Northern Star Resources Limited (ASX: NST) has released its activities report for the three months to 31 December 2024.
Northern Star is the largest gold producer with a primary listing on the ASX. Its production centres are Kalgoorlie and Yandal in Western Australia and Pogo in Alaska, US.
Key points:
Operating performance
- SLTIFR at 0.5 injuries per million hours worked
- Gold sold totalled 410koz at an AISC of A$2,128/oz (US$1,391/oz)
- KCGM set for 2H production uplift with East Wall remediation now complete and underground development metres increased for third consecutive quarter
- Yandal record net mine cash flow driven by Jundee and Thunderbox mills delivering at nameplate capacity
- Pogo gold sales of 71koz as mill delivers at 1.5Mtpa annualised run rate
- Generated underlying free cash flow of A$72 million; forecast to increase in 2H from higher gold sales
- KCGM Mill Expansion on track; bulk structural steel on site, primary crusher off-site pre-assembly commenced
FY25 outlook remains unchanged
- FY25 guidance at 1,650-1,800koz gold sold and AISC of A$1,850-2,100/oz
- FY25 growth capital guidance at A$950-1,020 million plus KCGM Mill Expansion capex of A$500-530 million
- FY25 exploration guidance at A$180 million
Fully funded organic growth strategy; A$300 million on-market share buy-back open (A$43 million remaining)
- 1H FY25 Cash Earnings estimate of A$1,130-$1,170 million (1H24a: A$701.7 million)
- Repurchased 24.8 million shares at average price of A$10.38 for total cost of A$257 million to date, 5.3 million shares bought back during the December quarter
- Investment-grade balance sheet with net cash of A$265 million at 31 December; cash and bullion of A$1,215 million after receiving A$206 million from Osisko debenture proceeds
Commenting on the December quarter performance, Northern Star managing director Stuart Tonkin said:
“The December quarter was a busy period for our team. At KCGM, we completed the East Wall remediation and advanced the Mill Expansion project. Three portals were developed to provide access to new underground production at KCGM and Carosue Dam. At Jundee, the renewable energy project was fully commissioned, providing a long-term strategic power solution.
“Our continued focus on operational performance, cost control and capital discipline position us well for significant growth in free cash flow generation, complemented by a high gold price environment. We remain on track to achieve our full-year production and cost guidance.
“During the quarter, Northern Star agreed to acquire De Grey by way of a recommended Scheme of Arrangement. Subject to De Grey shareholder and Court approvals being obtained and the Scheme’s implementation, De Grey’s flagship development project, Hemi in Western Australia, is expected to provide Northern Star with an additional tier-1 future low-cost production centre, fully aligned with our strategy to deliver superior shareholder returns.”
