Earlier this year it fought off the unwelcome attention of fellow gold junior Sedimentary Holdings, which put a scrip offer on the table of two Sedimentary shares for every nine NuStar shares. The failed offer saw Sedimentary end up with just over 18% of NuStar.

While NuStar Mining CEO Brett Lambert was keen not to overplay the likelihood of future merger activity when interviewed earlier this month by MiningNews.net, he wasn’t totally dismissive of the idea either.

“The lines of communication are open with Sedimentary… they are our biggest shareholder so we talk to them,” Lambert told MiningNews.net

“At this point there is nothing going on but we continue to talk to them and if for whatever reason there was another opportunity put on the table we would consider it.”

Lambert also refuted speculation that personalities had been to blame for the failed merger.

“There’s a few comments around the industry that the merger made sense at the time,” he said.

“We weren’t opposed in principle if the terms were fair and attractive to NuStar shareholders. But I think it has been demonstrated since then that if you look at the relative share prices now there is no way that the deal proposed made sense.”

In terms of other corporate opportunities, Lambert said the company would consider a range of options including acquiring additional projects.

“We don’t narrow ourselves down to any particular range of opportunities. We are certainly always on the lookout if there is another project … somewhere we think would benefit from the skills we bring,” he said.

“We certainly are looking to grow beyond the Ashburton region in time, but we have time on our side with the mine life at Paulsens. We don’t need to rush and do a deal just for the sake of doing a deal. Any moves we make will be very carefully considered.”

In any case, Lambert believes NuStar has a bundle of opportunities at and around Paulsens.

“There are lot of [satellite] targets, most of them are at a fairly early stage, but we are quite confident that ultimately there is a reasonable chance of finding a satellite deposit,” he said.

Reserve additions at Paulsens are also on the cards.

“There is no doubt in our mind there will some extension to the reserves at Paulsens. The current mine reserve only goes to 300 vertical metres (which is pretty shallow for an underground mine), and that’s really a legacy of the fact that it was initially thought of as an open-pit mine and there wasn’t a lot of deep drilling,” he said.

“We are very hopeful there will be an extension below 300m. In fact there has been a number of holes drilled as deep as about 450m that show that mineralisation continues. We will be infill drilling, a combination of surface and underground drilling, once the underground development is around the 300m mark. We are very positive on the upside at the Paulsens ore body itself.”

Meantime first gold pour from Paulsens is expected next week with production pegged at around 80,000oz per annum at a cash cost of $315 per ounce over a mine life of five years. The project contains a probable resource of 1.2 million tonnes grading 10.66gpt for a total of 412,000 ounces.

A total of around 20,000t of ore at a grade of 8.6gpt has now been stockpiled at Paulsens with a minimum of 30,000t, representing six weeks of plant throughput, expected to be stockpiled before the start of processing. Construction of the plant will be completed early this month, Lambert said, anticipating reaching design capacity of 250,000tpa by the end of the current quarter.

Lambert said he was pleased the company had been able to develop Paulsens within the budgeted capital expenditure of $31.1 million given the cost pressures the industry currently faced. The company said in its March quarterly report that the Westpac project finance facility was drawn to $20 million and it did not expect the full drawdown of the facility would be required.

“We think that is where we stand out compared to a lot of our peers in the industry. We have been able to contain capital costs throughout the project and that is in part due to the fact that we locked in a lot of the costs early last year … we used realistic estimates.”