NST - Northern Star Resources

[sptrawler]

Scale backs are always a pain, they tie up your money, then give most of it back.

 

[finicky]

Bummer - my SPP allocation hit my account today, now I have to buy 652 shares on market to top up to my previous holding.

Raleigh suspension obviously isn't a significant issue according to the market's pricing. This company will be producing well over 1 million ozs when including a full year's contribution from the Kalgoorlie super pit and how much does Raleigh produce over at Kundana?

Raleigh is only one of 4 mines in the East Kundana Joint Venture (EKJV). My research of anything has a strict limit of 15 minutes and in that time I could not exactly unravel how much per year the EKJV, let alone one of its constituent mines (Raleigh) produces but let's say roughly 25% of ~100,000 ozs attributable to NST's 51% of the JV = 25,000 ozs p.a. All just ball park estimates. The other mines at East Kundana are unaffected as informed by this statement:
"Underground mining at other deposits at the East Kundana joint venture, which includes the Rubicon-Hornet and Pegasus mines, remains unaffected, the companies said." ABC news
And that's not to say Raleigh won't be rehabilitated after an independent assessment of risk.
Also, there's a new deposit been defined at the EKJV called Falcon which recently had a maiden resource declared in fy19.

 

[explod]

In my view this is perhaps our best Aussie gold stock and just look at it go and now at an all time high. Aussie gold price at an all time high also, up another $18 overnight so NST could get close the $15 today. Interestingly hardly a word on main street media about gold.

 

[Padowan]

20% daily swings over the last 2 trading days, crazy for an $8bn mkt cap ASX100 company

can’t say whether this is a blip on the way to the nadir or stimulus has put a floor in the mkt

At A$2466/oz NST is printing cash

 

[finicky]

.. At A$2466/oz NST is printing cash ..

And we're back above $2,500aud after last night, NST swings have been hair-raising alright but I look at Saracen (SAR) as being an apt company to compare with Northern Star and I just did a comparative 6 month chart of the two - they're almost identical over that period and still up 10-15%.

'Between the Lines Finance' on Patreon (Poster: Nordesmic) has done a brilliant analysis of the GDX and GDXJ etfs, also the leveraged NUGT (3x).
I think he said that there'll be a 'rebalancing' in holdings to occur on this coming Friday which will apply to most Australian miners in the GDXJ. They will be reduced as a percentage of holdings. I'm guessing the Oz miners are to cop it more than the North American ones because Oz miners have increased in market value more due to the high AUD gold price they enjoy for their product - thus they've risen to a bigger percentage of the indexes. NST will be worst hit as it "has got too big" to qualify for the GDXJ and it will be sold off in the after market of the ASX on Friday (3rd Friday of the last month of the Quarter). This process is signalled so clearly well ahead that some entities reduce their holdings in anticipation. So the damage might already be done price wise. I think that's what he was saying.

Additionally, since the gold miner etfs have been sold by the Insts and public in the States, along with everything else in the scare, the managers of the etfs then have been forced to trim assets (stocks) to reflect the etfs' market value.

Then there's the fact of the recent placement and SPP for both SAR and NST to fund the Kalgoorlie Super Pit acquisition. SAR raised at 2.95 and NST raised at $9.00. Both dipped below their cap raising price (as is common) on Monday and both have now bobbed back above.

I would have topped up on Northern Star when it dipped below $9 if I'd had the disposable cash.

NST and SAR Comparative 6 mths

 

[Padowan]

And we're back above $2,500aud after last night, NST swings have been hair-raising alright but I look at Saracen (SAR) as being an apt company to compare with Northern Star and I just did a comparative 6 month chart of the two - they're almost identical over that period and still up 10-15%.

'Between the Lines Finance' on Patreon (Poster: Nordesmic) has done a brilliant analysis of the GDX and GDXJ etfs, also the leveraged NUGT (3x).
I think he said that there'll be a 'rebalancing' in holdings to occur on this coming Friday which will apply to most Australian miners in the GDXJ. They will be reduced as a percentage of holdings. I'm guessing the Oz miners are to cop it more than the North American ones because Oz miners have increased in market value more due to the high AUD gold price they enjoy for their product - thus they've risen to a bigger percentage of the indexes. NST will be worst hit as it "has got too big" to qualify for the GDXJ and it will be sold off in the after market of the ASX on Friday (3rd Friday of the last month of the Quarter). This process is signalled so clearly well ahead that some entities reduce their holdings in anticipation. So the damage might already be done price wise. I think that's what he was saying.

Additionally, since the gold miner etfs have been sold by the Insts and public in the States, along with everything else in the scare, the managers of the etfs then have been forced to trim assets (stocks) to reflect the etfs' market value.

Then there's the fact of the recent placement and SPP for both SAR and NST to fund the Kalgoorlie Super Pit acquisition. SAR raised at 2.95 and NST raised at $9.00. Both dipped below their cap raising price (as is common) on Monday and both have now bobbed back above.

I would have topped up on Northern Star when it dipped below $9 if I'd had the disposable cash.

NST and SAR Comparative 6 mths
View attachment 101434

I read today that over last two weeks more than u$600m ripped from gold etf’s because of redemptions.
Because of current cv19 panic trading the usual Stockmarket indices rebalance has been delayed and the hedge funds that had positioned themselves ahead of this have been driving the volatility because of the unexpected delay, SAR probably a candidate for ASX100 post super pit deal

 

[finicky]

The Daily Reckoning thinks a few of our gold miners, including NST, might benefit from the application of a new CSIRO concept in their exploration projects ...

Posted by DR on Friday:
Unlocking Archean gold

CSIRO’s discovery relates to a new understanding of mineralisation in the Yilgarn Province in WA.

The research shows formation of ancient gold deposits during the Archean period also produces distinctive patterns of chemical alteration in the surrounding rocks.

CSIRO believes this could greatly assist exploration in the Eastern Yilgarn region.

In layman’s terms, the newly discovered patterns make it faster and more efficient for exploration companies to identify potential new deposits.

The Eastern Yilgarn region, which shares its Archean geology with the highly-endowed Eastern Goldfields, has produced fewer gold discoveries to date than would be expected.

CSIRO believe their new approach could be a more productive alternative that has potential for use globally.

Why is NST up then?

NST, along with a host of other Australian gold miners including Ramelius Resources Ltd [ASX:RMS] and Evolution Mining Ltd [ASX:EVN], sponsored the project.

Jamie Rogers, General Manager of Exploration for Northern Star, had this to say:

‘The new approaches developed from the project have challenged conventional wisdom, established new models… Northern Star sponsored the project to help fast track and ultimately benefit from the development of new mineral exploration tools and technologies.’

The research is of obvious significance to NST as their Jundee and Kalgoorlie operation are situated with the Yilgarn region (geologically known as the Archean Yilgarn Craton).

The new exploration technology could help explorers and miners within the Yilgarn Craton identify new areas with gold potential and expand their known gold systems.

There are no announcements out this morning from NST, RMS, or EVN regarding renewed exploration plans in light of CSIRO’s advancements.

 

[Trav.]

Holding NST again.

Huge volume spike on the 29/5 which is the same as EVN ( as per @finicky post above )
Looks to be a bit of sideways action between $13 - $14 so will be watching that this doesn't continue for to long.

 

[finicky]

NST @ $14.75

So very good June Quarterly from Northern Star just released.
It brings to a conclusion FY20 basic results, production which came in only 1.6% below the guidance that was withdrawn due to Kung Flu, bloody good.

Stand out for me was the Pogo mine (Alaska) comments. While not specific they say that the trend of rising production and productivity was maintained! That was achieved with 36 Covid cases among staff. They say big potential for Pogo when normal conditions return.

Cash, bullion and investments rose by 40% to A$769.5 million in the June Quarter outstripping debt of $700 million and as result the company will now pay the withheld interim dividend in July.

They are buying back hedges and accelerating delivery into hedges to increase exposure to spot prices. They are already one of the lowest hedge books as a percentage of production - just 15% of the next three years production committed.

Magoo, you've done it again.

Held
Will probably be selling down 30-40% of my holding during the July/August market melt-up.

 

[finicky]

Well, all time high in NST's price today but have to say a bit uncomfortable about the chart - too much volatility for me on monthly and daily, some indicators not confirming new peaks. Almost started my sell-down of NST today but have a nagging feeling there's more in it short term, might miss out on some 'melt-up' in this one. Will be keeping at least half my holding of NST through the crack-up, that's my current sentiment anyway. It's like free relaxation therapy having something decent in the bank. I s'pose it's not really free though - CGT obligations and opportunity cost. "Cash - a much underrated financial asset". Not advice needless to say.
Not long to wait for the full June Qtrly, this Thursday 23rd - that was just the June Qtr production update I referred to in prior post.

NST 2 Year Daily

 

[finicky]

A fantastic move, seems totally rational. A few egos must have been set aside, Finlayson (SAR) will be M.D. Will bring the merged entity into the global top 10, one of the few with all its mines in tier-1 jurisdictions and they say will make the company attractive and investible to generalist money as well as goldbugs.

 

[Trav.]

Another discretionary trade for me here as I believed NST was oversold when the POG went down. I entered 1/12 @ $12.87 so we will see if we can make a couple of bucks here as NST climbs back to $14 ( well I hope so ) with the gold price recovering

 

[finicky]

Anyone topping up in the solid goldies today? All my best advice is that the bottom is pretty c.ose to in for the miners, e.g Jordan Roy-Byrne at https://thedailygold.com/category/editorials/
He's getting a bit strident about it for him.
Anyway, I finally got back the 652 shares that I lost trying to arbitrage the last Northern Star SPP. Now back to a psychologically satisfying round figure, after starting late, topped up @ $10.89. Have been eyeing more RRL which is now lower than the price I first bought at around 5 years ago! Chart for RRL doesn't look right though. Also interested in more Dacian (DCN) if it gets lower; not that DCN can be called 'solid' yet. Most of my more speccie micro goldies have held up today.

 

[finicky]

Quite a few will be alert to the behaviour of the NST share price this week.
Due to the expansion of its market cap after mergIng with SAR, NST is no longer eligible to be part of the small goldies GDXJ and the mirror etf holding will be sold by day's end this Friday Mar 22 - I think it is over 40M shares? My advice (betweenthelinesfinance on Patreon) is that much of the selling will have been prearranged, "choreographed", and the effect of such huge disposal will be more muted than otherwise expected. A watch to possibly buy for me.

 

[finicky]

Sold my 2,000 VOC shares (VOC is subject to takeover) and tacked on 1,000 NST shares @ $9.11
Good trade I feel. Will add another 1,000 if NST gets smashed when the VanEck Vectors Junior Gold Miners Etf relieves itself of its Northern Star +40M shares around Friday, if it already hasn't done so.
Sitting on a ? when the primary bull market in gold resumes?

 

[finicky]

Think NST should be safely past any further reactions to dropping out of the GDXJ now.

A few casual chart comments:

• If you take a measured target of the 'double top' in July and October 2020 from 'neckline' @ $13, NST reached that perfectly this March.
• Since low of march NST has made a higher low and today has gapped up to a higher high.
• Massive positive daily volume on March 19, two days after the low of March 17.

The verdict isn't yet but chart certainly is making a good case for a major low to have been made (as distinct from a definite secondary low)

1 Year Daily

 

[finicky]

Kalgoorlie Super Pit - great rundown from Oct 2020, just before SAR and NST merged. Global scale Gold opportunity in Australia right in front of your eyes. It's just sitting there, ripe for the picking.




Mt Charlotte underground

 

[finicky]

NST March quarterly not flash at all, high costs, Pogo in Alaska and Kalgoorlie (ex KCGM) were barely break even. Nevertheless, I still suspect there are good years directly ahead for this miner.

Group gold sold of 368,273oz at an AISC of A$1,598/oz

Group all-in cost (AIC) of A$1,952/oz, they say after significant investment for production growth.

Underlying free cash flow totalled A$97 million. This was after investing A$127 million in growth capital and A$40 million in exploration. There were breaks in production for maintenance at KCGM and Thunderbox. Roughly a third of gold sales were delivered into hedges also impacting revenue.
There were lower head grades at Pogo due to mine plan sequencing. Kungflu drag at Pogo.

Thought I'd place here a recent interview from the increasing sagacious Marc Faber. He fearlessly lights up during the interview - wonder what he was smoking? At around 35-36 minutes he recommends gold and silver and for the more adventurous, gold miners.

 

[finicky]

NST into the S&P ASX50 - got to be good for fund and index buying.

 

[mullokintyre]

I got my NST shares courtesy of the Saracen merger/takeover.
Kinda hard to evaluate the anuual, as everything is up big time, but we are not comparing apples with figs here.
Gold prices achieved by the merged org is up 3% which may or may not have happened via the merger.
Guidance is for pretty much the same production next year.
The big returns will not be happening till after 2024 or 2025 when they expect to be a 2 mill OZ company.

In the meantime, there is some significant capex to be done to reach that target.
Not sure if its worthwhile holding till then, or get out and come back in two years time.
It is still barely above half of what it was back in October last year.

Mick