Pogo bounces back with strong quarter
Alaska gold mine excels in nearly every metric, including cash North of 60 Mining News – July 21, 2023
Last updated 7/20/2023 at 1:40pm
Northern Star Resources Ltd. July 19 reported that its Pogo Mine in Alaska produced 81,322 ounces of gold during the second quarter of calendar year 2023, the highest quarterly output in recent years.
"Pogo delivered an exceptional June quarter with gold sales of 80,000 ounces, representing an annualized production rate in excess of 300,000 ounces per annum," Northern Star Resources Managing Director and CEO Stuart Tonkin said during a call with investors and analysts. "Pleasingly, the uplift was through consistent monthly performance across mining and milling metrics."
After the 2022 expansion of the mill to a nameplate capacity of 1.3 million metric tons per year, Northern Star has been working to ramp up gold output at Pogo. After hitting a high of 58,661 oz of gold during the final three months of 2022, production dropped to 49,779 oz during the first quarter of this year due to a damaged motor that put the mill out of commission for three weeks.
The Pogo Mine team, however, bounced back from this setback to post new highs on nearly every metric during the quarter that ended on June 30.
This includes averaging 1,700 meters of underground development per month, which surpassed the at least 1,500-meter-per-month target set by the company.
This ensured plenty of feed for the mill, which processed 347,524 metric tons of ore averaging 7.7 grams per metric ton gold. This puts the mill throughput higher than nameplate capacity and the grades are 5% higher than the previous quarter, continuing a steady rise as more stope ore and less development material is fed through the mill.
"It is very pleasing to celebrate these milestones with the Pogo team, and I thank them for the efforts to date to demonstrate the exceptional quality of this long-life asset," said Tonkin.
With Pogo hosting 5.9 million metric tons of reserves averaging 8.6 g/t (1.62 million oz) gold, there remains room to improve the mill feed grade with increased stope material.
Including the reserves, the Alaska operation hosts a total of 21.2 million metric tons of resources averaging 10.8 g/t (7.36 million oz) gold.
"I believe we will start to see the market assign greater value to Pogo given its performance and significant resource and exploration upside," the Northern Star CEO added.
As a result of the across-the-board improved mining metrics, Pogo generated record cash for Northern Star since the company bought the Alaska asset in 2018.
"Pleasingly, Pogo's strong quarterly performance contributed over A$70 million (US$47.4 million) in net mine cash flow, the highest contribution since acquisition, reflecting the delivery of the Pogo team's optimization plans at the asset," said Northern Star Resources CFO Ryan Gurner.
Overall, Pogo produced 272,957 oz of gold from 1.23 million metric tons of ore averaging 6.9 g/t gold during Northern Star's fiscal year 2023, which ended on June 30.