Northern Star Resources completed a significant milestone in its KCGM mill expansion project during the September quarter, with the tie-in of the existing Fimiston circuit to the expanded plant finished on 28 September. The company simultaneously welcomed new Managing Director and Chief Executive Suresh Vadnagra on 5 October, who takes the helm as the major capital project enters its critical commissioning phase. The completion of this tie-in represents the culmination of multiyear planning and investment, though the early-stage commissioning period did impact quarterly operating metrics.
The quarter delivered 364 kilounces of gold sold at an all-in sustaining cost of A$3,217 per ounce, with the group generating A$210 million in net mine cashflow. Underlying free cash flow was negative A$31 million, though this included A$113 million in corporate tax payments and A$76 million in equipment finance lease movements that reduced reported cash flow. Lower production relative to the June quarter reflected planned shutdowns across Kalgoorlie, Yandal and Pogo, combined with commissioning challenges at KCGM. The Kalgoorlie Production Centre saw gold sold decline to 194 kilounces from 228 kilounces in the prior quarter, primarily due to grade and recovery impacts associated with the new plant’s early-stage operation. Pogo undertook planned infrastructure rehabilitation of the underground ore bin and ore haulage systems, scheduled for completion in late October.
Northern Star maintained its FY27 guidance at 1,500 to 1,650 kilounces of gold sold at an AISC of A$3,050 to A$3,450 per ounce, with production expected to be weighted to the second half as KCGM’s expanded facility ramps up. Kalgoorlie is forecast to deliver 550 to 650 kilounces for the full year. Cash and bullion totalled A$1,200 million at quarter end, supported by gold sales revenue of A$1,819 million at an average realised price of A$4,999 per ounce. The company utilised A$500 million of its banking facilities post-quarter end, maintaining financial flexibility while retaining substantial cash reserves.
The Hemi Project integration continues on schedule with a final investment decision targeted for late FY27. Northern Star notes that tax depreciation commenced on acquisition, with expected cash tax savings of approximately A$300 to A$350 million in FY27 and A$200 to A$250 million in FY28. Transaction costs including landholder duty are estimated at A$200 to A$250 million.
The pace of KCGM ramp-up over coming quarters will be the primary near-term focus, as successful commissioning is critical to unlocking the project’s benefits. The second stage of the mill expansion is scheduled for early 2H FY27 and is expected to deliver a 1 to 2 percent recovery uplift and eliminate concentrate haulage between facilities. Pogo’s return to normal mining rates following infrastructure completion and the timing of the Hemi FID announcement will also merit attention. This announcement has been classified as price sensitive and is material to ASX disclosure requirements.
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About Northern Star Resources Limited (ASX: NST)
Northern Star Resources Limited is a gold mining and exploration company that engages in the exploration, development, mining, and processing of gold deposits. The company also sells refined gold and operates mining operations in Western Australia, the Northern Territory, and Alaska.
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