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COVID-19 protocols limit Pogo gold output

Gold production less than expected but increases continue North of 60 Mining News – May 1, 2020

Series: COVID-19 coverage | Story 37

Northern Star Resources Ltd. April 28 reported that its Pogo Mine in Alaska produced 49,340 ounces of gold during the first three months of 2020. While this is a 3,194 oz increase over the prior quarter, it is less than the Australia-based mining company expected.

The lower than expected gold production at Pogo is due largely on the company's implementation of the COVID-19 operating protocols at the mine, which affected labor availability and underground productivity.

Northern Star, however, considers these measures essential to ensuring Pogo performed as well as possible in the short-to-medium term and is able to stay operational for the longer term.

The Australian gold miner had measures in place to prevent the spread of disease at Pogo before the novel coronavirus outbreak and enforced elevated hygiene and strict social distancing protocols early on during the COVID-19 pandemic.

"Our business continuity plans have been fully mobilized in response to the COVID-19 global pandemic," Northern Star Resources Executive Chairman Bill Beament said on March 26. "We are working closely with our local communities, indigenous peoples, state and federal governments and health experts to protect our workforce, local suppliers, service providers, and nearby communities."

Even with the rapid response by Northern Star and the protocols put into place, there have been six confirmed cases of COVID-19 at Pogo, all of whom have recovered.

Due to COVID-19 and related travel restrictions creating a shortage of specialist crews, development meters at Pogo were significantly reduced during the quarter.

As a result, development ore and stope tonnage, and therefore gold production, were considerably lower than expected.

Diamond drill rigs fell from eleven to three, impacting on geological information for operational activities.

Despite the impact of the COVID-19 measures, however, Northern Star said the underlying operational transition at Pogo continues to progress.

The 56,571 oz of gold produced at Pogo during the quarter ending March 31 was recovered from 213,021 metric tons of ore averaging 8.3 grams per metric ton gold. While the tonnage milled was slightly lower than the previous quarter, the ore grades are 21% higher than the 7.4 g/t gold during the three months ending Dec. 31.

Also, stope ore tonnage as a percentage of total ore processed rose to 68%.

All-in sustaining costs per oz of gold produced at Pogo also fell a further 10% from the December quarter to US$1,254/oz. Northern Star expects cost reductions to continue into the June quarter due to a forecasted increase in gold production and significant procurement savings due to take effect.

Investment in critical infrastructure to reduce operational bottlenecks, such as processing, pumping, ventilation and electrical upgrades, are continuing this quarter. Even after allowing for this significant investment, Pogo is now generating free cashflow and further improvements are expected moving forward

"There is ongoing underlying progress at Pogo, with production and free cashflow increasing, costs coming down and significant procurement savings expected in the current quarter," Beament said.

CORRECTION: This article previously stated that the March quarter production at Pobo was 56,571 oz of gold. This figure was the total gold mined. At a recovery rate of 89%, the operation produced 49,340 oz during the quarter. North of 60 Mining News applogizes for the error.

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Shane Lasley, Publisher

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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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