Northern Star Resources Ltd.'s late 2018 acquisition of the Pogo gold mine in Alaska's Goodpaster Mining District was celebrated as both good news for the future of the underground gold mine and the rapidly expanding Down Under mining company's first major asset outside of Australia.

"While the Pogo operation is currently our only asset in North America, it is a very good one to have," said Luke Creagh, Northern Star Resources' chief operating officer of the Pogo Mine and Yandal operation in Australia.

Realizing Pogo's full potential, however, was beleaguered by a rash of COVID cases that swept through the camp at the remote Alaska mine during 2020.

Despite the coronavirus setbacks at this mine half a world away from corporate headquarters, Creagh said Pogo continued to be cashflow-positive after funding its own exploration and growth capital. An accomplishment he is quick to attribute to the Alaskans working at and supporting the mine.

"I would like to extend a massive thank you and recognize the efforts of our workforce and business partners over in Alaska," he said during Northern Star's Investor Day presentation on July 22. "Like so many others around the world, they worked diligently and responsibly through the coronavirus pandemic to continue operations and have set Pogo up for continued success going forward."

The Pogo operations COO said this diligence resulted in Northern Star's Alaska asset producing 209,647 oz of gold during the Australian company's fiscal year 2021, which ended on June 30.

He is particularly encouraged by Pogo's strong finish to Northern Star's fiscal year.

Roughly 240,000 metric tons of ore averaging 9.1 grams per metric ton gold was mined and processed at Pogo last quarter, both records for the mine. As a result, Pogo produced 60,968 oz of gold, the highest quarterly output since Northern Star acquired the operation.

At this pace, the Alaska mine would easily meet Northern Star's higher gold production guidance for FY 2022, as the Australian company continues to increase production and drive down costs over the coming two years.

Northern Star forecasts Pogo will produce 220,000 to 250,000 oz of gold at all-in sustaining costs of around US$1,300 per oz of gold during fiscal year 2022, which got underway on July 1.

To spur these improved production metrics, Northern Star is investing roughly US$55 million in growth capital to increase the mill processing capacity at Pogo, which is scheduled for completion by September; accelerate underground development to access more ore to feed into the higher capacity mill; and improve both surface and underground infrastructure to support the company's growth vision for the mine.

These improvements also set Pogo up to produce 300,000 oz in FY23.

Shane Lasley

With a mill expansion anticipated to be completed by September, Northern Star's Pogo Mine is expected to produce upwards of 250,000 oz of gold over the next year and 300,000 oz in the year to follow.

As of the end of March, Pogo hosted 12.86 million metric tons of indicated resource averaging 9.5 grams per metric ton (3.95 million oz) gold, plus 10.03 million metric tons of inferred resource averaging 9.1 g/t (2.95 million oz) gold.

Of these resources, 5.85 million metric tons 8 g/t (1.5 million oz) gold has been elevated to reserve status.

Author Bio

Shane Lasley, Publisher

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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