Northern Star Resources (NST)

Analyst: Ben Crowley, Macquarie

Recommendation: Outperform (previously neutral)

Price target: $9.50 (previously $7.50)

Thursday's close: $8.18

Reason: Pogo - straight outta the playbook

Comments: We resume coverage of NST after completion of a $175 million placement to part-fund its acquisition of the Pogo mine in Alaska. We value Pogo at $1,255 million or A$1.95/share. Our DCF is based on a production scenario for Pogo which assumes what we believe is a conservative seven-year mine life. We set our 1.4x NAV 7x OCF target price for NST at $9.50/sh representing a 20% TSR. We see support for this target in NST's EV/production multiple of US$3492/oz which we expect to re-rate to its previous l...