Northern Star Resources Limited

Thank you for standing by and welcome to the Northern Star September 2025 quarterly results call. 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 thank you for joining us today. With me on the call is our Chief Financial Officer, Ryan Gurner, and our Chief Operating Officer, Simon Jessup. As we confirmed this morning, for the September quarter, we sold 381,000 ounces of gold at an all-in sustaining cost of Australian dollars, $2,522 an ounce. The quarter delivered a mixed performance across the portfolio. but our Kalgoorlie production hub performed very well, led by KCGM, where we maintained elevated production and development rates. Also, pleasingly, costs for the quarter were better than forecast, reflecting our efforts on containing spending and continued focus on capital discipline. Despite the mixed production results for the quarter, we remained well positioned to deliver our four-year guidance of 1.7 to 1.8 million ounces of gold sold at an all-in-sustaining cost of $2,300. AU$2,700 an ounce. The KCGM mill expansion remains on track for commissioning in early FY27 and significant progress is underway for this exciting step change to the operation. This week we received ministerial approval from the WA Government for the Finsden South project and associated infrastructure, which supports high future throughput and long-term cost efficiency at KCGM to deliver sustainable high margin ounces. We've also seen a consistent uplift in production rates from both the open pit and underground operations of KCGM, which Simon will talk to shortly. With consistent primary oil feed and the significant 3 million ounces of stockpiles ready for processing, we're on track to maximise mill utilisation and deliver on our production growth targets there. The group underlying free cash flow of $14 million reflected investment outflows relating to the KCGM mill expansion project, returns to shareholders of $416 million in dividends and $67 million in tax instalments. Our investment-grade balance sheet remains strong with a net cash position, and as the KCGM mill expansion is in final build year, we're poised for increased production and lowering spending, whilst our hedge delivery schedule also declines and provides greater leverage to spot gold prices. This outlook is very favourable towards growing cash flows in the near term, To operations, earlier this month, two separate events occurred at our Jundi and South Kaguli operations that will see an estimated impact to December gold sales of up to 20,000 ounces. The effective volumes will be scheduled for processing across the remainder of the year. Simon will provide further detail on both these events shortly. And I am proud for the team's swift response to safely restore the operations as soon as possible. As I've already said, the company remains well positioned to deliver our full year guidance, with stronger grades expected at KCGM in the second half, along with improved volume and great performance across the broader portfolio. Combined with growing leverage to gold prices and ongoing cost records, we are firmly aligned to our purpose of delivering superior returns for our shareholders. Now I'd like to hand over to Simon Jessup, Chief Operating Officer, to discuss the operational highlights.

Thank you, Stu, and good morning. The Kalgoorlie Production Centre delivered a strong quarter. At KCGM, our largest asset, production met expectations while cost came in significantly lower, reflecting the team's disciplined approach to cost and capital management. Underground oil volumes reached an annualised run rate of 2.9 million tonnes, with lower grades attributed to its step-up in development activity. Our Northern Star Mining Services team delivered 8.7 kilometres of development for the quarter, up from 7.5 in the June quarter, an outstanding effort by the team. Open pit ore volumes and grades were in line with expectations and ahead of last year. Productivity is set to further improve with Golden Pike North returning to one mining level ahead of schedule, reinforcing our confidence in achieving KCGM's FY26 production target of 550,000 to 600,000 ounces. KCGM milled tonnes delivered an annualised run rate of 11.6 million tonnes. notwithstanding a major planned shutdown during the quarter. For FY26, mill throughput is forecast to be 12 million tonnes, with mill grades expected to lift for the remainder of the year. As Stu mentioned, we had an event at South Kalgoorlie earlier this month. After 60 millimetres of rain, a wall slip occurred in the historic open pit, temporarily affecting infrastructure for the underground mine. The main portal to the underground operations remains unaffected. A return to normal stoping is expected during the quarter. Let me close on the Kalgoorlie Production Centre by sharing how pleased I am with the progress on the KCGM mill expansion. Over recent months, construction has advanced significantly and the project is now moving into electrical and piping installation. Through the remainder of FY26, we'll transition into the final stages of construction, including finishing works, fit-outs and commissioning and testing. Turning to our Yandall Production Centre, the highlight for the September quarter was the milling performance at Thunderbox, achieving an annualised record throughput of 6.7 million tonnes per annum, exceeding the 6 million tonne per annum nameplate capacity for a second consecutive quarter. The cost environment across Yandall remains challenging and we continue to pursue cost initiatives wherever possible to mitigate pressures. At Jundee, gold sales of 55,000 ounces came in below plan due to lower stoke grade ore at both Jundee and remote, which was also impacted by lower recovery. We expect similar grades through the December quarter, with improvement anticipated in the second half. Development at Griffin is progressing ahead of schedule with first ore now underway, unlocking future access to higher grade stoketons, a great effort by our Northern Star Mining Services team. As Stu mentioned earlier this quarter, a localised structural failure occurred in the crushing circuit at Jundee. The team has acted swiftly, enabling operations to resume within two weeks. At Thunderbox, I am very pleased with the mill's performance, exceeding nameplate for the second straight quarter. This strong throughput helped offset lower grades from the Aurelia open pit, which are scheduled to improve in the second half. Meanwhile, open pit mining at Bannockburn ramped up significantly, with first ore expected to feed the mill in the second half of FY26. Finally, turning our attention to POGO. At POGO, the underground mine and mill operated an annualised run rate of 1.4 million tonnes per annum during the September quarter, despite a planned major mill shutdown. A fantastic effort by our US team. Mine grade was affected by sequencing, but is expected to improve over the remainder of the year. The mill continues to focus on recovery optimisation, achieving 87% recovery despite lower head growths. Development of the two new portals is progressing well, unlocking access to the central veins and good parts to systems. Most supporting infrastructure is nearly in completion, with the portals also set to improve ventilation and haulage efficiency across other areas of the mine. Mine development averaged 1,664 metres per month, exceeding our 1,500 metre target. Let me finish by reaffirming that we are on track to deliver our group production guidance of 1.7 to 1.85 million ounces. The June quarter is forecast to be the strongest as key growth projects reach completion. Across the business, our team remains and continues to have a sharp focus on cost and capital discipline. I would now like to pass on to Ryan, our Chief Financial Officer, to discuss the financials.

Thanks, Simon. Good morning, all. The company is in a great financial position. Our balance sheet remains strong in a net cash position of $616 million, with cash and bullion of $1.5 billion at 30 September. On a net mine cash flow basis, the business generated $183 million, thanks to higher gold prices and prudent cost discipline. Figure 8 on page 10 sets out the company's cash and bullion movements for the quarter, with key elements being the company recording $751 million of operational cash flow, net of $67 million in income taxes paid. After deducting capex of $614 million relating to plant and equipment and mine development, $59 million in exploration and $64 million in equipment, finance and lease costs, quarterly free cash generation was $14 million. Looking ahead, operational free cash flow is expected to rise, with increasing production at Casey Gem from Golden Pike North and ramp up of underground production. Continued solid throughput at TBO, with increasing grade planned and increased throughput and grade at PODO. Also during the quarter, the company paid its FY25 final dividend, totalling $416 million. Our growth projects and exploration plans are tracking well. Major operational growth capital investment includes a KCGEM open pit development at Great Boulder and underground development at to lift production over the coming years, and at Thunderbox, open pit development at Aurelia and Bannockburn. In respect of the KCGM growth project, $196 million was invested during the quarter, with major progress in structural and mechanical installation. As Simon mentioned, electrical and piping installation is now underway, with final construction, fit-outs and commissioning to follow throughout this year. The spend profile is forecast to decline over the financial year with the completion of procurement, with forecast personnel and plant and equipment demobilising commencing in the second half. At our HEMI project, $41 million was spent advancing process plant design, securing long lead time items and progress on non-processing infrastructure. On other financial matters, Q1 costs track to plan, with our teams remaining disciplined with cost and capital decisions. Q1 depreciation and amortisation is within the full-year range provided of 875 to 975 per ounce, and non-cash inventory charges for the group are a credit of 34 million, driven by low-grade stockpile build and higher ore stocks and golden circuit at Casey Gem and higher ore stock value at Jundee. From a tax perspective, We maintain our full-year cash tax guidance range of $700 to $835 million, with two-thirds expected to be paid in the first half. Landholder duty for the de Grey and Saracen transactions are estimated at $200 to $300 million. Payment is expected over the next six to 18 months. And a reminder, the company will pay its semi-annual coupon payment and annual insurance premiums in the next quarter. the company's committed hedge position at 30 September is 1.275 million ounces at an average price just over Australian $3,300 per ounce. I'll now pass back to Harmony for the Q&A. Thanks very much.

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 and if you're on a speakerphone, please pick up the handset to ask your question. Your first question comes from Daniel Morgan from Baron Joey. Please go ahead.

Hi, Stu and Tim. My first question relates to costs, really. You've said costs were lower than planned and it looks like lower than market expectations. How much of this is lumpiness of spend, you know, noting that sustaining CapEx, you know, your run rating 576 versus 750 guidance, obviously CapEx can be lumpy. Yeah, just wondering how much, you know, what initiatives really drove this cost outcome, how sustainable it is, and how much is it just, you know, lumpiness? Thank you.

Yeah, thanks, Dan. What we want to be careful to do is to not defer important sustaining capital that creates any future issues. So there's a fine balance there, but what it means is really very strict focus on expenditures, necessary expenditures. that obviously also support the full-year guidance. So, yeah, pleasing to see that work and pleasing to see where even on the low-ounce quarter where the cost came in and we see that those unit costs improve throughout the year, helped with just maintaining that cost but also growing the production base. we see ability to sustain the unit costs and improve on them. There is a big structural change in that cost base as we turn on Philiston next financial year, but it's important. This year's another investing year, so it's very important we keep that discipline, that focus, optimisation across it.

Thank you. And then just with the production plans, I mean, you flagged this 20,000-ounce impact in the December quarter. I mean, reading the notes, it appears that you think some of this will be caught up through the year, or can you just, I guess, expand on the production impacts and whether they can be caught up?

Yeah, so essentially the impacts of the operation has been sort of downtime. We're able to do other productive work and just re-sequence mine plans. The team's been fantastic at being able to do that. Mining activities continue, so it's really just mill disruption at Jundee, which we can absolutely catch up on. So hence we've sequenced that into the second half of the year. Down the south of Karagoolie, you know, its contributions, low volume, high grade, and some development activity, ground sports continuing whilst we're get the second egress re-established and then production turns back on. So at this stage we've said up to 20,000 in this quarter, but essentially it just gets deferred, not lost.

And last question, just looking at the key drivers across the business in terms of production outcomes in the quarters ahead, what are the key drivers and what is the expectation towards the December quarter key drivers being, you know, tons grade. Obviously, you're not going to have any mill outages apart from what you flagged at John Dee this quarter. Can you just run through that?

Yeah, thanks, Daniel, Simon here. So the biggest, the big key driver is getting the Golden Pipe North down to the one bench. So it's taken us the Q1 to get us down to the 600 bench at golden pipe north so now we've got the east side and the west side all at one level we're on top of where all the ounces really kick and that low strip ratio for the rest of the year so Even KCGM down in Golden Pike we averaged a strip ratio of five to one and that will just decrease over the rest of the year but the hard work has really been done so we are set for the for the jump. What I'm really pleased about is that the team has done it earlier than planned so that sets us up really really well for the jump for the next few years not just the quarter for So that's the biggest lever. Across the rest of the group, there really is Yandal, has some higher grade ore coming in from open pit sources in the second half, as well as increased grade contribution at Thunderbox from the undergrounds. And over at Pogo, it's returning to, you know, around the average of the reserve grade. So the average quarter four and quarter one, we're bang on the reserve grade. Q1 was lower. So it's really getting back into some better areas at Pogo, primarily in the second half. So they're the key levers across the business that we see.

And sorry, I imagine Golden Park, is going to be skewed or weighted to the second half of this financial year?

Well, Golden Pike now, we're slightly ahead of plan in terms of we're on the one mining level. So the large ounce contribution from Golden Pike North, which we spent numerous years getting to, we're there now, which is positive.

Okay. Thank you so much, Stuart and Tim.

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

G'day. Yeah, thanks for your time. Maybe I could just pick up on that Golden Pike North piece. Thanks, Simon. So will we see materially high grades start coming through from the open pit at Casey Gem this quarter? Are you seeing them now?

Yeah, correctly. We're seeing the grades increase, but it's not just the grade, it's the volume. So the grade's always been there, but we haven't had the volume piece with it. So we now see that strip ratio just declining. We're back on one efficient bench on both sides of the pit. And, yeah, you'll see the grade climb at Casey Gem. I think we guided at the site visit for Q1 grade process to be 1.2 to 1.4 grams per tonne, and we averaged 1.4 for the quarter. So you're starting to see that grade jump up at Casey Gem.

Yeah, nice one. Thank you. And can I just ask a question around Hemi? Maybe just sort of... sort of timelines there you're expecting. And I think maybe there's been some comments around a sort of two-and-a-half-year build. Have I picked that up correctly? Just, you know, how do we think about the next steps forward there later in the financial year?

Yeah, thanks, Levi. Yeah, the two-and-a-half-year build essentially is... I guess, the commentary from the DFS and accurate. We, you know, basically say for six months of engineering and work and then, you know, a really two, two-plus-year construction. What's happening right now, obviously, is the approvals are still pending. Working with all stakeholders to advance any needs that are there. We expected that in the March quarter approvals could be met. Then we were going to refresh pricing. to make sure that we update all the pricing with all the counterparties and put that in front of our board for a final investment decision during the end of this financial year. So I think what I'd explained was that... The build, likely, we want to see KCGM turned on, contributing, you know, production increasing there, sort of seamless ramp-up and without the capex spend, and then neatly dovetailing the commencement of Hemi construction, things can overlap as far as, you know, approvals, long lead items, expenditure, preparations, design, et cetera. But it's probably important that the transfer of knowledge from KCGM goes with the Hemi build. So, yeah, it's the second half, the late and second half updates on that. But really, we still need approvals before we can advance on, you know, turning earth and doing things up there.

Yeah. OK. Thank you. Thanks, Stu.

Thank you. Your next question comes from Matthew Friedman from MSD Financial. Please go ahead.

Sure. Thanks. Morning, Stu and team. A couple of questions on various undergrounds. Maybe firstly at Chundee, Simon mentioned the disappointing grades during the quarter, running at about 2.5 grams a tonne, whereas I think your reserve grade's close to 4 grams a tonne. That asset seems to have fairly consistently underperformed the reserve grade, at least in most of the recent quarters. Can you point to any perhaps recent grade control drilling or otherwise, I guess, what gives you confidence that those grades are going to improve in the second half of the year, as Simon alluded to? Thanks.

Yeah, thanks, Matt. So where we're seeing the grades start to increase back to a higher number at Jundee really is from the Griffin area to the north, and the development in that part of the mine is actually ahead of plan. So that's really pleasing. That gives us access to some better stope grade. So it's mainly the average stope grade in Q1. We just didn't have access to the right areas to get that typical hiccup in grade that we get in Jundee. So that's one area and the other area really is a place called Plutus which we've been drilling for the last few years has some very good grade that we're accelerating our mine plan out to. So it's a combination of a number of different areas across Barton and Victor and Gateway and it's just that it's getting those higher-grade sources coming in. So everything else was fine in terms of development plan. Ramon is, you know, on plan. That's coming to the end of its life. So we'll finish that project over the course of FY26. But it's just timing of where those higher-grade soap tons come through to lift the average back up.

Got it. Thanks for that, Simon. That's pretty clear. And maybe a similar question then on the KCGM underground. You talked about the circa 3 million tonne per annum run rate being achieved in the quarter but obviously the grade a little lower due to the proportion of development. When does that sort of mix shift or in other words when do you reach that inflection point on development where you're sort of hitting both the tonnage and the grade coming out of the KCGM undergrounds? Thanks.

Yeah, look, what I was really pleased about was the 8.7 kilometres of development that we got for the quarter. So that's right in the rails of what our plan is for the 36 to 40 kilometres of development for the year. The grade will increase as Femiston starts to produce more stope dirt. So it's still heavy development focus, waste and all. But as the stoping contribution starts to increase, which it did throughout the quarter, you'll see that grade, that average grade start to come up. And then it's just a function of where we're mining at Mount Charlotte. So there's a lot of different areas there. But fundamentally, it'll return back to the average grade with volume. But it's the stoking contribution and the ramp up at Phimston is the main area that will start to lift.

Thanks, Simon. Any particular timing around that? I mean, obviously you said, you know, 3 million tonnes of volume this year, 4 million tonnes next year. Is that something close to reserve grade or, yeah, what's the sort of timing around that? Thanks. Thanks.

It's just incremental because as the mine keeps growing, that production is not going to be three exactly and then a jump exactly to four and a jump again exactly to five. So as the stoping areas and the mine starts to really be unlocked, then you'll just see an incremental growth in production as well. I understand.

Okay, thank you for the additional detail there Simon.

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

Morning all. Firstly, can we spend a little time at Jundi? Can you help me understand the impact on the crushing circuit? So you've reconfigured it into the SAGNL. What's the cost and timeframe to return it back to the sort of designed flow sheet?

Yeah, thanks for that. The processing is back running at Jundee again. So we've had around two weeks where we've had to pause, stop. It's the access to the infrastructure has failed for the conveyor belt that feeds the sag milk. So we've now got going, again, in terms of feeding that and isolated the course or stockpile area. And now we can take our time to get that rectified over probably the remainder of this quarter. It'll probably take a couple of months to actually fix that. But in terms of crushing, we can still crush that. crush the material at the front end of the circuit and we can still mill the material through a revised change on the conveyor setup at the back of the circuit and now we've isolated that particular area and we'll work on the fastest fix we can for that infrastructure okay so it's sort of that that's the 10 000 ounce impact and then potentially a little hit to operating costs as well over the same time period

Yeah, it's the operating cost at the moment. It's that engineering rectification remediation work on the coastal stockpile infrastructure that will be a bit of an unknown, but it's, you know, talking 5 and 10 million, you're not talking, you know, 50s and 100s, right?

Yep. Yep, cool. Thank you. And then my second question just relates to Hemi, and you've given us, obviously, a bit of an update there, but... Specifically on the negotiations with the traditional owners, how are they progressing? Do you have a rough timeframe of when you would expect those to be concluded?

Well, there's engagement with all stakeholders, again, traditional. well together, but equally across all stakeholders there. And we set out that in the March quarter was essentially all the feedback loops that occurred to regulators to consider all those things and any conditions related to approvals. So, yeah, that's all on track and been pretty patient with all that to make sure it's done well. Okay. Thank you.

That's it for me.

Thank you. Your next question comes from Hugo Nicolacci from Goldman Sachs. Please go ahead.

Morning, guys. Thanks for the update this morning. I just want to dig in to the cost at KCGM a little bit more. It looks like the open pit mining cost has started to normalise back to about $8 a tonne. The underground cost is tracking around that $40 million a quarter in terms of spend. Are you able to just comment sort of directionally, you know, what those rates should be going forward for the rest of the year? Should we see the open pit continue to improve and the underground sort of just pick up as you do more development?

Here you go, it's Ryan here. Yeah, look, overall operating costs per tonne are a bit lighter than that. They're around currently $6 a tonne, just under, actually, it's $5.95. Probably expect, as Simon said, as we, you know, on that one bench at GP North, we expect efficiencies to improve there. And then as we get into Ivanhoe with the approvals now, you know, the cost per tonne out there is even lower again. So we expect those to improve. And as Simon said, with the incremental, with the ramp-up on the underground, which I think the costs are going pretty well there, should see some improvement there too.

Yeah, here you go, Simon. I think what you'll see is the run rate has stabilised in the open pit, and we've had two quarters at 22.5 million tonnes mined, so it's getting more efficiencies into that, but... That's a 90 million tonne annualised run rate. So we see that as around where we're going to sit. And now as we've got the approvals from Section 38, we're going to gradually get more volume from Ivanhoe, which is obviously a shorter haul. less powder factor, et cetera. So the volumes will stay around that 90 million, but we see positive momentum in the efficiencies at Casey Gym. And with the underground, it's a little bit like the previous discussion. As the stoking dirt increases at contribution, you'll certainly start to see the average cost per tonne for the undergrounds start to come down because we're getting... in particular. So pretty pleased with where we're sitting at the moment.

Fantastic. That's all positive from a cost piece. And then just on the processing side, it looks like the processing costs have sort of stayed at that $41 a tonne from last quarter. I think sort of six to a month ago that was more like loaded at $30 a tonne. Is that just the rate now going forward as the mill sort of approaches end of life and How should we think about as the expansion comes online? I think historically you've talked to a $7 a tonne reduction. Should we be thinking about numbers potentially then bigger?

Yeah, it's a really good point. We averaged about $33 to $34 a tonne at Casey Gem for the quarter. But certainly as we're getting to the end of that life, the mill and the process plant from a structural perspective has had its day. So I'm really, really looking forward to getting the new processing plant and I absolutely do feel that gap has signified significantly widened from when we put out the original Casey Gem feasibility final investment decision. So we've seen, you know, things like cyanide and other things cost increase across the group. But in terms of the maintenance costs and operating, you know, the 30-year-old plant at Casey Gem, that gap has widened as it's coming into the last year of its life. So good opportunity.

Yeah, it sounds like potentially some significant room there. But one more if I could, just on the corporate overheads piece, that just seems to have increased across most of the assets versus the run rate over the last two months. Can you just comment on what's driving that and if we should expect that to normalise going forward from this quarter?

Yeah, here you go, Ryan. Look, obviously we've picked up our de Grey teams is probably part of that. And then there's been, you know, a little bit more addition around the technical and some of the operational piece here in the business. It'll, from a, you know, per ounce perspective, it'll reduce because, you know, this is our lowest ounce quarter. But from a fixed cost perspective, it's probably, it'll probably continue throughout the quarters ahead, but on a cost per ounce reduce.

Thanks, I'll pass it on.

Thank you. Once again, if you do wish to ask a question, please press star 1. Your next question comes from Andrew Bowler from Macquarie. Please go ahead.

G'day, Shuntay. Just one on costs from me. From memory, Northern Star has a gold price linked staff incentive scheme. I was just wondering if the recent gold price lift is something that can be accommodated in the current guidance for this year and And if so, is there any sort of lumpiness to expect in those payments over the year that might be meaningful for us? Yeah, thanks, Bola.

Andrew, it did scale as the gold price ripped up $3,000, $4,000, $5,000, $6,000 an ounce. So that's been at a full rate for a number of years. So there's not compression, I guess, or bounces as a pullback in gold price at the moment. So it's fairly sticky and embedded into, but it is a very strong reminder of what we're enjoying at levels of still above $6,000 an ounce. It's not something that's a spring related to any of these pullbacks. What we're enjoying is still, if we look back at our resource reserve pricing and overall cost structure, it's really around our productivities, our production increases, the capital wind down and the structural change of KCGM that's going to make the big difference to migrate us down the cost curve. It's not going to be chips and savings on unit labour costs. It's going to be on efficiency from that labour, productivity from that labour.

Understood. And maybe just one more on the labour force. I mean, obviously, there's been some articles written about, you know, the strength of the gold sector in Western Australia, but obviously some other resources industries are suffering a little bit as well. Is there any broad comments you can make about the state of the industry at the moment, how you're finding, you know, availability of skilled staff? Is there another level of tightness coming or is it very much been offset by some weakness elsewhere?

Yeah, I don't see that tightening of those labour markets putting pressure on wages. What I see is cost of living put, you know, expectations and pressure on, you know, what people are feeling generally, and that's not just here, that's also in Alaska. It's pleasing to see WCPM promoting ties to the US to get, you know, new metals business growth. That will take a lot of time before there's any kind of pressure from those new markets if there's growth in investment in that phase. But what we need to do is turn around attractiveness of investment back into Australia. So that's very promising in that regard. But equally at the moment, we're not, you know, gold's in its own lane and we're focused on the things that are in our control.

No worries. That's all from me. Thanks, guys.

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

Right. Thank you all for joining us on the call and I appreciate your interest in our company today on what is a very busy day. So thank you and have a good day.