So as it happens when pogo was first acquired I suspected that...

So as it happens when pogo was first acquired I suspected that management had a plan as to how they could lower the A$1500 AISC of pogo. it was finally clear why pogo was acquired for a fairly cheap figure.

I had my own thoughts and opinions as to how this was possible and obviously why northern star would purchased a big AISC anchor.

A few month ago I spoke to a senior geo about my concerns and I think I found some sort of an idea of what our management will try to achieve and obviously how.

so it goes, the original owners weren't business savvy and their only concern was a check at the end of each month thus giving the operators what ever they wanted as long as a check(return) was provided.

so not the best from a business perspective, and not much care was given to the mine and only the quick cash that could be generated from it.

the second thing comes down to the previous operators again, so I'm told the mine wasn't operating the best, the equipment is fairly old and outdated, I know for a fact that northern star is struggling to use the old equipment as a lot maintenance issues are on-going. Apparently the previous miners were leaving 10grams per tonne of gold behind in the tailings dump and that it was more of a "get in get out" mentality.


I know for a fact that management have had issue with getting equipment over to pogo this includes updated machinery. This isn't a mine next door the Kalgoorlie so getting industrial flow is going to be an on-going issue. I have been told that this is being thought through by BB and ST and it could take up to 12-24months to plan and deliver a business plan which would allow the company to reduce costs in all aspects.

Just as a side note, people tend to ignore the little things. one of the senior geo's over their was saying that it is -37 degrees over there at the moment, I can imagine what kind of issues they would face with the weather being so harsh. Australian gold miner now has to adapt to the opposite side of the climate that is so well known in Australia.

All that being said I personally don't believe northern star is $9.00 and neither does the market. I do believe they can lower cost by a few hundred dollars which is what they believe also. That being said though it's hard to say and only time will tell.

cheers,

Luke