Strong open pit drilling results boost plan to grow Paulsens' production to 100,000ozpa

Transcription

1 ASX ANNOUNCEMENT 21 DECEMBER 2011 Australian Securities Exchange Code: NST Strong open pit drilling results boost plan to grow Paulsens' production to 100,000ozpa Highlights High-grade results of up to 23gpt received from Paulsens open-pit infill drilling Results exceed expectations and will lead to an improvement in the classification of 65,000oz openpit resource and enable a reserve to be estimated Board of Directors Mr Chris Rowe Non-Executive Chairman Mr Bill Beament Managing Director Mr Michael Fotios Non-Executive Director Mr Peter Farris Non-Executive Director Ms Karen Brown Company Secretary Issued Capital Shares 351 M Options 25.5M Current Share Price $0.81 Market Capitalisation $284 million Cash/Bullion on Hand: 21 Dec 2011 $36.4 million Projects Paulsens Ashburton Golden Crown Range Emull Commodities, silver Zn, Cu, Open-pit will help underpin planned production rise at Paulsens from 80,000ozpa currently to 100,000ozpa Significant results include (surface 1200mRL); g/t g/t g/t g/t g/t g/t g/t (true width 2.8m, 1156mRL) (true width 2.6m, 1125mRL) (true width 0.9m, 1128mRL) (true width 0.4m, 1138mRL) (true width 1.3m, 1108mRL) (true width 0.6m, 1157mRL) (true width 0.3m, 1122mRL) Expansion project well underway with mobilisation of additional mining equipment and upgrading of the ventilation system Ramp-up of mining physicals and study on plant upgrade are on schedule Northern Star Resources Ltd (ASX: NST) is pleased to advise that its plan to grow production to 100,000 ounces a year has been given a significant boost, with high-grade drilling results coming from the open-pit infill program at the Paulsens Gold Mine in WA. This program was designed to improve the classification of the current 65,000 ounce 1 Paulsens open-pit resource. The expected upgrade in resource classification will enable a reserve to be estimated.

2 The addition of an open-pit reserve, mining resources left behind in the upper levels of the underground mine and mining more parts of the Paulsens mineralisation at depth will all help underpin increases in production and mine life. Northern Star is targeting an increase in production at Paulsens from ~80,000ozpa currently to 100,000ozpa. It aims to produce a further 100,000ozpa at its neighbouring Ashburton Project. The current resource model categorised a proportion of the pit mineralisation as inferred. To overcome this Inferred classification a 21-hole program was drilled to test the quality of 1990s RC drilling and to upgrade the Inferred Classification for reserve estimation purposes. The pit infill was diamond drilled upwards and outwards from existing underground locations rather than from the surface. Results have been received for 14 of the 21 holes drilled (see table attached). In general these drill results suggest that the mineralisation is of higher grade tenor than previously modelled but also more constrained (see Figure 1). An upgraded resource for the open pit will be released early in Figure 1 - High grade in-fill drilling at Paulsen Open-pit As part of the 100,000oz per annum expansion strategy, Northern Star has recently commissioned the third underground truck and will take delivery of a second development jumbo in December. Once this unit arrives, development of the upper levels, rapid extension of the decline and mining other known zones of mineralisation will commence.

3 To enable this additional mining equipment to operate at maximum capacity, the ventilation system is being upgraded. The civil construction of the raise bore pad has been completed with the machine due to commence drilling in early January ahead of schedule. The mine is already experiencing a ramp-up in physical performance with mined tonnage this half year exceeding the 2011/12 budget. The processing study to increase throughput from 350ktpa to 450ktpa is underway with optimisation results due in early Northern Star Managing Director Bill Beament said the Company was well advanced with its plan to grow annualised production at Paulsens by about 25 per cent next year. "Paulsens is producing a consistent flow of outstanding drilling results, some as high as 12,000gpt, which are now coming together to underpin increased production, mine life and cashflow," Mr Beament said. "Paulsens will be producing at an annualised rate of 100,000oz by the December quarter 2012, generating increased revenue and extremely robust margins. "At the same time, we are progressing rapidly with our studies on developing a stand-alone 100,000ozpa operation at the Ashburton Sulphide Project. "This two-project strategy puts Northern Star firmly on track to be a major Australian producer." Yours faithfully, Bill Beament Managing Director Northern Star Resources Ltd Competent Persons Statements The information in this announcement that relates to Paulsens mineral resource estimation, exploration results, data quality, geological interpretations, potential for eventual economic extraction and estimates of exploration potential, 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 the report of the matters based on his information in the form and context in which it appears. Forward Looking Statements Northern Star Resources Limited has prepared this announcement based on information available to it. No representation or warranty, express or implied, is made as to the fairness, accuracy, completeness or correctness of the information, opinions and conclusions contained in this announcement. To the maximum extent permitted by law, none of Northern Star Resources Limited, its directors, employees or agents, advisers, nor any other person accepts any liability, including, without limitation, any liability arising from fault or negligence on the part of any of them or any other person, for any loss arising from the use of this announcement or its contents or otherwise arising in connection with it. This announcement is not an offer, invitation, solicitation or other recommendation with respect to the subscription for, purchase or sale of any security, and neither this announcement nor anything in it shall form the basis of any contract or commitment whatsoever. This announcement may contain forward looking statements that are subject to risk factors associated with exploration, mining and production businesses. It is believed that the expectations reflected in these statements are reasonable but they may be affected by a variety of variables and changes in underlying assumptions which could cause actual results or trends to differ materially, including but not limited to price fluctuations, actual demand, currency fluctuations, drilling and production results, reserve estimations, loss of market, industry competition, environmental risks, physical risks, legislative, fiscal and regulatory changes, economic and financial market conditions in various countries and regions, political risks, project delay or advancement, approvals and cost estimates.

4 PAULSENS OPENPIT INFILL DRILLING Hole # Downhole Intersection (m) Est. True Thickness (m) cut to (100g/t) gram/m Ore zone and comments RL of intersection PDU Pit shell infill, interp pos CAS 1111mRL PDU Pit shell infill, interp pos CAS 1111mRL PDU Pit shell infill, approx SOY 1122mRL PDU Pit shell infill, interp pos CAS 1115mRL PDU Pit shell infill, Pauls UZ2, re-ass 1124mRL PDU Pit shell infill, CAS / Pauls LZ 1121mRL PDU Pit shell infill, Pauls UZ, SOY 1128mRL PDU Pit shell infill, CAS 1129mRL PDU Pit shell infill, CAS 1128mRL PDU Pit Shell Infill, GEM 1138mRL PDU Pit Shell Infill, GEM 1140mRL PDU Pit Shell Infill, GEM 1140mRL PDU1677 NSR 0.0 Pit shell infill, CAS 1130mRL PDU1677 NSR 0.0 Pit Shell Infill, GEM 1145mRL PDU Pit Shell Infill, GEM 1152mRL PDU Pit Shell Infill, GEM 1156mRL PDU Pit Shell Infill, GEM 1157mRL PDU Pit shell infill, QTZ betw C+S 1127mRL PDU Pit shell infill, QTZ betw C+S 1127mRL PDU Pit shell infill, QTZ betw C+S 1127mRL PDU Pit Shell Infill, GEM 1128mRL PDU Pit shell infill, CAS/Pauls LZ 1130mRL PDU Pit shell infill, QTZ betw C+S 1135mRL PDU Pit shell infill, QTZ betw C+S 1137mRL PDU Pit shell infill, QTZ betw C+S 1140mRL PDU Pit shell infill, QTZ betw C+S 1122mRL PDU Pit shell infill, QTZ betw C+S 1131mRL PDU Pit shell infill, CAS 1125mRL PDU Pit shell infill, QTZ betw C+S 1133mRL PDU Pit shell infill, SOY 1151mRL PDU Pit shell infill, QTZ betw C+S 1120mRL PDU Pit shell infill, QTZ betw C+S 1122mRL PDU Pit shell infill, SOY 1125mRL PDU Pit shell infill, QTZ betw C+S 1109mRL PDU Pit shell infill, SOY 1109mRL PDU Pit shell infill, SOY 1108mRL PDU Pit shell infill, SOY 1108mRL PDU Pit shell infill, QTZ betw C+S 1128mRL PDU Pit shell infill, SOY 1131mRL PDU Pit shell infill, SOY 1132mRL PDU Pit shell infill, QTZ betw C+S 1115mRL PDU Pit shell infill, QTZ betw C+S 1116mRL PDU Pit shell infill, SOY 1117mRL PDU Pit shell infill, SOY 1135mRL PDU Pit shell infill, SOY 1140mRL

5 At a nominal 3g/t lower cut off and a 100g/t upper cut off NSR means no significant result Quality Control - Paulsens All core is logged and whole core samples (if LTK60 size, NQ2 sized core is cut and half cored) are marked and prepared for shipping at the Paulsens Mine Property and sent to an independent Laboratory for assay. The remaining half core is stored on site. All samples from which information in this document is derived were received by ALS Chemex Australian Laboratory Services Pty ( ALS ) Limited in Karratha, Western Australia. Samples are weighed and crushed to 70% passing -6mm mesh. The crushed material is split and a portion is pulverised. A 100-gram pulp is sent to ALS Perth, Western Australia for assay. A 30-gram portion of the pulp is treated by fire assay method with atomic absorption finish (Au-AA25). A second pulp sample split ( g) is kept in Karratha. Sample rejects are discarded after 90 days. Limit samples ( >100 grams per tonne ) are re-analysed using ALS dilution method (Au-DIL). Northern Star Resources inserts one standard in each hole, and one blank is now inserted in each ore zone. Laboratory standards and blanks are inserted by ALS and several pulp duplicates are also assayed as a determinant of mineralisation variability. ALS has AS/NZS ISO 9001:2000 certification in Perth. This does not cover the sample preparation facilities; however these preparation laboratories follow the same quality management system. They are not audited by NCSI but are audited internally by ALS. Indicated Inferred Total 31 December 2010 Oz Au Open Pit Paulsens Upper Levels Voyager Paulsens Stockpiles GIC and CIT Total Paulsens 3.0g/t Au Lower Cut-Off Underground and 1.2g/t Au Lower Cut-Off Open Pit (Rounding errors apparent, 2 GIC/GIT represent in circuit and transit)