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.”
Vale invests $150mn to extend life of Manitoba operations
Vale has announced a $150mn CAD investment to extend current mining activities in Thompson, Manitoba by 10 years while aggressive exploration drilling of known orebodies holds the promise of mining well past 2040.
Global energy transition is boosting the market for nickel
The Thompson Mine Expansion is a two-phase project. The announcement represents Phase 1 and includes critical infrastructure such as new ventilation raises and fans, increased backfill capacity and additional power distribution. The changes are forecast to improve current production by 30%.
“This is the largest single investment we have made in our Thompson operations in the past two decades,” said Mark Travers, Executive Vice-President for Base Metals with Vale. “It is significant news for our employees, for the Thompson community and for the Province of Manitoba.
“The global movement to electric vehicles, renewable energies and carbon reduction has shone a welcome spotlight on nickel – positioning the metal we mine as a key contributor to a greener future and boosting world demand. We are proud that Thompson can be part of that future and part of the low carbon solution.”
Vale continues drilling program at Manitoba
Coupled with today’s announcement, Vale is continuing an extensive drilling program to further define known orebodies and search for new mineralization.
“This $150mn investment is just one part of our ambitious Thompson turnaround story. It is an indicator of our confidence in a long future for the Thompson operations,” added Dino Otranto, Chief Operating Officer for Vale’s North Atlantic Base Metals operations.
“Active collaboration between our design team, technical services, USW Local 6166, and our entire Thompson workforce has delivered a safe, efficient and fit-for-purpose plan that will enable us to extract the Thompson nickel resources for many years to come.”
The Thompson orebody was first discovered in 1956 by Vale (then known as Inco) following the adoption of new exploration technology and the largest exploration program to-date in the company’s history. Mining of the Thompson orebody began in 1961.
“We see the lighting of a path forward to a sustainable and prosperous future for Vale Base Metals in Manitoba,” said Gary Annett, General Manager of Vale’s Manitoba Operations.