Northern Star Resources (ASX: NST) has announced its plan to invest US$30M to grow the production rate of the processing plant at its Pogo gold mine in Alaska by 30%.
The company reported that it will invest US$30 million (A$43M) to increase the annual throughput capacity of the processing plant from 1 million tonnes to 1.3 million tonnes.
NST said that the work on the expansion is expected to be completed in early CY2021, with US$10M to be invested this financial year, and the remaining US$20M in FY2021.
It may be noted that the US$30 million investment is in addition to Northern Star’s current capital expenditure budgets.
The company said that the expansion decision was taken in light of increased mining rates following change in mining method, implementation of the new mining fleet, and the upgrading of Pogo’s Resources and Reserves.
NST reported that the new discovery at Goodpaster immediately along strike from the Pogo mining area demonstrates the camp scale potential of the district.
Some of the significant Goodpaster exploration drilling results include 4.0m at 67.5gpt; 5.2m at 15.7gpt; 0.6m at 100.1gpt; 5.2m at 9.5gpt incl. 2.4m at 18.1gpt; and 1.3m at 27.5gpt.
NST’s Pogo Operation is located 145 kilometres (220 kilometres by road) southeast of Fairbanks, Alaska and is situated in the Tintina Gold Province. The operation, which commenced production in 2006, controls some 17,080ha of mining and exploration leases.
The Pogo Processing circuit involves gravity concentration, gold and sulphide flotation, and leaching and adsorption of gold with a leach/carbon-in-pulp (CIP) unit operation. The process plant has an original design, hard rock processing capacity of in excess of 0.8M tonnes per annum.
30% production expansion at Pogo
Northern Star Resources reported that it would invest US$30 million (A$43M) in an expansion of the processing plant at Pogo gold mine.
Under the expansion plan, the annual throughput capacity of the Pogo plant will be increased from one million tonnes to 1.3 million tonnes, an increase of 30%.
The company said that the work on the expansion will start this financial year and is expected to be completed in early CY2021.
Northern Star reported that it expects to invest US$10M in the expansion project this financial year, with the remaining US$20M to be invested in FY2021.
It may be noted that the US$30 million investment is in addition to Northern Star’s current capital expenditure budgets and will be funded from ongoing cashflow.
Northern Star reported that the decision to increase Pogo’s production rate reflected the significant confidence the Company has in this world-class asset.
NST said that its confidence in the outlook for Pogo was also underpinned by the strong exploration results being generated from the new discovery in the Goodpaster prospect located just 1km from the existing mining areas.
The Goodpaster prospect is considered the continuation of the main Pogo mineralised trend across a major NE trending fault system broadly coincident with the Goodpaster River valley.
The prospect was initially intersected in late 2017, the discovery hole 17-041 assayed 4.0m (tw) at 64.5gpt. The initial drilling is focussed approximately 1km west of the recently announced Central Veins discovery area adjacent to the existing Pogo production areas.
Since acquisition, Northern Star has rapidly advanced exploration drilling in the initial Goodpaster area with mineralised intersections now known to extend over a strike distance of 2.3km, to a depth of 500m and remains open in every direction.
Strong explorations results at Goodpaster
The company reported that the key drilling results from Northern Star’s recent drilling at Goodpaster prospect support Northern Star’s view that Goodpaster hosts extensive mineralisation in part of a large stacked vein system with many similar geological characteristics to the Pogo deposit.
Significant intersections include 2.1m at 44.5gpt; 2.2m at 28.1gpt; 0.6m at 100.1gpt; 0.3m at 129.0gpt; 1.3m at 27.5gpt and 1.8m at 13.2gpt; 5.2m at 15.7gpt; 8.1m at 5.0gpt; 0.3m at 170.2gpt; 5.2m at 9.5gpt incl. 2.4m at 18.1gpt; and 1.7m at 19.4gpt.
The company reported that surface drilling on the Goodpaster vein system is continuing with four diamond drill rigs in operation from road and helipad positions across the site road with a large number of assay results still pending for the current program.
NST said that in conjunction with the Central Veins discovery, permitting has been established to allow the development of initial underground access into the Central Veins and potentially the Goodpaster area for further exploration and pre-development activities.
Northern Star Executive Chairman Bill Beament said: “The extensive changes we have implemented and our ongoing optimisation program, including the introduction of long-hole stoping and the use of bigger, more efficient mobile mining equipment, have been highly successful.
We now know that Pogo in the future can comfortably sustain a mining rate of 1.3 million tonnes a year. The progress we are making and the visibility we now have, shows that this is the optimal run-rate for Pogo in terms of sustainability and cost-effectiveness.
With this confidence in the mining operation now well-established, we will move quickly to begin expanding the plant, driving further efficiencies in the process.”
Mr Beament added: “We have owned Pogo for only a year and our exploration results already provide strong evidence that it is an emerging camp-scale system with huge potential to grow the inventory and mine life beyond the current 10Moz# endowment.
The combination of the exploration success at Goodpaster and the effectiveness of the operational changes made in the mine leaves us in no doubt that investing in the plant expansion will generate strong returns for our shareholders and local stakeholders at Pogo.”