern Star is targeting gold sales across its operations — which also includes its Yandal hub in the Goldfields and Pogo in Alaska — of between 1.65 million ounces and 1.8moz at all-in costs of between $1850/oz and $2100/oz. It attributed a rise in costs in the first half to higher mining and processing costs, along with a jump in royalties as gold rallied to record highs. The miner is set to double the processing capacity at the Super Pit’s famed Fimiston mill by 2029 to 27mtpa and push annual output to 1.1moz. In December it lobbed a $5b all-scrip bid for WA’s De Grey Mining — believed to be a global record for a gold company without a mine in production. Securing the deal will win it the giant Hemi deposit in the Pilbara. Northern Star shares were up 0.82 per cent to $18.45 at 12pm AWST.