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Northern Star hits 600,000oz annual run-rate

Gold sold in the March quarter was 119,976oz at all-in sustaining costs of A$1,075 per ounce, taking year-to-date sales to 387,254oz at AISC of $1,053/oz.

The company narrowed full-year guidance to 540,000-560,000 from 525,000-575,000oz, with AISC guidance left unchanged at $1,000-1,050/oz.

June quarter production is expected to jump to 150,000oz of gold.

“They say the journey is better than the arrival, but for Northern Star, nothing could be further from the truth,” Beament said on a conference call this morning.

“We’re about to arrive at our stated destination of 600,000ozpa … arrival at this destination is going to be highly rewarding.”

Northern Star generated underlying free cashflow of A$32 million for the March quarter after investing around $33 million in expansionary capital.

Beament said cashflow was set to surge as the company completed its expansion phase.

“Increasing production is just a means to growing our financial returns,” he said.

Northern Star closed the quarter with cash and equivalents of $439.1 million after paying $19 million in cash for the acquisition of the South Kalgoorlie operations from Westgold Resources and $7.3 million for listed investments.

Drilling increased during the March quarter and Beament said the company would continue to invest in exploration.

A resource and reserve upgrade is due out in early August.

Shares in Northern Star dropped by 0.2% to $6.36. The stock hit an all-time high of $6.97 last month.

*Kristie Batten is editor of


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Protests halt Peru project

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AngloGold ups stake in Pure Gold

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Anglogold ups stake in Pure Gold

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Fed faces new challenge: A world without labor ‘slack’

WASHINGTON (Reuters) – Business is coming in so fast and workers are in such high demand at AOW Associates Inc, an Albany, New York-based construction firm, that its chief financial officer hired a guy six weeks ago for a job that didn’t exist.

A police officer keeps watch in front of the U.S. Federal Reserve building in Washington, DC, U.S. on October 12, 2016. REUTERS/Kevin Lamarque/File Photo

“We keep our project management ads continuous, even if we are not looking to fill a particular role, and if someone does come along, we make a job for them,” AOW CFO Nicki Armsby said in a recent interview.

The company is not alone in looking for creative ways to deal with a U.S. labor shortage that, according to recent economic data and documents from the U.S. Federal Reserve, may be getting worse.

Policymakers at the Fed, which holds its latest policy meeting this week, must now decide what weight to give to signs that the economy is reaching a point where wages, inflation and other laggard indicators may turn higher.

Data on Friday showed U.S. employment costs rose in the first quarter at an annualized rate of 4 percent, continuing what JP Morgan economists view as a steady march higher since the unemployment rate fell below 5 percent in 2015. [nL1N1S41BF]

Investors appear to be betting on that scenario playing out. The yield on the benchmark 10-year U.S. Treasury note breached the 3 percent level last week for the first time in more than four years.

And labor shortages have been cited by analysts as being responsible for the growing backlogs for manufactured goods in recent supply manager reports.

Add in the fiscal stimulus from the Trump administration’s tax cuts and spending that is hitting the economy this year, and the higher prices for aluminum, steel and potentially other goods triggered by new import tariffs, and the tenor of upcoming Fed analysis could be poised to shift.

“Demand has stayed very strong,” said Tim Fiore, who heads the Institute of Supply Management’s manufacturing business survey committee. “There is plenty for a strong expansion … Dig into the details and the employment side has clearly been constricting producers’ ability to meet demand.”

The Fed is not expected to raise interest rates at the end of its two-day policy meeting on Wednesday. It also is not releasing updated economic forecasts and Fed Chairman Jerome Powell is not scheduled to hold a press conference.

The policy statement alone could show how policymakers have accounted for a range of recent developments, and how their thinking may have evolved since the last meeting in March, when the U.S. central bank raised rates.

According to documents released in the interim, the wages and inflation debate within the Fed appears to be shifting.

In the minutes from the March 20-21 meeting, released earlier this month, the word “slack” was jettisoned in the discussion of labor markets, a notable change in what has been a staple description of labor conditions during the current economic expansion.

The Fed then said in its “Beige Book” report, also released this month, that entrepreneurs across broad sectors of the economy were struggling to fill both skilled and unskilled jobs.

“The labor market is tight and continuing to tighten,” Erin Browne, head of asset allocation at UBS Asset Management, said on Friday after the Labor Department released the latest employment cost data.

“We are finally starting to see that translate into wage inflation.”


Although inflation has remained below the Fed’s 2 percent medium-term target for years, there appears to be growing confidence among policymakers that the pace of price increases will not collapse again and that the objective will be reached.

“They no longer see downside risk to inflation,” said Ed Al-Hussainy, senior interest rate and currency analyst for Columbia Threadneedle Investments.

Data from CME Group and Eurodollar futures still point to just two more rate hikes this year, though many economists argue the Fed will ultimately raise rates on a quarterly basis from here on, leading to three more hikes by the end of 2018.

The direction of wage growth will be critical to the Fed’s assessment, with Powell citing it as the missing piece in the discussion of whether “full employment” has truly been reached or exceeded. That, in turn, will shape the debate about whether the Fed may even need to move faster and further than expected with its monetary tightening.

If the choice is coming between raising compensation and leaving money on the table in the form of unfilled orders, then the weight may be shifting.

Reporting by Howard Schneider and Ann Saphir; Editing by Paul Simao

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U.S. fast-food price war flares as consumer spending softens

LOS ANGELES (Reuters) – Cheap fast-food “dollar” deals surged in the United States during the first quarter, marking a major shift in strategy as a cool-down in consumer spending sent restaurant chains scrambling for customers.

Dollar Menu advertisements are seen outside a McDonaldÕs restaurant in Venice, California, April 29, 2018. REUTERS/Lisa Baertlein

So-called “value” offers have been part of the U.S. fast-food landscape since 2002, when McDonald’s Corp (MCD.N) debuted its popular Dollar Menu and gave the industry a reliable recipe for driving traffic.

McDonald’s and other major chains deemphasized such deals in recent years, choosing instead to invest in food quality improvements to bolster competitiveness with more upscale brands like Chipotle Mexican Grill Inc (CMG.N) and Chick-fil-A.

Dollar deals roared back in the first three months of this year, when economists estimate consumer spending growth braked to below a 1.5 percent rate. That would be the slowest pace in nearly five years and follows the prior quarter’s robust 4 percent growth rate.

Value menu traffic was up 10 percent for the first three months of 2018, while value menu sales chalked up a 13 percent gain, NPD Group analyst Bonnie Riggs told Reuters.

The results lifted value menu traffic 1 percent for the fiscal year ended March 2018, reversing three consecutive years of declines, according to NPD.

“It’s clear that major restaurant chain operators are pulling out all of the stops to get consumers to visit this year,” said Riggs, author of a new report titled “Value Wars 2.0: The Value Menu Strikes Back.”

Restaurants across the spectrum have been battling for a bigger slice of a pie that is not growing. Total U.S. restaurant traffic was flat in calendar 2017.

Yum Brand Inc’s (YUM.N) Taco Bell, known for its low-priced food and “Dollar Cravings” value menu, appears to have an edge in the latest price war.

It sold a record 53 million orders of its new $1 Nacho Fries in five weeks during the first quarter, contributing to outsized value menu sales gains, NPD said.

Taco Bell declined comment, citing the quiet period ahead of Yum Brands’ financial report on Wednesday.

McDonald’s, seeking to win back customers lost after it abandoned its popular but profit-squeezing Dollar Menu in 2013, in January jumped back in with the launch of a $1, $2, $3 value menu.

That menu includes $1 any size soft drinks and cheeseburgers, $2 small espresso drinks and Bacon McDouble hamburgers, and $3 Happy Meals and classic chicken sandwiches.

Consumer response was initially muted, prompting some McDonald’s restaurants to offer a 2 for $4 “mix match” deal on breakfast sandwiches such as the sausage McMuffin with egg.

McDonald’s, scheduled to report quarterly results on Monday, declined to comment.

Meanwhile, some McDonald’s restaurant operators worry about getting lost in a blizzard of competing deals.

“In 2002 we were one of the few chains discounting … Today we are just part of the discounting noise,” one McDonald’s restaurant operator was quoted as saying in the latest McDonald’s Franchisee Survey from Kalinowski Equity Research.

The fast-food value wars are contributing to an increasingly challenging operating environment, Dunkin’ Brands Group Inc (DNKN.O) CEO Nigel Travis told investors last week.

Dunkin’ Donuts franchisees, who were slow to warm to value deals, this month are responding with offers for $2 egg and cheese Wake-up Wraps, $3 egg and cheese English muffin breakfast sandwiches and $5 egg, cheese and bacon breakfast croissants.

Some investors worry that the dollar deals – including the $1 any size drinks and $2 small McCafe drinks from McDonald’s – are siphoning business from Starbucks Corp (SBUX.O), which last week posted its second consecutive quarter with no U.S. traffic growth.

Starbucks, for its part, is adding specials to woo “occasional” customers who visit one to five times per month.

Reporting by Lisa Baertlein in Los Angeles; Editing by Daniel Wallis

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TMX reassures market after shutdown

TMX said the outage, that began on the Montreal Exchange at 1:37:25pm EDT and almost two minutes later on the TSX, TSX Venture Exchange and TSX Alpha Exchange, was caused by a hardware failure in a central storage appliance of the trading system.

It said the incident was not the result of a cybersecurity attack and said it began remediation measures but given the timing, it “could not engage disaster recovery systems in time” to ensure an orderly market re-open and closing session.

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“We apologise to all of our valued clients across Canada’s capital markets and around the world, and to all of TMX Group’s stakeholders for Friday’s interruption in trading,” TMX CEO Lou Eccleston said on the weekend.

“TMX is committed to applying the lessons learned from this incident to help us prevent such issues from recurring in the future.”

TMX had issued a series of tweets on Friday alerting people to the issue as it investigated, which prompted responses from the witty to hacking queries to a broker saying “this is really ruining my Friday afternoon”.

Canada’s stock market last suffered a major outage nearly a decade ago, Reuters reported, when a system fault linked to data feeds shut down trading for a full day in December 2008.

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Syrah wants big second half from Balama

Syrah Resources (ASX: SYR) is aiming for the low end of 2018 production guidance of 160,000-180,000 tonnes of graphite, with 75% of that output expected in the second half of the year after a slow first quarter at the new Balama operation in Mozambique.

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New Century chooses equity over Sprott debt

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