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Bill Beament: Northern Star's Billion Dollar Boss

Issue 102, October 2014

Continued from Page 1 ➤

“We sensed the opportunity, took on what we could and it was one of those perfect windows where there wasn’t much competition.”

All in Western Australia, the total cost of the deals was funded by A$139m in equity and A$70m in debt. Cash has moved from A$45m to A$82m, shares in issue have risen 38 per cent to 592m, resources have tripled to 6.2m ounces and production has risen sixfold to 600,000 ounces.

Roadblocks

The company’s market cap briefly spiked above A$1bn, but has since pulled back by 35 per cent to A$710m, or A$1.20 per share. “There is a degree of nerve you’ve got to hold, but we haven’t bought high cost operations, so we’ve always focused on that.”

At Plutonic, Northern Star has cut the workforce from 410 to 270, but the biggest lever on costs is not spending but productivity, Beament says. “We haven’t changed the mine plans. All we’ve done is pull the roadblocks out of the way.”

The company has trained more miners to clear mine shafts after blasting, cutting an hour off the time it takes to re-enter a mine, and added management between mine plan technicians and underground operators, so that “miners are talking to miners.” It has also cut morning meetings from an hour to 10 minutes.

“We don’t get tied down in long pre-shift meetings,” Beament says. “There’s no rocket science behind it.”

Breaking Rock

Beament’s mindset is owed to his background as an underground contractor, managing both Paulsens and Plutonic before leading their buyout. In 2011, he formed an in-house mining services division at Northern Star, capturing the cost focus of a contractor, but without the contractor’s margin.

“It’s an asset inside the business that’s been very, very good for us,” he says. “Our miners, they’re not on salary and they’re not on a bonus. If they break rock, they get paid. The more rock they break, the more ounces we produce, so it’s a self-funding process.” The upshot at Paulsens was steadily rising tonnage and...

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“There’s no rocket science behind it.”

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