Northern Star Resources shares (ASX: NST) are coming off a 5 day decline of 8.03%, having earlier set about looking to retest the $18 level. With the second attempt to pass this resistance failing, the focus moves back to fundamentals after a recent buyback reduced the float.

In other news, RBC Capital Markets cut it’s rating on Northern Stars shares from Outperform to Sector Perform. This downgrading comes alongside a revision of the company’s stock price target, now set at AUD17.50, down from the previous target of AUD18.50.

Northern Star Resources, a prominent player in the mining sector with a market capitalization of approximately $12 billion, recently completed its acquisition of DEG (De Grey Mining). RBC Capital considers this acquisition to be 7% accretive to the company’s Net Asset Value (NAV). The acquisition is anticipated to increase Northern Star’s production capacity to about 15 million tonnes per annum, with potential annual outputs exceeding 900,000 ounces.

Despite these positive outlooks, RBC Capital identified several risks that might affect Northern Star’s performance following the DEG acquisition. These risks include potential challenges with permitting, technical difficulties, and the absence of immediate production contributions from DEG.

Financially, Northern Star Resources is in a stable position, boasting a net cash standing of $148 million and net mine cash flow of $122 million. Over the past year, the company has reported a robust revenue growth of 19.13%, reinforcing its strong market presence.

 

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Looking towards the future, Northern Star’s CEO Stuart Tonkin has set an ambitious goal to boost production to 2 million ounces by the financial year 2026. Projects such as the KCGM expansion and the Jundee underground development are showcasing progress, supporting the company’s long-term objectives.

 

 

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