Northern Star Resources still shining with record gold prices

Northern Star Resources is basking in the glow of record US and Aussie-dollar gold prices after putting in a solid first quarter that saw underlying free cash flow skyrocket.

The Super Pit owner sold 394,000 ounces of gold in the three months to the end of September totalling $1.35 billion, and is sticking to full-year guidance of between 1.65 million ounce and 1.8moz.

Across its three production centres — Kalgoorlie and Yandal in the Goldfields and Pogo in Alaska — Northern Star generated underlying free cash flow of $52 million, which was up 86 per cent year-on-year.

The only blot on an otherwise glistening set of figures was a rise in all-in costs to $3251/oz compared to a year ago as capital growth projects progressed, led by the $1.5 billion KCGM mill expansion.

All-in sustaining costs of $2082/oz were up from $1815/oz in the previous quarter.

The precious metals miner achieved an average realised price of $3416/oz for the quarter.

Managing director Stuart Tonkin said Northern Star’s hubs generated net mine cash flow of $122m.

“Our strategic actions under way focus on growing production, lowering unit costs and extending mine lives,” Mr Tonkin said.

“At KCGM, the projects to deliver ore feed and infrastructure for the expanded Fimiston mill progressed well.

“At Jundee, underground mine development commenced at Cook-Griffin while the ramp-up of mill feed sources continued at Thunderbox.

“At Pogo, major mill works were performed successfully to enable us to continue delivering high-margin ounces.”

Northern Star said works on its KCGM mill expansion remained on track.

The three-year project will transform the Super Pit into one of the world’s biggest gold producers and likely extend mining over Kalgoorlie-Boulder’s Golden Mile by decades as the processing circuit at Fimiston more than doubles capacity from 13 million tonnes a year to 27mtpa.

KCGM is expected to operate at 650,000oz a year by FY26 and increase to about 900,000ozpa from FY29, following a two-year ramp-up.