North of 60 Mining News - The mining newspaper for Alaska and Canada's North

Challenged by a spike of COVID cases in Alaska and unplanned downtime due to a failure of the primary conveyor that delivers ore to the mill, Northern Star Resources Ltd.'s Pogo Mine in Alaska produced less gold at higher costs during the first quarter of the Australian miner's fiscal year 2022, which began on July 1.

These hurdles came at a time when crews were commissioning mill upgrades that will expand production rates to 1.3 million metric tons per year, which is a 30% increase over the current 1-million-metric-ton-per-year capacity.

"We seized the chance to complete other major works, including replacing the primary conveyor belt that transports ore from underground to the processing plant," said Northern Star Resources Managing Director Stuart Tonkin. "This resulted in 24 days total downtime, which reduced throughput and gold production, in turn increasing costs per ounce."

The Pogo Mine produced 40,127 ounces of gold during the quarter that ended on Sept. 30, a significant drop from the 60,968 oz of gold produced during the previous quarter.

As a result, the all-in sustaining cost per oz of Pogo gold sold during the September quarter was US$1,751, compared to US$1,347/oz during the July quarter.

In addition to nearly one month of downtime, Northern Star says the average grade of ore processed during the September quarter was 7.1 grams per metric ton gold, significantly less than the 9.1 g/t gold processed during the previous quarter and the average reserve grades at the underground operation.

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 averaging 8 g/t (1.5 million oz) gold has been elevated to reserve status.

The lower-than-reserve grades processed during the September quarter are likely related to underground mining during the mill downtime that prioritized waste development with the focus on accelerating access to additional mining fronts. These additional fronts will make it easier for mining to keep pace with the expanded mill capacity.

Now, with the upgrades complete and conveyor repaired, Northern Star expects Pogo gold output to trend higher and costs to trend lower moving forward.

Shane Lasley

Northern Star has completed upgrades that increase mill throughput at Pogo to 1.3 million metric tons per year, a 30% increase over the previous capacity.

"This work is now finished and we expect to see a significant benefit for both production and costs from the December quarter onwards," said Tonkin.

In its guidance published in July, 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.

Despite the slow start, the Australia-based gold miner has not adjusted this gold production outlook.

Once the expanded and upgraded mill is running at full capacity, Northern Star expects Pogo to produce around 300,000 oz of gold per year, or about 75,000 oz per quarter.

The company says mill throughput is increasing in line with expectations and mill availability has returned to normal levels exceeding 90%.

"I extend my thanks to the Pogo team who continue to manage the associated impacts of COVID, whilst adjusting to the challenges to make the growth plan," said Tonkin.

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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