Northern Star Resources to Bolster Exploration Budget Amidst Sector Wide Cuts

As mining competitors continue to reduce spending on exploration, Northern Star Resources (ASX:NST) is bolstering its. The Australia-based company is set to triple its exploration budget to $50 million amidst sector wide cuts.

According to managing director Bill Beament, the company will allocate spending among five of its West Australian mines.

"That's probably a good start as to what we're going to allocate of that $50 million across the assets," said managing director Bill Beament.

Northern Star’s profits have dropped 15 percent in 2013/14 after acquiring the Jundee mine earlier this year. The company has also cut more than 200 jobs since the start of 2014.

"You can't just go in and chop labor costs left right and center,” Beament said. "We've focused on getting the core people in our business and not having too many of them."

Northern Star Resources is taking a calculated risk by boosting spending to gain an edge on its competitors who are cutting costs.

"We are confident this will result in significant increases in gold inventories," Mr Beament said of the plans to increase spending.

The company’s revenue has more than double in 2014, increasing to $297 million from $144 million the previous year. The increase is due to a boost in production at its Paulsens mine, Plutonic mine and Kundana and Kanowna Belle mines in Western Australia.

“These results show clearly that our recent acquisitions have delivered critical mass at both the production and cash flow levels,” says Beament.

“In addition, we have reduced the risk associated with the expanded asset base and the financial muscle to take full advantage of our opportunities to grow mine lives through exploration.”