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A new star is born

here was a tinge of sadness but also ble, persistent and consistent
Tan “overwhelming sense of excitement” across all aspects of our busi-
in Saracen Mineral Holdings Ltd managing ness, particularly production,
director Raleigh Finlayson’s voice as he de- costs and underlying cash
livered the company’s final quarterly report flow generation,” he said.
last month. “There’s a tinge of sadness
Less than a week after Saracen share- about the logo ending and the
holders voted almost unanimously in favour brand ending, but we’re rolling
of the proposed $16 billion merger with into a really exciting new vehi-
Northern Star Resources Ltd to become the cle that we’re looking to grow
world’s ninth largest gold producer, the com- internally as well as externally.
pany reported group output of 155,122oz at “It’s been a long journey
$1,224/oz AISC for the December quarter. for us all. The business has
That result ensured Saracen achieved been going for 15 years and
record half-year production of 309,512oz at we’ve been running these op-
$1,196/oz AISC, ultimately ending the com- erations [Carosue Dam and
pany’s 15-year journey on the best note pos- Thunderbox] for over a dec-
sible. ade. We’ve got a lot of 10-year-plus loyal serv- Raleigh Finlayson
Saracen will now seek the Supreme ants of the company, so you’re always going
Court of Western Australia’s approval of the feel that, but at the same time there’s a really December quarterly results for both Northern
merger-of-equals on February 2, with those overwhelming sense of excitement. Star and Saracen provided “more proof of the
orders set to be lodged with ASIC the follow- “The synergies is a financial thing, but what world-class company we are about to estab-
ing day and the union between the two com- it means for our people is enormous. The lish”.
panies officially rubber-stamped on February growth attributes of both companies is very “We are on track for one of the greatest op-
12. aligned, so I think if you’re an employee of portunities ever seen in the Australian gold
A special fully-franked dividend 3.8c/share Saracen or KCGM or Northern Star, it’s pretty sector. In fact, I would go as far as to say it’s
– representing about 35% of Saracen’s half- exciting what we’re going to be doing into the one of the greatest opportunities currently on
year NPAT of $115-125 million (unaudited) – future.” offer in our industry globally,” Beament said.
will also be paid to shareholders upon com- The only negative for Finlayson and the “We are creating a gold mining company
pletion of the merger. Saracen team in an otherwise outstanding that will be growing at a time when most of our
Finlayson, who will become managing quarter which keeps the company on track peers are standing still or shrinking. Growth at
director of the merged group before hand- to meet its FY2021 guidance of 600,000- a time when your peers have none of it, that
ing over the reins to current Northern Star 640,000oz at $1,300-1,400 AISC was three sort of growth is special, and it’s particularly
chief executive Stuart Tonkin after about 18 LTIs which lifted its LTIFR to 1.7, up from 1.4 special when it is organic growth because as
months, said the December quarterly results in the September quarter and above the WA we’ve shown over the years, it’s that sort of
personified how Saracen had operated its as- gold industry average of 1.5 for the first time. growth which delivers strong financial returns.
sets for the best part of the last decade. Finlayson said arresting that unwanted And I can assure you the merged group will
“If I had to summarise the quarterly’s per- trend would be a major focus for the merged retain our commitment to maximising returns
formance in three words, it would be predicta- group as well as the broader resources sec- for all stakeholders.”
tor, especially with workforces starting to feel Northern Star was especially chuffed with
the pinch amid border restrictions due to the the performance of its Pogo mine in Alaska
COVID-19 pandemic. given more than 100 cases of COVID-19
“Obviously with the borders shutting, it has were reported on site during the December
put some pressure on workforce availability, if quarter.
nothing else, and we are seeing lots of cases Despite the operational challenges which
of green operators coming in,” he said. arose as a result, some 54,744oz gold was
“From my helicopter view of the whole mined during the quarter and significant pro-
thing, I think we just need to be, as an indus- gress was also made on the 1.3 mtpa mill
try, really sharp on making sure that as we expansion project, including the Jameson cell
bring a few green people into our business… installation which helped increase gold recov-
that the training and development is appropri- eries to 91%.
ate right up front for those guys.” “Nearly 50% of our team over there has
It was also the final quarterly report for at some point had COVID and recovered,”
Northern Star executive chairman Bill Bea- Tonkin said. “We currently have zero active
ment as a member of the company’s man- cases, we’ve taken that into account in our
agement team. Like Finlayson, he exits on guidance for this year and it’s pleasing that
a high note with the company reporting gold despite the interruptions we’re still tracking at
sales of 252,899oz, well above the upper end the top end of guidance.”
of guidance.
Beament, who will be installed as non- – Michael Washbourne
executive chair of the merged group, said the
Bill Beament

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