Northern Star Resources Limited

Thank you for standing by and welcome to the Northern Star December 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 Chief Financial Officer Ryan Gurner and Chief Operating Officer Simon Jessup. As previously announced, in the December quarter, gold sold totalled 348,000 ounces at an all-in sustaining cost of AU$2,937 per ounce. A number of one-off operational events across our assets resulted in this softer performance and required us to revise FY26 production and cost guidance. With these events behind us, our team remains firmly focused on driving productivity improvements and strengthening cost discipline to deliver a stronger second half for our shareholders. Our FY26 outlook provides revised guidance of 1.6 to 1.7 million ounces of gold sold at an all-in-sustaining cost of $2,600 to $2,800 an ounce. Today, we also provide further detail for production and ASIC guidance by Production Centre. In addition, we have updated our capital expenditure forecasts across the portfolio. Operational growth capital guidance remains unchanged at $1.14 billion to $1.2 billion. ACGM's growth capital expenditure in FY26 consists of several projects designed to prepare the operation for commissioning of the newly expanded mill from FY27, and two aspects which I'd like to highlight are the KCGM Mill Expansion Project. FY26 capital expenditure is now expected to be in the range of $640 to $660 million, and this reflects targeted increases in labour to ensure the commissioning in early FY27. Also, the KCGM tailings dam activity is ahead of schedule, with FY26 spend now expected to be $240 to $260 million. while FY27 forecast spend is lighter at $100 to $120 million, which this represents approximately 10% reduced cost for the overall tailings dam project. And at HEMI, forecast spend is $165 to $175 million, reflecting more optimisation of engineering and design works there. Northern Star continues to work closely with state and federal regulators, key stakeholders and the broader Pilbara community. With gold price now exceeding $7,000 an ounce, it is an outstanding time to be producing and discovering gold in the stable low-risk jurisdictions of Western Australia and Alaska. Our balance sheet remains in a net cash position, and as our hedge book decreases, our growing exposure to spot gold, coupled with increasing production, positions us for very strong increasing cash flows going forward. I'd now like to hand over to Simon Jessup, our Chief Operating Officer, to discuss...

Thank you, Stu, and good morning. The Kalgoorlie Production Centre delivered a lower-than-expected quarter driven by two main issues. The first issue was the previously announced partial suspension of mining at our Kalgoorlie operation. A new escapeway was mined and installed over nine weeks. Mining at Kalops from mid-December has returned to normal operations. The second major issue was the lower-than-expected processing outcome at Casey Gem. The mill underperformed all quarter on throughput, volume, both rate and run time, with the primary crusher failing in December. Since the 5th of January, the crushing circuit has performed in line with normal expectations, and we've crushed over 700,000 tonne in 20 days, versus December's full month crushing performance of 600,000 tonne. Casey Gem's total mining performance was announced ounces mined in the quarter, a new record for the site under Northern Star Resources ownership. Open pit total material movement was 22 million for the December quarter and 45 million for the first half, at the top of the 80 to 90 million ton annual guidance range. The open pit for Q2 mined 163,000 ounces at 1.5 grams per ton. with Golden Pike's contribution of 117,000 ounces at 1.7 grams per tonne. The Casey Gem underground operation developed 8.7 kilometres for the quarter and mined 819,000 tonnes of ore. For the first half, the underground ore mine was 1.55 million tonnes above the annualised target of 3 million tonnes per annum. Due to the processing throughput issues, KC Gem finished the quarter end with 1.3 million tonnes at 1.9 grams per tonne and 81,000 ounces of high-grade ore on the ROM pad. Carousel Dam performed in line with expectations for the quarter and a half. Let me close on the Calgary Production Centre. continued well over the Christmas New Year period, with a workforce of around 350 people. The project has ramped back up to 800 plus personnel and for the remaining six months will finalise on construction and transition into commissioning and ramp up planning, with the project remaining on time for an early FY27 ramp up. Turning to our Yandall Production Centre, both Chum Dee and Thunderbox experienced a challenging quarter and first half. At Chum Dee, the previously announced localised structural failure of the crushing circuit works had progressed well, but it has taken longer than anticipated. The Coors Ore Stock Bowl Tunnel has been excavated, rebuilt and reburied. with ROM pad loaders feeding the bin again as normal. The full completion of the tunnel works is on track to be restored by mid-February. The Jundee team has actioned these works safely and professionally for an extremely large job. The Jundee airstrip is also less than two weeks away from its first flight and remains on track for flight savings and less rain interruptions going forward. At Thunderbox, two issues prevailed for the quarter. The first one, reduced throughput due to tank issues, which also impacted recovery by 5%. Less mined ore from Aurelia, and the haulage of the high-grade ore to the mill. On the processing impacts, all tanks were back in operation at the quarter end, with rectifications planned for H2, which will see us cycle through the seven tanks. Secondly, on Aurelia, the resource is not performing as modelled and mined in the high-grade areas of the ore body. We have already reduced the mining fleet from 17 trucks to 11 trucks in order to manage the required mining practice changes, improve mining and cost efficiencies. The Aurelia open pit strip ratio reduces from here on in. Aurelia has an estimated life of 21 months and will generate 215,000 ounces at 1.4% grams per tonne. Meanwhile, open pit mining at Bankburn ramped up significantly, with first ore being stockpiled ahead of milling in H2, providing another ore source close to the Thunderbox mill. Finally, turning our attention to the lower gold sales was impacted by lower head grade of approximately 0.5 to 1 gram per tonne. due to a combination of stoke dilution and ore loss. Volume of ore was also approximately 30,000 tonnes less due to East Deep's fan constraints on scheduled high-grade areas of the ore body. And we also lost about three days in December due to extremely cold temperatures below 40 degrees Celsius. Early in January, we have seen an improvement in mine grades above six grams per tonne and an increase in stope or firings. Processing performance for Q2 was very good, with availability averaging 92% year-to-date. The recovery was 86% during the quarter, 5% higher than expected. Development continued to improve at Pogo, with 5.2 kilometres achieved for the quarter, corresponding to a monthly average of 1,731 metres a month. The quarterly performance on gold sold was impacted by a number of significant events across the portfolio, which has resulted in lowering our annual gold guidance between 1.6 and 1.7 million ounces. We are in a much stronger position as we enter the second half of the year. Casey Gem and South Kalgoorlie operations have returned to normal. Jundi has some outstanding issues that are expected to be resolved during this quarter. And Thunderbox is in improved shape, And at Pogo, we are seeing the December improved head grade continue into January. I would now like to pass to Ryan, our Chief Financial Officer, to discuss the financials.

Thanks, Simon. Good morning, all. As demonstrated in today's quarterly results, the company remains in a great financial position. Our balance sheet remains strong. It's set out in Table 4 on page 10 with cash and bullion of $1.18 billion. and we remain in a net cash position of $293 million at 31 December. The company has recorded strong cash earnings for the first half of FY26, which is estimated to be in the range of $1.06 to $1.11 billion. A reminder that our dividend policy is based on 20% to 30% of cash earnings. Although Q2 was a challenging quarter, All three production centres generated positive net mine cash flow with capital and exploration fully funded. Figure 8 on page 11 sets out the company's cash and bullion movement for the quarter. The company recording $738 million of operating cash flow which included the semi-annual coupon payment on the notes of $18 million US and approximately $30 million annual insurance premiums. Additionally, during the quarter, the company paid $370 million of the income tax, bringing the first half tax payments to $437 million, lower than the first half cash tax guidance. Major operational growth capital investments include a KTGEM open pit development at Great Boulder and underground development at Simiston and Mount Charlotte, which will enable us to lift production over the coming years. and its Thunderbox operations, open pit development at Aurelia and Bannockburn. In respect of the KTGM growth project, $180 million was invested during the quarter with major progress in structural and mechanical installation including sag and bore mill installation progress. Electrical and piping installation is advancing with final construction and sit-outs to follow throughout the second half. The project remains on track for commissioning early FY27. At our HEMI project, $20 million was spent advancing process plant design, securing long lead time items and progressing on non-processing infrastructure. On other financial matters, Q2 group all and sustaining costs included approximately $20 million of additional costs associated with the disruption events across Jundi, Cal Operations and Casey Gem during the quarter. Path 1 depreciation and amortisation is at the top end of the guided range of $8.75 to $9.75 per ounce and is expected to lower over the second half the forecast increase in production. Non-cash inventory charges for the group in the December quarter are a credit of $93 million driven by lower grade stockpile build and higher ore stocks at KC Gem and stockpile build at Thunderbox. From a tax perspective, the update to second half production we lower our second half group cash tax forecast to $230 to $270 million. No change to our estimate quantum or timing for landholder duties for the de Grey and Saracen transactions. And the company continues to unwind its hedging commitments with 158,000 ounces delivered during the quarter. At 31 December, total commitments equal 1.1 million ounces at an average price just over $3,300 per ounce. I'll now hand pass back to the moderator for the Q&A session. 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. And if you're on a speakerphone, please pick up the handset to ask your question. Your first question comes from Levi Spry from UBS. Please go ahead.

Hi, yeah, g'day, Stuart and team. A couple of questions, I guess, on CapEx, KCGM and then Hemi. So just so I understand, the increase in CapEx at the mill expansion, is that about more people? Is it about better people? Is it about paying more? Just so we understand, I guess, where the industry's at.

Yeah, thanks, Levi. Look, it's targeted and deliberate and it's to ensure we meet the commissioning timing of that FY27, so it's more people. And it's recognising, I guess, the productivity we've got out of the team that are there today. And it's not saying they're good or bad. It's just saying, you know, when everyone's working in that congested space, you know, we haven't made the progress on some of those things. So we were targeting around 600 people throughout the build. Simon just spoke to we retained about 3,350 over Christmas, which was normally when you shut down, and then... We've also run some back shift, night shift throughout the last six months and also we've come up now to 800 headcount working on that project. So it's targeted, deliberate. It's at a cost. Obviously, there's an uplift of about $110 million throughout this year, of which a large part of it's been spent in the first half. So there's a second half kind of tail end of all the electrical and cable runs. But really, it's important that we meet the schedule on time and get that commissioning and get the cash box working.

Yeah, got it. Thanks for the extra detail. And so could we have a little bit more, I guess, on that Gantt chart? So, you know, what is actually involved between, I guess, now and, you know, what activities specifically and then, I guess, what is required to hit 23 million tonnes in 2027?

Yeah, so the commentary sits above it. We talk about in the bullet points there, this is on page five of the quarterly, 90% of all the structural steel and 80% of all the mechanical installation is complete. So we're back to the tying in electrical cable runs and sort of testing and powering those things up. Obviously, there's an element of putting it all in place before you do any of that live live testing, and it's really the final coupling of all the pipe work. So we're well through the bulk of it, and it's in the right order. Nothing, I guess, is behind, but we're recognising the work ahead just needs that additional labour, which we're working with the contractors to source, and we were doing just prior to Christmas. So December, we started to increase numbers. We continued with it. throughout the Christmas period. But really, it gets down to that final tie-in, all the pipework, pressure testing, the cables, dead testing cables until we're ready to energise things. So, yeah, it'll be ready to power up in June. The question is whether we want the disruption. In the back half of June, typically, you won't get the extra gold sold because it all has to come through the float circuit and out through concentrates, et cetera. So we may be bringing up a parallel, but ideally in July the mill is running. 23 million tonnes represents a 27 million tonne per annum plant turned on and then deliberately turned off to do, you know, re-talking of bolts and just, you know, visual inspections on wear rates, et cetera. That's deliberate planned downtime throughout the year, which derates it from 27 to 23. But when it's running, it'll run at the 27 million tonnes per annum. I think that answered part of your questions.

Yeah, that's good. Thank you. And just one more on Hemi. So, like, permitting is still a pretty complicated subject for us. Can you just give us a bit more detail around what stage it's up to now and what happens next?

Yeah, so essentially, EPR approval is still going through their processes. You know, this financial year, we're expecting, you know, there's no... a way to fast track those processes with the regulators and it's prudent that they take the time. In parallel to that we're working on the water trials and dewatering testing and that's the engagement we're having with traditional owners and the like presently but all those things are progressing as normal. It's very, as you imagine, weather-wise it's the hot season so Laying pipe and doing works is a bit of a derated activity, as we used to do in the Northern Territory. Northern Pilbara gets pretty hot this time of year, so there's some of that activity we just sensibly laying pipe and getting the ballers ready for that throughout these months. But fundamentally, we're working towards the end of this calendar year to be in a position to be putting numbers together for fit. The extra expenditure is about the optimisation work, just continually testing the flow sheet and making sure we've got options and that when we put the data into the feed papers that we've thoroughly thought of all those combinations. One of the things you just keep looking at, you keep finding options and can find better work. So they were using the time wisely in that regard.

Thank you. Thanks for the detail.

Thank you. Your next question comes from Ben Lyons from Jarden Securities. Please go ahead.

Thank you. G'day, Stu and Simon. I just wanted to revisit the underlying reasons behind the recent changes to production or in sustaining costs, and I guess also CAPEX guidance, the three consecutive downgrades over the past couple of weeks, and maybe at the same time advocate for some greater disclosure from the company as well. So one of the reasons, for example, that was given for the production downgrade was the underperformance of Thunderbox, which is now sort of pitched as a 250,000-ounce mining centre rather than a 300,000-ounce mining centre. And specifically, those lower grades you're seeing originate from the Aurelia open pit. So I was just wading through the 600-page resource and reserve report, and I just can't find anywhere like a simple tonnage grade and strip ratio outline for those key ore sources, like Aurelia, like Bannockburn, for et cetera. And the same goes for, like, Karasu Dam and Jundi, like the actual ore sources that sit behind these mining centres. So the comments made by Simon in his introductory remarks are helpful, gives us some of the pieces, but just like to have a really basic outline of the ore sources that sit behind the actual mining centres, or, at the very least, a detailed investor day where we can do some deep dives on these assets as well. Just think that'd be... helpful to better assess the predictability of this business and the reliability of the forecasting that we receive, just a bunch of numbers from you guys at the head office level, just to go deep on these assets. So am I missing anything in that 600-page resource report that could sort of help with these basic metrics?

No, but I'll take that as a comment, not a question, Ben.

Yeah, okay, cool. Okay. Thank you. The question then... You've got the pivoted scrutiny on your continuous disclosure obligations. Why wasn't the crash and failure of KCGM immediately disclosed to the market? I would have thought that was a significant event in itself. To paraphrase your response to the ASX, it was basically we didn't get the data until the 1st of January. How regular are your updates from site to the head office in SUBI? I would have thought that you're getting daily updates on simple metrics like production and sales, but is it weekly? Is it monthly? Sure, it's not quarterly. Sure, you didn't have to wait until the 1st of January to know that you're going to downgrade.

So, Ben, there's a very comprehensive response to an aware letter from ASX. It's a very simple one-page disclosure around production on the 2nd of January. and a very thorough response to the ASEGs in regards to the query.

I think that addresses it. Yeah, okay. I mean, I've read it several times, but from my perspective, I don't think it's satisfactory. Like, I would have thought you'd get real-time data on sales at least weekly or monthly, like, not quarterly. But anyway, happy to go and have another read. Thanks.

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

Good morning, Stu. Simon Ryan. Just one on the updated cost guidance. It looks obviously good to see the revised cost guidance coming in line with the prior top end considering the gold price increases and royalties associated with that. But if I break that down nominally, you've effectively tightened the range and the midpoint of cost is pretty much unchanged despite highlighting earlier this month that the operational impacts, we're going to have a number of cost impacts. So I guess the question is, what operational and sustaining costs have you been able to defer into next year to be able to keep that cost guidance flat?

Yeah, thanks, Hugo. I think the key thing is that the one-offs and the events are behind us and we know the impacts and effects of those events. They're finite, they're complete. Obviously we've disclosed on some of the continuing things during the week one of January that are behind us now. So really this is the reset and the view of the forecasting of where the sites are operating at and the cost basis is allowed us to narrow the guidance range because we've got six months ahead, not 12. So that's really where that is at. It's a much stronger second half if you really look at what the second half will deliver, a significant step up. from quarter three in production. You're seeing our realised gold price, you know, it's improving, but it's still a long way off the spot because of the hedges, which are unwinding rapidly, and then obviously delivering into a higher spot. So coupled with, you know, increasing production, you know, the gold sales being the denominator of full and sustaining costs, the exposure to that spot by the cash generation over the next two quarters and the run rate exiting this financial year for another structural change of Finleston being turned on, positions the company into a very strong position. So it is, yes, it is future telling. It's forecasting. It's looking at what's in front of us. We would ask people to isolate quarter three. We have provided very detailed, you know, information around the events that were unforeseen or, you know, some are out of our control, some are... were risk balanced around maintenance events. Ultimately, they have been addressed. The team have done an absolutely fantastic job managing through that period and working on those items. And that gives us the confidence to place the forecast. On the full year, yes, there's a step up in cost. There's a step down in production. But when you look at the second half run rates, It's a very, very strong healthy business in that regard, and it can't undo what's happened in the first half, but ultimately we've got a very confident outlook.

Great. Thanks, Jules. Yeah, obviously taking sort of first half and the unprecedented impacts as they were, but sort of just to dig into that further, I mean, your ACE range is sort of now $4.4 to $4.5 billion for the year. It was $4.25 to $4.6 billion, You've highlighted $40 an ounce of that, or roughly $64 million at the low end is from royalties. So where have some of those other cost savings come from, though, sort of looking forward? And should we expect those costs to end up into FY27?

I think it's right. I think the costs are there, obviously. In the immediate term, all costs are fixed. So you're right to do the maths on the overall, I guess, checks written at the business. What we're saying is, And as Simon was talking to, you know, when he spoke, a lot of these disruption issues that cause production issues are behind us. We're confident in the grade outlook at Pogo, Jundi. Simon spoke about, you know, the high-grade material sitting on the wrong pad at Casey Jen. You've seen the grade list there. And then also, you know, the throughput confidence in this second half. So they all contribute to... keeping us aligned and narrowing that cost range, even with those, as you say, expected royalties. We're confident that in that range, 26 to 28, lands us with that lower production profile.

Any discretionary steps as well will be shoved and pushed because it's not only as a dollar million, but as far as activity and distraction, ensuring that the team have a very clear understanding simplified sort of activity list, that's what we'll do. So does that push a wave into FY27? We'll assess it at the time. We'll assess the balance of risk around planned versus unplanned maintenance, etc. But there were items that were budgeted that we will just strike off the list that will not get spent in the second half.

Yeah, got it. I guess the question was what are those items and how much of that spend, but maybe we'll pick that up later. Next one, just around the upward revision of HEMI CapEx. You've called out a more detailed review of engineering design work, so why CapEx this year is $25 million higher. But, you know, studies were originally to support an FID by the end of FY26. So is that just a bring forward of detailed engineering work that you would have otherwise had to do? Or were those not, you know, initially detailed enough for an FID timing as originally planned? And I guess how should we consider that in the context of I think market expectations for Hemi CapEx now are sort of $2.5 billion. I don't know if you would continue to expect it, but maybe there's a bit of creep there.

Look, yeah, I would say reset on the overall CapEx number. So saying, you know, if we're spending extra this year, it comes off the overall CapEx number. It's certainly work that's progressing. It would be required and we would be doing. But I'd also consider work that may have been spent. We would consider, okay, that's... That's redundant and we replaced it with new study work that's got an improved operating outcome or an improved flow sheet outcome. So I think we've got to be careful of saying extra money spent this year comes off the total. There's certainly items that were long lead items invested in spend forward that we'd also say perhaps we'll resell and repurpose. and replace with larger, simpler kits. So that's been something we've done with the time. That'll all come in a final kit paper on explanations in that regard. It's not material structural changes to the overall flow sheet. What we've looked at is synergies with the rest of our operations to have common parts, common spares, which, you know, wasn't considered when that's a standalone asset in a single asset company. We've looked at it through the lens of, you know, Fimmerston mill expansion, some items that could replicate. Save on the engineering because we've already done it. We've actually got to spend for the parts to get commonality, which will let DeRiscus in the future ready to sort of assist the plants.

All right, good. We might pass it on and run back. Thanks.

Thank you. Your next question comes from Matthew Freidman from MST Financial. Please go ahead.

Sure. Thanks. Morning, Stu and team, and happy new year. A couple of questions from me, please. Maybe firstly, can I take the thrust of Ben Lawrence's comments and maybe turn it into a question that hopefully you can actually answer on this call? In the release, you say you've reduced capex spend at Pogo and Kalgoorlie and increased spend at Yandle to support the regional hub strategy. Can I just ask, what is the regional hub strategy at Yandle? Can you summarise it in terms of, you know, production ounces, life, unit cost, and how much capital needs to be spent to deliver it? Because I'm not really clear on any of those things, and it sounds like maybe there's other analysts that aren't clear either, so that would be appreciated.

Okay, Matt. So there's a 3-million-tonne per annum plant in the north called Jundee, and there's a 6-million-tonne per annum plant in the south called Thunderbox. Higher grade ore will go to Jundee. Lower grade ore will go to Thunderbox. Jundee will sit at around 300,000 ounces per annum. Thunderbox will sit at around 250,000 ounces per annum. So the hub, which is called Yandle, will produce at about 550,000 ounces per annum. That's different. The 600 we've set, we've articulated that 550 is probably the happy place that that will be at. You might oscillate where Jundee does 250 and Thunderbox does 300. But overall, that Yandel Belt, we're saying, can operate at around 550. We've got the reserve statements. It's got all the trades and all sources, panic burns, Aurelius, funder. You've got all the data that sits behind that. That's fundamentally more than what any company is providing and giving to the materiality of what that asset provides for the group. The key aspect of those assets that we're not liking at the moment is the costs. So the economy as a scale from expanding Thunderbox was to materially improve the oil and sustaining costs, as is the growth at Jambi, was to keep the costs down. And you can see the cost for Gandall in the quarter. and a lower ounce profile are very high. So that's in our head to say, well, what's the overall outlook life? You know, we've got to improve this to ensure that its contributions, as it has been for a decade in our business, foundation asset, we can provide more view and colour on what those can be. But we're still building new high-grade mines and the development rates are still contributing towards that. Pulling out Aurelia and talking about decimal points of grade of something that's not even providing a third of the feed to Thunderbox for a number of years is immaterial and I want to focus on that. It's immaterial in the open.

I mean I didn't specify Aurelia and you've answered the question in terms of ounces and life but as you point out, I think probably the gap in understanding is really more around unit costs, expectations and also I guess the capital required to get there. I suppose, you know, the question that probably the market has is, you know, what's the quantum of capital you're going to spend in order to get the cost to a certain point? And I guess what does that look like? And I suppose, you know, we wonder out loud, how do you make those investment decisions when it seems like we don't have a good visibility on what the target is around cost and total quantum of capex?

So we provide production and cost guidance on a nice basis in July and that's what we've done for a long time and that's what we'll keep doing at Yandel. We've put in a pace plan that's getting into the higher grade at Jundee. It'll see some of the grade restore. All the commentary that sits around this asset shows the growth of Wunder down south, giving better grade into Thunderbox as well as the new Bannockburn operation. You're going through the stripping at the moment, getting into primary oil. Like, the questions we're not going to answer on a quarterly call, let's put it that way. No, that's fine.

I guess the theme there is that I appreciate that you guys give one-year guidance, but clearly the impact to the market's perception of the company from, you know, arguably some of these short-term disappointments from quarter to quarter, you know, potentially that impact is exacerbated because we don't have a, you know, a multi-year sort of longer-term picture for some of these elements of the business. So obviously anything you can do over time to, to shine a light on that is appreciated but I'll move on from that line of questioning.

Before you do that, the point is KCGM in the half one has really, really changed it and it's the MILF report that's really impacted the overall ability to deliver. All the other some of the small parts on a materiality threshold are negligible. I agree with you.

That's why I'm making the point that if you only give one of your guidance, it's exacerbated.

Please let me finish this answer. Everyone needs to focus on that asset, KCGM, and there's 82,000 ounces sitting on the ROM of high-grade ore ready to put through that plant. And the new expanded plant will be commissioned in less than six months' time. So if everyone wants to weave into smaller items across all the assets, we recognise that it was a poor quarter. We understand the elements that contributed to that. There were many. And we understand what we've done to rectify and what the outlook is going forward. I pick up the frustration from the questions and I pick up the frustration from investors or from analysts who can't model this. Quarter two is behind us. And that second half outlook is strong. And we will work very hard to deliver that. And where we position ourselves into FY27, we're in an excellent position. So I just want to reinforce, we're getting into minutiae, which is behind us and doesn't matter, and a materiality threshold. So think about the things that make a difference. HCGM is a key asset. That's where the focus and effort is today. It's not on these satellite small... small life, short things, but also generating significant cash flow that are actually contributing towards spending the capital at a long life by margin assets.

Yep. I apologise. Thanks for the answer. I apologise for cutting you off, Stu. I mean, I would say that the Yandel Hub is still going to be a third of your business, so I'm not sure that it characterises minutiae, but anyway, thank you for your response. The second question is just on the KCGM meal expansion. I guess it increases to the capital guidance there. You talked through in some detail around where that's going and why it's important to, I guess, stick to the schedule. Is there a risk there that, I guess, throwing more money and people doesn't really solve the productivity issue you're having? I mean, you talked about how it is a fairly condensed space there that your teams are working in. I guess the question is why are you confident that spending more is the right approach versus just taking longer to complete the project? Thanks.

Well, it doesn't solve the productivity issue. That's why you add heads. Add head count because you can't achieve, you know, if it's 600 people, so you throw 800 at it. That's the answer of productivity and you're paying more to get the same thing done. That's why there's $110 million extra. spent in this year to deliver that. The most important part is to plant on, getting all through it and step changing the assets, cost base and its revenue. Time is of the essence which goes to Jim, not capital sadly at this point. It's not sensitive to capital. We don't likely spend $110 million unnecessarily. We want to see this plant operating and starting to contribute.

Just to add a little bit to that. So during the next, really the next four months is where we've got the peak, peak banning. So we've ramped up, as she said, above what was originally the plan and that sort of progression started during Q2 in terms of accelerating the work. We've got still many, many work fronts at the moment. So we still have that opportunity to put those people in there. you know, three, four months from now, those work fronts start to wind down and we're very, very focused on the critical path, which is stage one, which is first over into the new mills. So while we've still got the opportunity, we've taken that and the project team has to put the extra people in there, get the work actually completed and that's the picture right now which gives us the ability to remain on schedule for FY27, like, you know, ready to go in sort of June. So if we didn't put those extra... Then the workfront starts to dry up and then it genuinely will be delayed. So the project is in really good shape. It's focused on stage one, and that is first of all into the mill. Stage two is moving Gidgee. back down to Casey Gem. That can happen in the months after we're milling all.

Got it. Thank you for the additional call there, Simon, and thanks for your responses. Cheers.

Thank you. The next question comes from Daniel Morgan from Baron Joey. Please go ahead.

Hi, Stu and Sam. So obviously a key theme of the call has been throwing a lot more bodies at the project to keep it on schedule. I understand that makes sense given the gold price and the project you're trying to keep on schedule. But do you still expect a July turn on? I mean, as the Gantt chart, I imagine the critical path, the turn on date, is it not shifting back? Is it not wise given recent changes? guidance and market disclosures, is it not wise to maybe start to push market expectations of the schedule of the turn-on back, or is this the expectation that this extra budget will keep the schedule to July? Thank you.

It's quarter one. My expectation is early quarter one, so obviously there'll be parallel running up at the plant. This isn't about market expectations. This is about our disclosures. a three-year build on time to the budget we're saying and overrun on that expenditure because we're throwing more labour at it. We're not here trying to gain this, Dan. We're here explaining where we're at two and a half years into a three-year build and Simon's got the confidence in discussing as well. We're very, very pleased with the progress being made and we're working very closely with the contractor that's constructing it and looking for any opportunity to get this done not only on time but earlier. And part of that combined solution is around adding headcount. And we don't just add it so they're standing around holding stop signs. There are people there doing productive work that's contributing towards that deadline. Yeah, that's what we're working towards. It's pretty exciting. I think the team that got around the plant at Diggers and Dealers saw a massive step change year on year. If you went there again today, you'd say, well, why can't you turn it on now? That's what you'd visually see. And it's no different to your building a house, wait for your carpets and your fly screens. All the cabling, all the tiling, all the final elements of that It looks like it's been finished and it looks like it's sitting there doing nothing, but it's that final, final finishing to ensure that when we get it turned on, the quality's met and the work's done so that we don't have to bring it down or we don't have to have those lessons that we learned out of the Thunderbox expansion. We endured 12 months of ups and downs and rectifying some of those things. We'd like to see all that addressed prior to turning and commissioning this on. So that's the work that's underway for the second half.

Thanks. And I guess obviously there's a lot of focus on the call and obviously, you know, concern about various aspects, but maybe pivoting and changing tack a little bit, like just over the last six months or so, you know, what is changing in the business that you can see that, you know, from a very positive sense, like what is something, you know, I'd like to invest as well as change or something that's getting better or, you know, be it exploration, be it a site, you know, what is changing in the business in a positive sense that you could highlight to the market?

Yeah, I mean, I'd recognise the underperformance in share price against the peers, global majors, you know, we acknowledge that. We acknowledge that there's reflection on short-term production misses, cost misses, and we've been very clear on the events that have contributed to that and what we've done to rectify that. Just look at the run rate of second half in its own right. Very, very strong uplift in production. Look at the reducing hedge book and realise gold price that we're growing exposure to spot and the step change of the business as KCGM Mill Expansion turns on in FY27 and the uplift again, step change in production profile for the group. They are the things that are so close to us that the opportunity for investors now to get in and get positioned, that's the confidence in the outlook and I see to your point, people are focused on here now concerns, they're looking at relativities.

creation that all the stars doing thanks very much thank you your next question comes from milan tomic from jp morgan please go ahead yeah hi it's jim thanks for the call uh just a question on the hemi permitting side of things um can you provide maybe a little bit more detail as to you know how that process is progressing have there been any issues specific issues that have been flagged by the Indigenous Nation groups in that area? Or, yeah, just wondering if you can give a bit more colour as to, you know, any concerns that might have been raised so far.

No, no major concerns there, Milan. It's really the dewatering trial is something we've got to commence, which will likely be in the start of quarter four. Ideally, we would have started that in quarter two, but there was a delay in getting all that infrastructure in place through the hot season. So once that's in place and we've got a plan that's acceptable, we'll commence that trial. It takes about three months, and that feedback loop goes into our 5C water licence for dewatering of the pits pre-production. So that's probably something that has slipped. It doesn't affect the overall state and federal API approval licences which are continuing but ultimately that's probably the operational part that we would have liked to have seen commence pre-summer and that's going to start March, April likely with the modified scheme that we've negotiated or are negotiating with traditional owners there.

Yeah, and just in terms of the work that you're doing on optimisation, any major changes regarding, you know, mine plan sequencing, et cetera, that you could share that's kind of been different from how that project was initially envisaged to be?

Yeah, so scheduling, so what we're going to look at is, you know, first goal, pour, and that deadline, even though there's a delayed timing of starting, to understand, okay, what impacts through to that. The actual flow sheet generally, we've looked at lots of different scenarios and options and defaulted back to what that primary flow sheet is with the high pressure grinding rolls at the start and set of sag mills is still sound. Restyling some of the gear, mills, et cetera, is probably something we've done with the ability to expand later on a more simplified plant. but all the order class and all that are already in trying to be built and long lead items like that are constructed. So that's all sound. Mining sequence, again, just around water management, around borough pits and getting that prepared. We've just got options and scenarios there as opposed to the one plan that previous owners had. We've just got a number of scenarios there that could go different paths to get to the same result. So that's just what the team are doing while the approvals are underway. is what they do best with the engineers.

Yep, thanks very much. And maybe if I can just squeeze one more in on John D. To get it to 300,000 ounces, you'd have to get quite a sizeable uptick in the grades compared to the last couple of quarters at least. Can you maybe just shed a bit of light? How are you getting that increase in grades? Are you moving into a higher-grade part of the ore body, or is there something else that we should be considering there? Thanks.

A mix of both. Properly, the throughput's not changing. So, yes, the average grade delivered to the plant needs to be there. It's been there before. We've certainly got isolated pockets that are different grades and different mining sequences. We've just added a paste plant, which allows us to go back up into the upper levels, original high-grade areas, and take those high-grade zones that were sterilised because it's just open voids. There was no paste in the mine in its history 30 years. It's never had any We've got that paste plant installed and starting to fill those voids. We can go back and take those high-grade pillars out of those upper levels. So there's areas like that, new Cook Griffin, mining zones, contributing better grade. So all those things contribute, but overall it is a grade focus rather than a throughput focus.

Great. Thanks very much.

Thank you. Your next question comes from Adam Baker from Macquarie. Please go ahead.

Hi to you. Just one follow-up for me, just on Hemi. I noticed you noted that in May 2016, you're going to have the optimized resource reserves. I'm just wondering, is there anything that we could be saying to see a quantum change in the resources or the reserves? noting changes like gold cross assumptions, et cetera, and likewise for reserves around cut-off grade, et cetera. You know, we'd do work integrating this into the Northern Star reserve and resources. Thanks.

Yeah, thanks, Adam. Look, I won't pre-empt, you know, things that happen with R&R. There's still a fair bit of work to occur in the coming months leading into that, but we'll basically release Hemi in a Northern Star view of R&R with the groups R&R. I would say, you know, Hemi had a high gold price assumption in what was previously released. So we'll try and align, you know, with the group overall where we set those gold prices for resources and reserves. They're almost irrelevant in regard to where the current spot price is and watching what peers are doing in gold price assumptions around resources and reserves. But it does in turn reflect back to cut-off grades and how these overall pit shelves are valued and can you actually merge, mould our pits together, take our saddles and make a bigger, larger overall lower-grade resource economic. That's what we've got to consider. But I would just say that we've probably got a stricter, more scrutinised view around what's in and what's out. So if anything, a more robust, you know, screw your eyes on that resource is more likely than, you know, some material growth. If you think about the drilling and the data that's occurring there, all we've really done recently is redirect some drills to do some trooping.

We haven't done any real growth drilling since we've taken control of that heavy region. That's great. Thank you.

Thank you. Once again, if you wish to ask a question, please press star 1. Your next question comes from Mitch Ryan from Jefferies. Please go ahead.

Hello, Stu and team. Stu, you made a couple of comments with regards to Hemi. You called it a sister plant to KCGM and you talked about taking the opportunity to resize mills. Does that potentially mean a change of scope of mill size relative to previously disclosed grain numbers? Can you help us understand that?

Correct. Ideally, things like the crusher, things like the mills, ideally are identical to what we have in Finleston and that's been currently our thinking. There's already some mills purchased. They're already sitting in a shed, packaged up in Port Hedland. I've literally seen them unloaded off the truck. I look at those and say they'll do the job of the 10 million tonne per annum plant. to get to a 15-minute tonne per annum plant, I'd need a third one. Would I consider, instead of doing that, having two large mills today that match Finleston? The answer's usually yes. So they're the sort of considerations we're doing to say, irrespective of owning some hardware that's sitting there in a shed, would we start again and say two large mills that match Finleston? What's the logic of that? In the scheme of reselling these things, There's options that are there. In a scheme of redundant expenditure, you can repeat the costs because you haven't installed them and they're ready to freight. That's the type of thinking that if you're in a hurry to build the mill, they would have got built and then when you want to expand, you add a new mill. When we look at that now with the time, say, well, let's just not go build something because we have the parts. Let's consider what we would do if we had a clean sheet. That's the example. Same as the crushing circuit. absolutely take the replica design from Phimiston and say, is that something you could install here that's oversized, that matches parts, et cetera, as opposed to going through something that's been designed specific for the throughput rate of HEMI, and we go to something that is the sister plant to Phimiston. That means if we have issues like Simon had in December at KCGM, We could be fast-tracking the knowledge and the skills and the parts across the business that every three or four years would happen at one of those large crushing units.

Thank you. I appreciate the call.

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

All right. Thank you for joining us on the call today and I appreciate the interest in that. It's been a busy day for everyone but looking forward to a strong second half and growing from here. Appreciate it. Thank you.

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