ABN: 43 092 832 892
24 Mumford Place BALCATTA WA 6021
Ph: (08) 6241 1866 Fax: (08) 6241 1811 Email: [email protected] Web: www.nsrltd.com
28 September 2010 Manager Announcements Company Announcements Office ASX Limited 20 Bridge Street Sydney NSW 2000 Dear Sir,
RESOURCES RISING STARS PRESENTATION Northern Star Resources Ltd (ASX:NST) is very pleased to release to the market today a presentation on the Paulsens Gold Mine, the exploration potential of the Company and repayment of the acquisition. The presentation includes announcements on;
1. NST has repaid 75% of the acquisition to Intrepid and $10M off the bank debt after 60 days from settlement 2. NST has received significant drill assays below the Stage 1 mine plan.
Yours faithfully, for NORTHERN STAR RESOURCES LTD
Bill Beament Managing Director
Emerging Australian Gold Producer and Explorer
Resources Rising Stars Presentation 2010
DISCLAIMERCompetent Persons Statements
The information in this announcement that relates to exploration results, data quality, geological interpretations and potential for eventual economic extraction, is based on information compiled
by or under the supervision of Brook Ekers, (Member AIG), who is a full-time employee of Northern Star Resources Ltd. Mr. Ekers has sufficient experience which is relevant to the style of
mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2004 Edition of the "Australasian Code for
Reporting of Exploration Results, Mineral Resources and Ore Reserves". Mr. Ekers consents to the inclusion in this announcement of the matters based on his information in the form and context
in which it appears.
The information in this announcement that relates to Exploration Potential and comments on the resources estimates are based on information compiled by Mr Jason Boladeras, who is
Exploration Manager for Northern Star Resources, a Member of the Australian Institute of Geoscientists and is employed by Geoarc Pty Ltd. Mr Boladeras has sufficient experience which is
relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2004 Edition of the
‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’. Mr Boladeras consents to the inclusion in the report of the matters based on his information in the
form and context in which it appears.
Forward Looking Statements
Some of the information contained in this Announcement has been obtained from third parties and has not been independently verified by NST. In particular the financial projections model on
which the forward looking statements included in this Announcement has not been prepared by the Company and the Company has not undertaken any verification of the model. The Company
takes no responsibility and is not liable for the projections in any way. Given the risks and uncertainties that may cause the Company’s actual future results, performance or achievements to be
materially different from that expected, expressed or implied by the forward looking statements included in this announcement, undue reliance should not be placed on these statements. Nothing
contained in this Announcement is a promise or representation as to the future. No assurance or representation is made by any person that any forecast or projection will be
achieved. Accordingly, investors must make their own investigations and inquiries regarding all assumptions, uncertainties and contingencies, which may affect the future operations of the
Company.”
Our Vision…
“To build a quality mining & exploration company
focused on creating profits for shareholders...”
Company Profile
CAPITAL STRUCTURE
283M shares on issue
79M options
Market Capitalisation $48M (24 September 2010)
(Undiluted & @ 17 cents per share)
Cash/Bullion at Bank $8 Million
SUBSTANTIAL SHAREHOLDERS
Top 20 52%
Top 100 78%
InvestMet Limited 50%
Board of Directors (fully diluted) 25%
Quality Management - disciplines covered
Successful record in discovering and developing mineral resources.
Bill Beament (Managing Director) Mining Engineer
Former General Manager – Operations for 12 mines across WA, including 3.5 years involvement at Paulsens overseeing mining contractor. Established over 15 new mining operations across Australia.
Christopher Rowe (Non Exec Chairman) Barrister and solicitor
Chairman or director of a number of public listed mining and oil and gas related companies
Michael Fotios (Non Exec Director) Geologist
Chairman of InvestMet Limited. Former Managing Director of Galaxy Resources. Held senior positions with Homestake and Sons of Gwalia. Involved in the discovery of 4 million ounces of gold.
Peter Farris (Non Exec Director) Business/Corporate Advisory
Highly Credentialed Businessman with extensive experience in real estate and corporate advisory
Paulsens Site Management
- General , Mining, Geology, Processing and Administration Manager average over 3 years on site
- Extremely low turnover and past employees return
Investment Highlights
Purchased Paulsens – high grade, high margin gold mine
established mine infrastructure (replacement value in excess of $30M)
Great Operational and Financial Success since takeover
added approximately 30,000 ounces to current mine plan
paying debt and vendors back quicker than anticipated
Paulsens Regional Exploration
Artemis JV is intersecting significant intervals of gold, silver and copper
Cheroona-Beatty Park Copper/Gold Projects
Paulsens History – “For the Record”
Mid 2005 full scale production, project hedged @ A$627/oz until Dec08
365koz from past 5 years production (end 2009), averaged 70-80koz pa
CY 2009, generated A$39M EBITDA (A$1,200/oz gold price)
Life of mine cash cost A$538/oz, Total Cost <A$650/oz (includes site
establishment)
2010 performance for first 8 months (processing plant idle for 3 months)
Mined 41koz and Processed 37koz
With resources, mine is producing as per historical performance
Resources
Voyager 1 Zone - 314,000t @12.8g/t for 128,700 oz (pre-mining 2010)
Indicated 89,700 oz and Inferred 39,000 oz (4g/t cut-off)
1,000 ounces per vertical metre
67% historical conversion of mined vs. resource model
Site management has a strong history of extending resources
Stage 1 – Plan “Pay off Acquisition”
Details Mine Plan 65,000 oz, generates $44M surplus Milling from June 2010 to Early 2011
Mine 65,000 oz from Voyager 1 lode to 705 level, payout all debt
and Intrepid Mines
Include more of the Voyager 1 Resource into the current mine
plan. Stage 1 mine plan increased over 10koz in past 2 months
Review unmined & remnant resources in the upper levels
(underway)
Stage 1 – Status (End of Aug 2010)Gold mined, poured and sold are all +20% above acquisition model
20% positive reconciliation factor on grade and gold recoveries averaging 97%
Site costs as per acquisition model and Capital Development completed
57% of the gold in the plan has now been mined and on the surface (de-risked)
Stage 1 - Acquisition and Finance Details
$40M total consideration, re-payment milestones;
75% of Intrepid Mines consideration has been paid
$11M performance based payments remaining
No further payments after 62,500oz of production – Jan 2011
$15M debt facility, re-payment milestones;
$10M acquisition facility repaid only 2 months from settlement
$5M Stage 2 capital facility remaining, paid out by June 2011
Stage 2 – Plan
Contains the depth extension of the Voyager 1 lode below the
705 level Currently comprises an Inferred Resource of 110,000t @ 11g/t for 39,000 oz
Allocated $5.5M to extend mine life via decline extension and a
purpose built drill drive at the 705 level
Maintain profitable production beyond 2011
Conduct Preliminary Voyager 2 lode exploration drilling
Stage 2 – Status (Sep 2010) since takeoverFirst level has been confirmed with 10-15,000oz (royalty free), level access is underway
Decline is 25 metres vertically below the bottom level of Stage 1 (705mRL)
300 metre long 705 drill drive is 65% completed
1,000m of Drilling to test down plunge resource extensions of Voyager 1 completed
1,750m of Preliminary Voyager 2 exploration drilling completed
Voyager 1 resource update and generation of a Stage 2 mine plan are underway
Stage 3– “Find and Develop 5 year mine life”Target Voyager 2 lode, which is the plunge extension of the mineralisation at Paulsens
Recently completed preliminary drilling with significant assay result of; 3.4m @ 1.5g/t (true thickness 2.4m) inc. 0.44m @ 5.99g/t
Intersection confirms NST’s geological model that mineralisation continues at depth
Further drilling will occur in November when the 705 drill drive is completed
Define an initial Stage 3 resource for Voyager 2 by early 2011
Ultimate aim – 3 to 5 year mine plan that can yield 60-75,000 oz pa
Potential to Grow – “Other In-Mine Areas”
Unmined & Remanent resources left behind when modelled at A$627/oz.
Pre-mining resource contained 600koz only 400koz has been mined.
Top 100m of ore body has not been mined, potential additional mill feed
Repetitions above and below current mine workings
Potential to Grow – “Regionally”
Extremely unusual for no other sizeable deposit within 50km radius of the
Paulsens mine “lone soldier”
Acquisition includes 365km2 of Tenements
Numerous targets 100% owned
Only operational gold processing plant in the Ashburton/South Pilbara
Number of JV’s in place;
Artemis Resources Mt Clement gold/base metals project (20% interest)
Cullen Resources
Exploration – Artemis (Mt Clement JV 20%)
Indicated Resource 40,600oz located only 35km from Paulsens processing
plant on granted Mining Leases
Gold Resource contained in a flat - lying oxidised strata bound horizon
within 50m of surface; mineralisation open in all directions
80% JV partner Artemis Resources recently discovered a steeply dipping
high grade gold, silver and copper zone; open along strike and at depth
Exploration – Cheroona Gold/Copper
Located 80km from Sandfire Resources DeGrussa copper-gold discovery
Similar geological setting to DeGrussa, including 18km strike of the
Narracoota Volcanics
Highly prospective for VMS
style Au-Cu with historic rock
chips up to 10g/t Au and
located in the vicinity of old
Au-Cu workings.
Aeromagnetic and VTEM
surveys begin in October
Emerging Australian Gold Producer and Explorer
Bill Beament – Managing Director
www.nsrltd.com
Ph (08) 6241 1866