Northern Star Resources Ltd (ASX:NST) shares rose as much as 3% to $22.77 after the large-cap gold miner announced a $500 million on-market share buy-back.
The buy-back is scheduled to begin on or about April 23 and will be completed within 12 months.
Managing director Stuart Tonkin said the initiative was an efficient way to return capital to shareholders while also being immediately earnings and value accretive.
“We believe current share prices do not fully reflect the quality and future potential of our assets,” he said.
Northern Star said the buy-back reflected its confidence in the business, pointing in particular to the expected structural uplift in cash generation from the recent Kalgoorlie Consolidated Gold Mines mill expansion.
The company said the buy-back would not affect its dividend policy, which remains a payout of between 20% and 30% of cash earnings.
Northern Star shares have been under pressure in recent weeks after significant operational challenges led to a fourth guidance downgrade last month.
The stock was last trading at $22.10 around midday today.