Northern Star flags $43m Pogo spend

Northern Star Resources will outlay $43 million to expand the capacity of its Pogo gold mine in Alaska by 30 per cent.

The Bill Beament-led miner will start work on the expansion this financial year with completion anticipated for early in the 2021 calendar year.

The expansion is set to increase Pogo's annual throughput capacity from 1 million tonnes to 1.3mt.

Northern Star told the ASX today that the decision to expand was taken after mining rates increased following a change in mining method, implementation of a new mining fleet and the upgrading of Pogo's resources and reserves.

Mr Beament said the decision to invest more in Pogo reflected the company’s confidence that it was a world-class asset.

"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," he said.

"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."

In July, Northern Star's full-year results revealed that profit declined by 20 per cent, which it said was primarily due to a $50 million investment in the Pogo gold mine.

Mr Beament told a teleconference following the release of its full-year results that this financial year the company would reap the rewards from exploration push and investment in a new mining fleet at Pogo in FY2019.

“When we bought the mine (in September 2018) the spot gold price was $1,650 an ounce, it is now $2,250 an ounce,” Mr Beament said at the time.

“The investments of our acquisition strategy will flow through this year.”

Shares in Northern Star were up 3.8 per cent to trade at $10.78 each at 12.15pm AEST.