Northern Star Resources Ltd (ASX: NST) has reported its operational and financial results for the September 2022 quarter, with gold sold of 368,956oz at an all-in sustaining cost (AISC) of A$1,788/oz.
The September quarter performance was slightly below plan with delayed production expected to be recovered in future quarters (Thunderbox mill commissioning and Pogo grade). The company maintains FY23 production and cost guidance (2H weighted).
Australia, which accounted for 86% of production, achieved positive net mine cash flow after funding its capital requirements. Optimisation efforts continue at Pogo with FY23 regarded as a transitional year now that development metres are consistently tracking above plan. Going forward, the focus remains firmly on sustainably lowering Pogo’s cost base.
Highlights:
- Environment, Social and Safety (ESS)
- LTIFR at 0.7 per million man hours
- 11% reduction in potable water use at KCGM during FY22
- Jundee solar, wind and storage renewables project progressing (feasibility study)
- Production
- Gold sold totalled 369koz at an AISC of A$1,788/oz (US$1,228/oz) and AIC of A$2,361/oz
- September quarter performance by production centre:
- Kalgoorlie: 215,224oz gold sold at an AISC of A$1,762/oz
- Yandal: 102,562oz gold sold at an AISC of A$1,584/oz
- Pogo: 51,170oz gold sold at an AISC of US$1,581/oz
- Australian operations delivered in line with expectations; commissioning of Thunderbox mill continues with nameplate capacity expected 2H23
- Pogo continues to perform at nameplate capacity of 1.3Mtpa, sustaining 4Q22 mining and milling rates, albeit at lower than expected grades; improvements to underground infrastructure and grade increase due in 2H23
- Discovery and Growth
- Advancing five-year profitable growth pathway:
- Kalgoorlie: KCGM material movements delivered an annualised 82Mtpa (vs target of 80-100Mtpa until FY26), up 29% from the June quarter
- Yandal: Thunderbox mill expansion remains on track and within plan
- Pogo: Mill and mine ramp-up completed, progressing optimisation initiatives
- During the quarter, Northern Star spent A$182 million on growth capital and A$37 million on exploration
- Advancing five-year profitable growth pathway:
- Financial
- Strong balance sheet with net cash of A$173 million at September 30; cash and bullion of A$473 million
- Group net mine cash flow positive; capital expenditure fully funded across production centres
- Payment of A$155 million stamp duty as well as A$132 million final dividend
- Corporate
- Commenced A$300 million on-market share buy-back program (15% complete)
- Outlook
- Maintain FY23 guidance of 1,560-1,680koz gold sold at an AISC of A$1,630-1,690/oz (2H weighted)
- Maintain FY23 growth capital budget of A$650 million; exploration budget of A$125 million
Commenting on the September quarter performance, Northern Star managing director Stuart Tonkin said:
“The September quarter has delivered a solid platform to leave us on track to achieve our FY23 targets. Importantly, we have maintained a strong safety focus across our three production centres to ensure the physical and mental wellbeing of our people. From the December quarter, we will start the rollout of the Critical Risk Program, which reinforces an awareness of the systems and protocols associated with critical risks across our operations.
“While labour and cost pressures have stabilised in Western Australia, they remain at elevated levels and supply chains – globally – are still under pressure. Northern Star is positioned well with a highly dedicated and professional team to navigate what remains a challenging operating environment. Recent currency movements are expected to have minimal cost impacts in FY23 on our Australian dollar cost base, while our realised gold price in Australian dollar terms remained stable quarter on quarter.
“It has been another busy and successful start to FY23 as we work on executing our profitable growth strategy to create superior value for shareholders. This included the first share buy-back in Northern Star’s history, which we announced during the quarter and started implementing. Our focus remains on safety and sustainably producing profitable ounces from our world-class gold assets in the tier-1 locations of Western Australia and Alaska.”
