Northern Star Resources Limited

Thank you for standing by and welcome to the Northern Star FY25 half-year financial results. All participants are in a listen-only mode. There will be a presentation followed by a question and answer session. If you wish to ask a question, you will need to press the star key followed by the number one on your telephone keypad. I would now like to hand the conference over to Mr. Stuart Tonkin, Managing Director and CEO. Please go ahead.

Good morning and thanks for joining us to discuss our first half FY25 financial results today. We'll be referring to the presentation that's published on the ASX this morning, so I'll refer to the slide numbers there. And with me on the call today is our Chief Financial Officer, Ryan Gerner. We are excited to report record underlying earnings for a second consecutive period, which underscores the value of the profitable growth strategy that we embarked on in FY22. We are more than halfway through the strategy and are well positioned to deliver the end goal of 2 million ounces in FY26, which drives our superior returns. What is very clear is that this interim result again demonstrates the strength and value creation that we are embedding in our business. Both EBITDA and return on capital employed metrics continue to improve, while the balance sheet remains strong and in a net cash position. This multi-year trend reflects our longer-term strategic lens we apply to all parts of our business. We believe this is a key differentiator for all our stakeholders at Northern Star, which we are very proud of. Northern Star offers significant gold price leverage to investors, and we continue to gain strength from the simplicity of our gold-only portfolio, with globally significant scale in the low-risk jurisdictions of Western Australia and Alaska. I thank our team for the effort and the commitment that delivered this excellent result. We remain well positioned to achieve our FY25 production and cost guidance while retaining a firm focus on progressing our key growth plans, including the KCGM mill expansion project, which remains on time and within budget. With that context, I'd now like to hand over to Ryan Gerner, our Chief Financial Officer, who will discuss the results in more detail. Thanks.

Thanks, Stu, and good morning, all. I'll now step you through the first half financials. I'd like to begin on slide four. Our key financial metrics for the group improved significantly on the previous corresponding period. The strength and quality of our assets is illustrated by the company delivering a record underlying EBITDA of $1.4 billion for the first half of FY25, up 58% from the previous period. Maintaining capital prudency and the realisation of tax synergies from the merger have resulted in $1.15 billion of cash earnings, up 63% from the previous period. This record first half cash earnings has enabled the board to declare an unfranked interim dividend of $0.25 per share. The company expects to generate franking credits from Q3, as mentioned in the second quarterly call. and therefore subject to board approval, the final FY25 dividend is expected to be partially to fully franked. In respect of the company's share buyback, we've bought back $257 million in shares to date, and the program is open subject to blackout periods until September 25. Over to slide 5. Our balance sheet supports our strategy and gives us flexibility through the cycle to fund opportunities that may arise to enhance our asset portfolio to deliver long-term superior returns to our shareholders. We remain well positioned to deliver our profitable organic growth strategy with our strong balance sheet, which includes $265 million net cash position at 31 December. We have significant liquidity of $2.7 billion and maintain three investment-grade credit ratings. Over to our production overview slide on slide six. During the first half, the company sold 804,000 ounces of gold at an all-in-sustaining cost of $2,105 per ounce, and we remain on track to meet our FY25 guidance. A key milestone was reached during the first half. After many years of work by our team at Casey Gem, they successfully completed the east wall remediation. This now enables full access to the high-grade Golden Pike North mining area, which is key to lifting production in the second half. At Thunderbox, we're delivering nameplate throughput consistently, which is really pleasing to see. And at Pogo, with the major processing works completed in the half, this asset continues to deliver at the mine and mill, which is translating into great cash flow. Over to page 7. This slide highlights the significant cash generation by the business during the first half with 124 million of group underlying free cash flow. The waterfall chart on the left illustrates the positive contribution from each production centre to the group's cash earnings for the period. Cash earnings for each production centre is represented by the segment EBITDA generated minus the sustained capital spent at that centre. Pleasingly, all production centres contributed strongly with Kalgoorlie, our largest centre, comprising 60% of the group's cash earnings for the period. We will continue our focus on cost and productivity in the second half, which, alongside the planned lift in group production and with the current buoyant gold price, should translate into higher free cash generation. Now, slide eight. We are pleased to have doubled our return on capital employed to 6.1% half on half. This reflects progress in our profitable growth strategy and focus on allocating shareholder funds to generate returns. This also highlights the strength of our first half underlying earnings before interest and tax, which is up 130% from the prior year to $778 million. Over to slide nine. which highlights EBITDA margins achieved by the group and each production centre over the period. All three production centres performed strongly and achieved healthy EBITDA margins. A strong gold price and a focus on costs has delivered an EBITDA per ounce increase from $1,200 per ounce a year ago to over $1,700 per ounce this half. As illustrated by the graph on the left, Kalgoorlie Production Centre continues as the key contributor Iboda and is expected to grow with access to Golden Pike North at Casey Gem. In relation to our profitable growth strategy on slide 10, we are now three and a half years into our five-year strategy and we have delivered major milestones which are key to us achieving our objectives. With the progress made on our strategy and the capital investment undertaken in our operations, the business has generated over $2.1 billion in cumulative operational free cash flow. As you will hear from Stu shortly, we're also well progressed at our KCGN mill expansion project. Over to slide 11. Today, the board has declared a record interim dividend of $0.25 per share, equating to a 25% payout of cash earnings. This dividend is complemented by our $300 million share buyback program, which remains active, demonstrating our purpose to deliver superior shareholder returns. Before I hand over to Stu to finish the presentation, I'd like to step you through page 12, where we've set out our key elements of how we deliver shareholder value, which is through owning world-class assets in Tier 1 locations and applying our DNA of operational excellence. Operating in a safe and responsible way with a demonstrated track record, our portfolio of long-life assets in well-endowed geological systems provides us with flexibility and optionality to extract value and employ capital prudently to where the best returns can be generated. And as an overarching foundation, we maintain a strong balance sheet which enables the execution of our strategy through the cycle. Thanks very much, Stu. Back to you.

Thanks, Ryan. Now to slide 13. I'm exceptionally pleased with the progress we're making on our KCGM mill expansion project, which remains on track and within budget. Our capex guidance of AU$1.5 billion remains unchanged and is inclusive of that 10% inflation contingency. We also reiterate previously disclosed multi-year project capex guidance, which remains unchanged. We're now halfway through the three-year build, which will see the new plan commissioned in FY27, And as you can see on that slide 14, it seems very busy with lots of activity on site. We're at peak labour force and our camp's full, which is great to see the activity and the action and the progress. In these photos, you'll see ball mill shells that have arrived on site. There's plenty of activity in the primary crushing and milling areas, and the major concrete pours are on track and within over 50% of the total concrete poured today. I'd like to thank that project team and our contractors doing that work. They're doing a fantastic job, and we're very pleased to see that progress throughout the plan. To slide 15, on 2 December, Northern Star announced that it had entered into the binding scheme of implementation D with ASX-listed degrade mining, under which it proposed that Northern Star will acquire 100% of degrade by way of a court-approved scheme of arrangement, and all eligible degrade shareholders would be entitled to receive 0.119 New Northern Star shares for each DeGray share held at the scheme record date. So if approved by DeGray shareholders and the court, that scheme is expected to be implemented in May 2025. Over to slide 16. This reiterates FY25 guidance, which remains on track. For the year, our production is forecast to be second-half weighted, driven primarily by the increased grades at KCGM from the Golden Pike and the Pit Floor. and continued strong performance across both the Andal and Pago operations. Please note there's also major shutdowns planned in this quarter three across all the assets, which was foreshadowed at the start of the year and inclusive of our guidance. Slide 17, Northern Stars Exploration Program remains a highly attractive approach to value creation. to support our purpose to deliver superior shareholder returns, and for the year ending March 2024, our cost of resource addition is a compelling $31 an ounce. We're in a very enviable position where we have nearly 21 million ounces of oil reserves and over 61 million ounces of mineral resources. This corresponds to a 10-year reserve back-to-production profile. So just finally on slide 18, that concludes the formal part of the presentation. I'd now like to open up to Q&A. So just hand it over to the operator. Thank you.

Thank you. If you wish to ask a question, please press star 1 on your telephone and wait for your name to be announced. If you wish to cancel your request, please press star 2. If you're on a speakerphone, please pick up the handset to ask your question. Your first question comes from Levi Spry with UBS. Please go ahead.

Good morning, Stu and Ryan. Thanks for your time. Maybe just a question on the returns piece. Can you just clarify exactly what you said there on the potential for the final dividend to be partially or fully franked and how you were thinking about potentially extending the buyback here or are we awaiting de Grey and I guess the full integration of that in the portfolio for FY26?

Hi, Levi. Sorry, a bit croaky early. Hi, Levi, it's Ryan. Thanks for the question. Yeah, so I said at the second quarter that, you know, we're looking to come back into a taxpaying position. So that's not changed. I flagged that for the Australian operations, we were going to be paying roughly $60 million, I guess, up to 30 June. and then just for completeness pogo that is generating good money is also paying tax not relevant to franking credits but is also paying tax so 40 to 50 us this half two so then then when we step forward and you can see on the ballot sheet of the of the company there's 140 odd million dollars of a current tax liability so that relates mostly to this first half um of the australian operation so There's a few moving pieces, and that's why we're saying partially the fully franked. We will be starting to pay tax into that calendar year 26 and beyond. What somewhat, I guess, not complicates it, but subject to de Grey completing, of course, then there's going to be a shield from that. expectations aren't that we're not going to then not pay tax, it's just how much and what is the timing, I guess. As you know, tax is quite, I'll say, lumpy. So we're just waiting to see what happens in the six months, Levi. So probably towards June, I'll be able to give a lot more conviction update on where we're going to sort of land in that next 12 months and therefore the franking piece.

And with the buyback, obviously we've got through to September to complete that $300 million. We'll evaluate the options after that with a lens on all methods of capital returns and superior results. So that'll be a decision after the end of the year.

Yeah, great. Thank you. Thanks for the detail. And maybe just a quick operational one. We're following your weather over there from over here. Can you just sort of talk us through how you might be prepared for a bit of rain fall through the middle of WA?

Yeah, most of that cyclone that's coming down is actually hitting De Grey. You can see it coming down the top into Headland. So you see all those people, exploration camps and all that have probably mobilised out this week up that part of the world. But, you know, there might be some rainfall out if it keeps coming down through the centre of WA. But, yeah, no different to anything we've, you know, experienced before. When our ramps get wet, we park up our fleets, we utilise our stockpiles, we let it dry out so we don't have to go back and, you know, do much repairs to that works. And just from a safety perspective, and it's... Usually dries out pretty quick. We've had some 45-degree days and some high winds around the goldfield, so it doesn't take long for that to dry out, Levi.

Yeah, got it. Thank you. Thanks for your time.

Your next question comes from Kate McCutcheon with City. Please go ahead. Hi.

Morning, Stu and Ryan. Just fleshing out the buyback, given that DeGray shareholders receive Northern Star shares when that completes, is it fair to assume there will be no stock purchased until that closes in May sometime? And if that's not fair, then just what's the thinking there?

Thanks, Kate. No, they're independent. To your point, you can do a slight calculation on that 0.119 ratio, and as we buy back shares, that ratio doesn't change, and therefore there's some slight changes of the 19.9% of the degree ratio levels of the combined business. But you do the maths, you're into decimals. margins of decimals. So it's in the scheme of things of how dividends are paid and cash flow comes from that asset and future dividends on cash earnings, the contribution, all of that has been understood and considered. So I don't see that there's material reason to change any behaviour in relation to that.

Okay, got it. And then moving to the super pit. So we spoke at the quarterly that Golden Pack access was delayed by a quarter or so. And now you're back in there and thinking about the next year or 18 months, is there scope to put more gear in there to get out more of those higher grade tons? I guess I'm trying to work out how to think about the delay and whether those impacts flow on or whether there's scope to catch up and we shouldn't get too hung up about it.

I'd probably say in mining it's rare to catch up, you know, something where it's the delay or timeout or, you know, pushing of that. It's... It's always hard to say you can go faster. There's diversification of production in different areas, but all I'm saying is the pit floor in the good grade, we've managed that very, very well. Destacking that and volumes are increasing of that higher grade material. Yeah, so our outlook is very favourable for the next five years in there, digging that high-grade pitfall, complemented with the growth from the undergrounds, and then obviously the mill expansion comes in and is supplemented with extra low-grade stockpiles. So, yeah, I think we're talking about weeks and months, not significant step-backs from where it is. it's there's limited real estate down the bottom of that pit so i can send as many trucks as i like but they'll be killing um so we're just really careful around our vehicle interactions and you know how much we put down there so different to say the southern cutback where you can actually add more fleet and move more material when you get down the bottom of that that pit floor um it is quite very similar to like an underground. You just can't throw more jumbos and trucks or something and expect more metres. It's around efficiency, productivity and managing those interactions closely.

Okay, excellent. Thanks, Hugh. Your next question comes from Matthew Friedman with EMST Financial. Please go ahead.

Sure, thanks. Morning, Stu and Ryan. Can I firstly ask on your leases and lease liabilities? So end of the half, $360 million of lease liabilities and cash outflows from leasing expenses running at about $220 million a year. Can we get a sense of how much of that sits in equipment, you know, either at KCGM or maybe other long-life operations and I guess how you guys think about whether there's any benefit in you know, whether you convert some of those leases to Northern Star-owned equipment. Thanks.

Hi, Matt. How are you going? Yeah, good. Yeah, so there's been a bit of an increase. There's a little note down in the financials about it. The Jundi Renewables Project is effectively a, you know, power purchase agreement. So, as you know, we've got four wind turbines there and a solar array farm. So that's been the, you know, completion piece and therefore... onto the balance sheet as a liability this half. We also are looking at, well, we have also ordered some open pit gear to replace some of the hired gear that are used across the Yandelops. So trying to obviously pay margin out when you hire things, so trying to get a better cost outcome there for the business. And then, of course, you know, as now Charlotte ramps up and has probably over the last, you know, one and a half to two years, gear there is also increasing with that, you know, more metres, more advance, et cetera. So across the business, you will see probably our gear, you know, the gear held move up over these next few years.

Okay, thanks for that, Ryan. And then maybe secondly, I apologise, it's a pretty general question, but at POGO, obviously we're about a month into the new administration in the US. Is there any sort of impacts or things to call out there that are affecting the operation or that you've seen over the last month or so?

Yeah, nothing material to what we've seen, but It's fluid, let's put it that way. And, look, we've already had experience, version one of this, and it really gets me endued through that. And so the tariffs and imposts around materials that have moved in or out, they were already there, do exist, and, you know, US content of supply, it is more expensive to get things in Alaska that aren't, born out of the US in the first place, and if they are, just the freight to get it up there as well makes it a challenge. So there was already levies on a lot of the stuff that comes out of Asia or Europe, which is a lot of our underground source for things that we do in Australia. So I think then back domestically, we don't have a lot of US content supply, so tariffs around that regard is not necessarily going to put pressure on those things. But at US, it's kind of insulated, given it's got US cost base, US revenue line, and a general higher cost of just getting stuff to Alaska in the first instance. So I haven't seen any structural changes. We're very alert to policies that are different to what we planned around. But as you can start to see at POGO, the The margin there from, you know, where US is over US$2,900 an ounce and our always-sustaining cost of $1,500 over margin, it's generally serious US dollars. You know, more than we acquired that asset for, as I've always said, if we'd be knocking that out on a yearly basis, it's going to surpass that. So very happy with... Argo is not fragile, and we might not like it, but it will be able to manage any of those structural changes that potentially can be imposed over the coming years.

Yeah, thanks for the insights, Stu. Obviously a pretty fluid situation. Anything maybe to call out in terms of labour access or workforce? I mean, obviously it's probably something that affects the southern states more than Alaska, but yeah, anything to call out there?

We haven't seen, again, we haven't seen any problems there. And I think, if anything, we've got a pretty motivated team that have seen success through their own hard work. They've been rewarded well. You know, they've got benefits that they don't typically get across other operations that we've sort of brought into that asset over the years. So Simon Jessup's over in Alaska at the moment, Jim Coxon and the team. So, yeah. Yeah, they'll come back with another further outlook and update. And we're looking at, you know, what's a pretty bright future at Pogo. So, yeah, looking forward to getting out of the wind of months, getting new portals established down near the airstrip there, getting into access as they take us out under the river through to Goodpasta and the overall plan of what we can do beyond the current plans at Pogo. Pretty exciting.

Yeah, you got it. Thanks for the insight, Stu.

Your next question comes from Daniel Morgan with Baron Joey. Please go ahead.

Hi, Stuart and Sam. First question is, you flagged shots, obviously, this quarter, or reiterated them. Can you just talk about if those shots already occurred? And if so, how did they go?

No, it goes when line is running out and you've got to replace them. And I think even Jundee, for instance, has got a shot right in the last week of March, so... Yeah, not ideal, but it is when it is. And all we say is we do those sort of quarter one, quarter three. So quarter one's a larger shut. Quarter three is a mini shut across most of our plants. And we also highlighted we took BOGO to a three shut scenario so that we could do sort of mini lines. So we're just flagging it to say we've reiterated our production and our cost guidance for the full year, second half weighted. You're going to tell me quarter four is going to be a good one. We see the risks. You see it's hinged largely on grade announcers coming out of Golden Pike, out of the Super 5th floor and essentially the rest of the assets. We're very pleased with how they're tracking against their plans. Yes, it's progressing great, not without the risks and the weather and things like people ask. They're all usual. usual parts of their business but yet with the outlook all these things is you know still on an upward trajectory as we go to two million ounces and beyond and with the female expansion and if we're successful with degree we've got exciting outlook over the next few years with very strong leverage to go gold price and separate question just on those maybe the handle mill how is that going with throughput and reliability post quarter round yeah so it's that nameplate saying 6 is reliably deliberate we obviously know it can do more so we're not stopping there and so it's yeah just getting the stability into it so you're very pleased with its performance to date and it's yeah there's no issues there at Thunderbox Thanks Stuart Thanks Dan

Your next question comes from David Radcliffe with Global Mining Research. Please go ahead.

Hi, good morning, Stuart and Ryan. So a non-accounting question from me. Just on the mid-term production profile, and just to come back to this, because obviously at today's price, there should be good upside to extend the shorter mine life assets in the portfolio post the end of this decade. So I appreciate you spending a lot on exploration, but do you need to consider maybe raising the gold price assumptions or investing some capital now in the good times to develop that optionality within those. So thinking outside of KCGM and potentially DeGray here, it's just good to understand what your thinking is here and maybe which of those shorter mine life assets you think have the better potential and stand out.

Yeah, thanks, David. So we do our resource reserves sort of close out on the end of March. So a lot of that work's underway and evaluations are underway for that. And I think you're right in saying, you know, you really look at those gold price assumptions for resources and reserves. Go back to what we were using, they're less than half of spot price. So it's important that we consider those things. But it's more driven by costs and we've seen costs escalate. derived cut-off grade. We then put in that revenue line to ensure we've got those embedded returns in those ounces we're seeking. I'm not going to get cute changing prices to add, you know, book ounces and then, you know, grow resources or reserves and add it on the end of these lives. You've seen the behaviour over the last few years of us investing in our already longer life but lower costs mines and also trying to get the economies of scale to lower the costs on the global cost curve and start on the first half. So I think you're right in this, like I said before, these pop-up shops where there's, you know, at this gold price, lots of mines can start or extend, but then they are fragile, you know, if there's retracement of pricing. So we're very careful to not do that. But I think you're going to see a bit of that across the sector where ounces that can be mined and made money in this period, I think if you can pull it out in the next year or two, that's pretty wise. If you're trying to add year 10, 11, 12 based on today's gold price, I think that's a bit of accounting magic. So I think we'll leave that one alone.

Okay, so... Thanks. So there's no, I guess, obvious capital projects you're talking about because the risk is obviously successful as we all hope on to grey and then, you know, you're putting money into that and then there's potentially not surpluses to then put into those older assets.

Is that the way to think about it? Well, no. Our grey strategy that we embarked on from 22... is addressing all of those opportunities that we saw at a much lower gold price that is just more greatly enhanced by the current gold price. So, you know, the $1.5 billion case of GML expansion, you know, from 13 to 27 million tonnes per annum, you know, the view and the attitude around those was done, you know, it was $2,700 an ounce. You've got an IRR at 19%, you start running spot through it, it enhances it. So... We don't have to do much more. We can look at resources reserves, put it on paper, but ultimately the hardware of our plants, the mining activity and going through the plants to derive a gold bar, We've already done multiple times at both, you know, Jundi, TBO. Now, obviously, Finleston's underway. I've just said there's a window up, Ogo, with an opportunity to do more. And then when you look at De Grey, they've already got a $10 million first plan with a $15 million tonne per annum upgrade option in their thinking on the equipment sizing that they've ordered. So I think it's... We did this years ago. We're not suddenly, you know, pondering on what we'd do next if the price stayed or increased $1,000. This is all enhanced on things that we're already three years ahead of everyone else in thinking and investment in that regard.

Great. Thank you. That's really helpful while possible.

Your next question comes from Hugo Nicolasi with Goldman Sachs. Please go ahead.

A couple of questions from me please and again sorry in advance for asking a lease accounting question but just following on from Matt's comments before just around the renewables projects and lease additions, can you just remind us where those projects are at, how much we might expect that liability to keep increasing in the second half and then just what the cost savings you're expecting to come out of those PPAs look like?

Thanks to you guys Ryan. The renewables at Jundi, as I mentioned with Matt, don't expect that to increase because that's an over-the-term cost. So that's a fixed PPA. So don't expect that to increase. So that's the single largest renewable project the company's done. There's been some smaller-scale solar farms done at Karasee Dam, and there's similar things planned at Thunderbox to be, I guess, installed in the future. So don't expect that to increase. Obviously, there's a very potential large-scale project wind and solar project that we're considering at KCGEM, but that's a little bit away yet. So, yeah, so don't expect that to increase, Hugo, going out in the first half. I spoke about the equipment. They're obviously leases too. We've typically bought gear through a lease. You know, there's increases with the open pit. As I mentioned, we're looking to replace some high gear and then obviously with the underground ramping up at Mount Charlotte, expect that to sort of feature there.

On unit costs, you're going to see no worse and potentially improved equipment but marginally. So on a net-net basis, it's going to stop escalation of volatility around carbon-intensive energy generation, but it's going to be the PPA as a consideration. All of those things is to pretty much stabilise power. So net-net dollars is pretty similar, but obviously the set-off and the motivation has largely been around decarbonisation. We said we have that 35% reduction by 2030, and we've got 70% of our emissions come from those decarbonisations. power generation sources and grid, which these are doing, these are underway to replace.

Excellent. Thanks for that, guys. And then just to ask another one on capital management, I'm sorry to push the point after a few questions already, but in not extending the buyback, you've only got $43 million left in that program, having, you know, spent $85 million last half, despite half of that being in blackout. On your reported metric, you know, your net cash liquidity is $2.7 billion. comfortably covers the acquisition if that completes before considering the cash you'd also acquire. So I guess to Kate's question, it sounded like the buyback and the acquisition are independent. So how do we, I guess, interpret that? Do you see maybe higher returning opportunities on a six-month view or is it just not a priority at the moment in terms of the capital returns? And that's kind of a see how some of these projects go before you start to consider wrapping that up.

Yeah, so we've got until September to complete that buyback, and when it doesn't mean like we've done historically, it'll be opportunistic as we've utilised that, and we're also restricted by those blackout periods. So we're not going to talk about a new or an extension or an uplifted buyback until we've completed by time or money the current one. Yeah, so... That's the process that we're running through. But I think the sensible time is after the full year accounts to assess all of that, plus the knowledge of degrees in or out. Our capital projects are understood. You know, all those things are there. The half yearly, I think it would be a bit cute to come out now and boost up a buyback. I think that's getting a bit cute. And I think... Across the sector, you're hearing global peers do that. They work on calendar year. So they're at their full year, if you kind of appreciate that. So majors today that have announced buybacks, that's on the end of their full year account as opposed to us sitting in the interim.

Yep, no, that makes sense. Thanks, Stu. And then just last one, if I can squeeze a third in. Can you just remind us the moving pieces that go into adding that sort of half a million tonne per year step up at the undergrounds at KCGM and sort of the timeline to execute and get new equipment and all those sorts of things?

Yeah, so in our quarterlies, you'll see in the back pages on the development metres, and quarter on quarter on quarter they've just been building and adding and just opening up tons per vertical metre across Mount Charlotte and all those new portals being established inside the super pit and access along between the super pit and Mount Charlotte which is Mount Ferrum etc and you just start to see those metres being delivered so we'll be 7, 8, 9 kilometres a quarter coming into those areas opening up those large tons and the stoke tons come off the back of that and we've The outlook is 500,000 tonnes per annum addition as we grow from 2 to 4 million tonnes per annum from that. And obviously when the super pit at the Golden Pike gets exhausted, Bimmerston starts to really start to contribute and turn on, but the development will be in place in advance of that. So there's plenty of charts in there showing sources of, between stockpile, open pit and underground, but we haven't given the granularity of zones or areas or metres. That's... It's a big base and we'll fill it up with the best material we can put in it.

Fantastic. Thanks for the extra colour. I'll pass it on.

Your next question comes from Mitch Ryan with Jefferies. Please go ahead.

Thanks guys. My question just relates to the KGM mill expansion. I'm just wondering if you can expand on that. Sue, obviously we've seen in the region far smaller mills but they've come in ahead of schedule and under CapEx budgets. Is it too early to sort of give a comment? You sounded quite happy with the progress to date but are you seeing any – how are you seeing things on a capital spend relative to expectations and also timing relative to expectations?

Yeah, thank you. I don't know which mill came in under schedule and under budget. It might have been Clarkie or Capricorn, I don't know. But I don't see us coming in under timing or under money. We'll get what we ordered and built, you know, as planned, and we'll, as I'll probably forecast right at the get-go, contingency... was basically allowance for escalation on things that weren't completely designed or secured through an order number or float on labour costs and hours. And so I expect we will consume that, hence why we've told people that. I'm happy with the progress to date. It's still working very closely with our contract partner to make sure we're doing it, and we're in the thick of it right now. but you don't take your eyes off that. So there's still a lot of work to do. I'm just pleased at where we're positioned on, you know, the quality that's occurred and the progress that's been made. But we've still got, you know, nearly 18 months to run that through. So, yeah, we're a bit early to call either way, but I'm pleased with where we're at. OK. Thanks, guys.

Your next question comes from Al Harvey with JP Morgan. Please go ahead.

Yeah, morning, team. So I suppose you did mention you're still progressing towards that five-year two-million-ounce target by FY26, so just under 18 months away. I suppose when you got Hemi coming in, you mentioned the upside at Pogo with the exciting upside there. Just trying to get a sense of when we might be looking at timing for the next five-year plan and directionally where group production could go to. Notwithstanding, obviously, you do have 18 months on the current one left to go, but, yeah, are we kind of thinking post-financial full-year results this year or could it be a bit earlier?

Yeah, thanks. We're definitely thinking around that, but we've still got a bit to do to deliver the existing one and I don't want to recut people's focus or direction on those things that we've done a lot to deliver what we said we would do and that's what we want to do. Look, it will be on that full year and whether it's pre-diggers or pre- or around that full year results call is when that strategy and our guidance typically comes out. So whether that's one year or whether that's greater years, we'll consider all those things but I appreciate people want as much visibility as they can but at that point We'll obviously know how this year was delivered. We'll know degrade is in or out. We'll know our resource reserve update. So it's a more complete picture as opposed to going a bit early again and lots of harm waving. We're careful about that.

Thanks, Jay.

The next question comes from Baden Moore with CLSA. Please go ahead.

Good morning, everyone. Just a quick question, really just following up on some of the investor focus on the buyback. If I look at your cash movement through the first half, it looks like you actually went backwards on cash through the six months despite the strong commodity price. Appreciate you reinvesting a lot of money, but that also included a $200 million gain on your share sale. So, Stroney, do you think it's appropriate? Are you thinking about extending a buyback period while you're not generating excess cash, or do you think that in the second half you're going to see a material turnaround in that cash growth?

Yes, we're not extending the buyback. We're just reiterating the buyback has until September 2025, and we're, what is it, 257 million complete on that, so there's only 43 remaining through to September 2025. So questions on the call saying... Will we lift it? Will we extend it? We're saying that decision will come at the full year results in July, August. But to your point, we're investing for returns, superior returns, and people can see our CapEx guidance. You can see increased return on capital employed metrics as we are delivering those organic projects. So, yes, absolutely, a strong net cash position and balance sheet. people can appreciate the money's going back in, but I think today's $0.25 a share dividend and cash earnings of $1 a share demonstrate the health of the business to support those returns. And, you know, our policy of dividends doesn't change with the inclusion of HEMI, should that occur through this year, so that people get immediate returns from that if they come on board from DeGray shareholders. So all those things... There's not many companies that are doing all those things, organically growing, you know, margin expansion, dividend paying, buybacks, inorganic M&A that's secretive. We've paid back to shareholders to date $2.3 billion through dividends and buybacks. So I think, yeah, have a good look at the history and the outlook. It's in as good a... can be a bull position. No, no, no.

Forgive me, I'm not suggesting the balance sheet's weak. I just think, you know, when we're thinking about potential signals for where you have the additional liquidity you may need, do you think you'll need to see a turnaround in that cash generation or do you think you'd be happy spending out of the capital you've got at hand?

I don't know what you mean turn around a cash generation. We're up 63% cash earnings period on period and it's, you know, gold price stable is still going up.

Just the net cash went from $1.1 billion to $1 billion in round numbers. Through investing, yeah.

Yeah, it's the outlook. It's the outlook. So obviously it's just saying we, yeah, there's, There's money putting into this business for the future. We see the outlook and our behaviours and our actions are based on the outlook. So the half change is right, right? But when we think about our buyback and think about all the dividends we're paying out and the future, we look at what the outlook is. So the strength of the outlook is there. That's why we have the buyback, even though, yes, Our cash position is moving quarterly, half yearly. We see the outlook.

So that's how we judge our actions, our behaviours, is on that outlook. But on the thought of your guidance, I mean, growth capitals, $9.50 to $10.20, over $1 billion in growth capitals, plus the KCG and mill expansion, $530 million, which is understood and known, plus expiration, $180 million. That's... that's pretty clear on what was going into the ground from cash flows. Plus, you'll appreciate the hedging's being unwound and that's the average realised price isn't spot, but that's improving as well across the period. So I think, point taken, cash goes backwards, but it's lumpy, as Ryan put out, with tax and timing and capital at the moment.

Yeah, and it's going back because we're paying dividends out. So, you know, we're giving the money back to... rightfully shareholders. Thank you.

Your next question comes from Levi Spry with UBS. Please go ahead.

Thanks for the extra one. It's a good time to be a gold miner. I think you reaffirmed the 2 million ounces for next year's too. I just want to confirm that that's not a run rate to be achieved through the year and I guess it's pretty material growth from this year, year on year, if maybe we're heading to sort of the mid to lower end of current guidance. So can you just maybe remind us of the drivers from the two key centres, Kalgoorlie and Yandale, year on year as we look forward?

Yeah, so we'll obviously put our FY26 guidance out in with our results in July. And it's never a point, it's a range. And our strategy is to deliver 2 million ounces, which is a checkpoint on the way through to the mill expansion additional and other things that are coming. So that was 300 out of Pogo, 600 out of Yandle, 1.1 out of Kalgoorlie. which was inclusive, I guess, of that $650 from KCGM. KCGM's the final step-up piece from where it was last year, $450. We're obviously trying to get $550 this year. As a group, that's what we're confirming our group guidance. At an asset level, it might be contributed from different areas because we've got that flexibility diversification, but absolutely, that's the outlook. And ideally, we have a good window to that in the run rate of quarter four, this quarter four, to show what these assets can do as well.

Yep, got it. Thank you.

Our next question comes from Simone Grogan with The West Australian. Please go ahead.

Hi, Stuart and Ryan. Thanks for taking your question. A labour-related question from me. I was just wondering... Just in terms of the salaries and what Northern Star is offering, do you think they're competitive enough to compete with the iron ore majors, you know, up in the Pilbara, just thinking in terms of staff, the heavy build and once operations start?

Yeah, good question. The consideration around the Pilbara, it certainly will have the labour pool of... Let's not say the labour pool, but the expectation... of trades up there may be a bit different. If you consider our current operations in Kalgoorlie, we have a large residential workforce. So when you tap into that fly-in, fly-out workforce going anywhere, particularly Pilbara, but I believe that that's all absolutely being considered in the definitive feasibility studies, assumptions, et cetera, that DeGrave published. So I'm not concerned that's going to be uh changed i think it's accurate and it's been uh being considered um and it's yeah it's what feeds into it so and i think the other the other part is just there's been relief across labor in the state uh in the rest of years so i think that that's also assists in you know just keeping that normalized and not not continuing to ramp thank you um and i was also just curious on the uh on the dei front um

I don't believe Northern Star has like a workforce gender diversity target, you know, set as such. Just thinking, you know, you're obviously increasing scale, you know, assuming that the DeGray deal goes ahead. And then just sort of the rhetoric coming out of the US regarding DEIs, a lot of sort of moving pieces on this. I just wondered where Northern Star was sort of at, you know, with targets and your approach to this subject sort of on the whole.

Yeah, so we've always fostered inclusion. So our focus has been on creating inclusive workplaces and considering where it's difficult or challenged or there's barriers and work to remove those and bring that in from an inclusion perspective. I've never worked from pick a number. So, yeah, we've got team inclusion across our company with workforce suggestions like we do, say, safety reps that go and feed into that information to improve safety policy and procedures. So, yeah, multiple years driving that through our culture. So I don't see us pivoting or changing related to Other global views, it works in our company. We're pleased with it and our attitude is to always be improving it like we do on the safety front. I think it's still got work to do obviously and we think about it.

There are no further questions at this time. I'll now hand back to Mr Tonkin for closing remarks.

Great. Thank you so much for joining us on the call today, and I look forward to updating you all as we continue to advance our profitable organic growth strategy. So have a great day.

That does conclude our conference for today. Thank you for participating. You may now disconnect.