With a final repayment on the $15 million bank loan it used to help acquire the Paulsens gold mine in Western Australia, Northern Star Resources (ASX: NST) is now completely debt-free.
Which in itself is an achievement after it paid Intrepid Mines (ASX: IAU) $40 million for Paulsens Mine not so long ago.
It can now aggressively explore at Paulsens and to consider other growth opportunities.
This no-hedging policy leaves the company ideally positioned to capitalise on the strong gold price, currently at US$1,374 per ounce.
Paulsens produced a record 30,602 ounces in the September quarter, generating revenue of $40.5 million.
The Stage One mine plan, which underpinned Northern Star's decision to pay Intrepid Mines $40 million for Paulsens, ran until early 2011 and provided for production of 51,000oz from the Voyager One lode. This was quickly expanded by NST to 65,000oz.
Further drilling and subsequent exploration success has since led to the establishment of a Stage Two mine plan within the Voyager 1 resource, which will see the project continue beyond 2011. Diamond drilling is currently underway to further extend Stage Two.
Diamond drilling is also underway to establish the existence of the Voyager Two lode in which a discovery hole hit 2m at 40.5gpt. The lode has the potential to further increase mine life and production at Paulsens significantly.
More drilling results on stage two and stage three expansions are due over the coming weeks.
Article highlight
Debt free after three months and unhedged allows Northern Star to tap record high gold prices and generate more net cash flow. In turn, NST can put more dollars into exploration and extending mine life at Paulsens and, look at other opportunities.