Australia-based Northern Star Resources Limited staked its claim in Alaska's mining industry last year, paying $260 million to purchase the Pogo Mine from joint partners Sumitomo Metal Mining Company and Sumitomo Corporation. Located roughly 90 air miles (137 land miles) southeast of Fairbanks in Delta Junction, Pogo sits on the Tintina Gold Province and controls some 42,206 acres of mining and exploration leases The acquisition joined the gold producer's two other Tier-1 projects, Jundee and Kalgoorlie.
Now two-thirds of the way through an eighteen-month transition plan focused on modernization and increased production, CEO Stuart Tonkin says that the Pogo investment has exceeded expectations.
"If anything, the regional opportunities and the exploration upside is probably better than we first thought when we looked at the asset to acquire it," he says. "The actual support from our employees that we inherited at the operation and the communities of Fairbanks and Delta Junction has been awesome. So, one year in we're very pleased with the transition, and the results are now showing people the potential we saw in it."
From Down Under to the Far North
While Australia is known for its rugged outback and decidedly not-Arctic weather, Northern Star's expansion into Alaska's frigid Interior isn't as far-fetched as it may first appear. The surface landscape and climate are two major variables that differentiate Pogo from Northern Star's Australian assets, but the mine's potential for increased growth and production dovetails nicely with the company's overall vision.
"We loved the geological potential of the region," Tonkin says. "Although there are some isolated parts, there are a lot of parallels to how we operate our businesses across our Australian operations and how we intend to operate Pogo. So, we weren't scared away."
Northern Star was drawn to Pogo, the eighth largest gold mine in the United States, because of what it viewed as "significant opportunities to grow the production profile, resource, and mine life via resource conversion and exploration on a highly prospective tenement package," the company stated in an October 2018 on-site presentation.
The Pogo acquisition gives Northern Star access to a prolific gold mineral belt with a long history of gold production, although it acknowledges that it will take work to push that production into the future.
"We bought the mine at a point where it typically has a short mine life, so it's...