Northern Star Resources delivered a strong finish to FY26 with the KCGM Mill Expansion Project now entering its critical commissioning phase, a milestone that opens the door to material improvement in the company’s production profile and cost base. The Stage 1 expansion, designed to lift processing capacity from the current level to 27Mtpa, is on schedule and will ramp up during the first half of FY27 using lower-grade ore. The existing mill will operate through July and August before tie-in to the expanded facility in September, ensuring continuity while the company validates the new infrastructure. This staged approach is prudent and should yield a recovery uplift of 1-2 percent when Stage 2 consolidates processing into a single hub in late first-half FY27.
The June quarter itself demonstrated the quality of Northern Star’s asset base, with 433,000 ounces of gold sold at an all-in sustaining cost of A$2,651 per ounce, down modestly from A$2,698 per ounce across the full year. Full year FY26 production hit 1,543,000 ounces at guidance, with all three production centres, Kalgoorlie, Yandal, and Pogo, contributing positive cash flow. Kalgoorlie alone produced 228,000 ounces at A$2,589 per ounce AISC in the quarter, while Pogo delivered a fifth consecutive annual record net mine cash flow of A$609 million, affirming the strength of the Alaska asset. The company achieved record mining volumes at KCGM under Northern Star ownership, with open pit mining reaching 88 million tonnes per annum and underground operations hitting 3.2 million tonnes per annum.
The cash position reflects robust underlying performance. Group net mine cash flow reached A$1,179 million for the full year, supporting a cash and bullion balance of A$1,235 million after A$129 million spent on an on-market share buyback. Full year cash earnings are estimated at A$2,860-2,950 million, roughly flat with the prior year despite the additional capex running through the mill expansion. The company generated a free cash flow of A$206 million in the quarter while managing the expansion project, underlining the stability of the operating model.
Strategic attention now shifts to the mill expansion ramp-up and two key corporate transitions. A new managing director and CEO, Suresh Vadnagra, will assume office on 5 October 2026, succeeding Stuart Tonkin in the role. The Hemi Project continues to progress toward a final investment decision in late FY27, offering a longer-term production option. Full year FY27 guidance will be released alongside the full FY26 financial results on 20 August, providing clarity on production and cash generation in the context of the mill expansion. With the mill expansion now tangibly underway and a clean balance sheet supporting the next phase of growth, Northern Star has positioned itself to deliver the step-change in production and returns that the market has been anticipating. This announcement is price sensitive and flagged as material by the ASX.
View the full ASX announcement (PDF)
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.
If you would like to discuss this announcement or how it might affect your portfolio, request a callback or call us on 1300 889 603.
