Last year shareholders received total dividends of 53.6 cents, and Northern Star’s presentation suggested total dividends this year could be 64.7 cents per share.
Northern Star sold 480,431 ounces of gold at an average price of $2,386 per ounce. Northern Star is poised to merge with another large gold miner, Saracen, at the end of this week.
“After the Saracen merger is implemented on 12 February, our combined operations have a clear pathway to an annual production rate of 2 million ounces,” executive chair Bill Beament told shareholders in a statement to the market.
“This growth will be driven by organic sources and incur one of the lowest capital intensities in the industry, ensuring that it is not just strong growth but is also financially-rewarding growth.″
Northern Star’s operations in Australia and Alaska are expected to produce up to 1.6 million ounces of gold in 2020-21 while Saracen’s operations will produce up to 640,000 ounces.
Prices for the precious metal and safehaven got as high as $2,850 in August 2020, but were last at $2,376 per ounce.
Shares were up 4.1 per cent this morning at $12.38. The company’s stock is still 2.4 per cent down for 2021 so far, having gained 13 per cent last year.
According to shortman.com.au, Northern Star is one of the most shorted stocks on the ASX. As of this morning, 10.9 per cent of the company’s shares were shorted, behind only Webjet and Tassal.
RBC Capital Markets mining analyst Paul Kaner said Northern Star’s result and dividend was slightly better than expected thanks to gold price tailwinds.
“We remain constructive on Northern Star as we anticipate the new MergeCo will continue to gather momentum on evidential improvements across the asset portfolio and as further synergies become more apparent,” Mr Kaner wrote in a note to clients.
“The recent merger with Saracen adds further news flow in the coming quarters as integration plans, optimisation plans and exploration results provide upcoming catalysts.”
Read More: Markets Live, Wednesday 10 February, 2021