Having bought mines in the bust, Northern Star Resources isn’t wasting the boom, announcing it will sell the Plutonic gold mine, its worst asset. The sale, to a Canadian miner for a rumoured $50m, is a good deal and a fine example of contrarian investing.
We made our own contrarian bet recently when, in The truth about gold stocks, we argued that analysis in the gold sector doesn’t lead to better outcomes. Northern Star has generated higher returns on capital than any other gold miner in the industry and your analyst remains a shareholder, however, we would rather spend our research time in areas that benefit from analysis. That means for miners Northern Star and Kingsrose, we CEASE COVERAGE.
Disclosure: The author owns shares in Northern Star.