Northern Star Resources : Quarterly Activities Report – March 2019

ASX: NST

ASX Announcement

24 April 2019

MARCH 2019 QUARTERLY ACTIVITIES REPORT

Pogo hits inflexion point, paving way for record fourth quarter

Group FY2019 production guidance maintained at 850,000-900,000oz and AISC guidance increased from A$1,125-A$1,225/oz to A$1,225-A$1,275/oz; June quarter production guidance is 235,000-260,000oz and AISC guidance is A$1,075-A$1,175/oz

HIGHLIGHTS

▪Gold sold in the March quarter of 185,296oz at an AISC of A$1,369/oz (US$975/oz)* o Australian operations sold 149,069oz at an AISC of A$1,200/oz (US$855/oz)

o US operations sold 36,227oz at an AISC of A$2,062/oz (US$1,468/oz)

▪Pogo's results reflect impact of significant changeover-related activity, including the late delivery of the new mobile underground mining fleet and the introduction of a new mining method, which limited production temporarily; This reduced production drove up the AISC per ounce

▪In the March quarter, monthly expenditure at Pogo fell ~20% to US$18.5M from an average of US$22.5M per month in the previous two quarters. Further cost reductions are anticipated

▪Pogo is forecast to produce ~50,000oz in the June quarter

▪Turnaround at Pogo and ongoing strong performance at Australian operations expected to deliver record group quarterly production in the June quarter; Rising trend demonstrated by the sale of 82,000oz of gold in the month of March

▪Operating cash flow of A$63M for the quarter; This is set to rise significantly in the June quarter

▪Cash and equivalents at 31 March of A$288M (A$292M at December 31) after investing A$44M in exploration and expansionary capex in the quarter; Northern Star has no bank debt

▪March quarter production:

oJundee Gold Operations:

-81,089oz mined and 67,420oz sold at an AISC A$1,021/oz (US$727/oz) o Kalgoorlie Gold Operations:

-84,492oz mined and 81,649oz sold at an AISC A$1,347/oz (US$959/oz) o Pogo Gold Operations:

-39,750oz mined and 36,227oz sold at an AISC A$2,062/oz (US$1,468/oz)

▪At Pogo, the new mining method of long-hole stoping commenced late in the quarter and represented only 11% of the quarter's processed tonnes. The April month to date figure has increased to 27% and the processed head grade has risen to over 8gpt; This is forecast to increase to a ~60/40% stoping to development ratio in the coming quarters

ASX Announcement

24 April 2019

MARCH 2019 QUARTERLY ACTIVITIES REPORT

▪Five of the sixteen new pieces of underground mobile plant arrived on site in the March quarter; The balance is scheduled for delivery in the June quarter

▪Pogo is on track for a maiden JORC Reserve mid-year; Eight rigs are now operating underground and a further four rigs are operating on the surface

▪Outstanding results from Pogo Central Zone discovery, incl 1.5m at 48.6gpt, 1.3m at 33.2gpt, 5m at 13.9gpt; In-mine extensional drilling results incl 2.4m at 82.5gpt, 1.8m at 80.2gpt and 4.5m at 30gpt

▪Australian operations on track to meet the top end of FY2019 production guidance of 600,000- 640,000oz

▪At Jundee, open pit mining at Ramone commenced in February with ore to be processed this quarter; Regional exploration at Ramone has resulted in further discoveries at the nearby Ziggy and Marley prospects with results including 17m at 4.1gpt and 9m at 6.2gpt

▪Surface diamond drilling continues to confirm the underground potential of the Ramone system

▪Significant regional exploration success in the projected Zuleika Shear geological setting at South Kalgoorlie Operation with results including 1m at 246gpt and 1m at 28.6gpt

▪Northern Star will host a quarterly conference call today, 24 April 2019 at 9:00am AEST (7:00am AWST). The call can be accessed athttps://webcasting.boardroom.media/broadcast/5ca2f2207b79d12cecbb7923

Northern Star Resources Limited (ASX: NST) is pleased to report on its activities in the March quarter, during which the Company's Australian operations performed comfortably within guidance and the investment in the Pogo gold mine saw the project reach its turnaround point.

Gold sold in the quarter totalled 185,296oz at an AISC of A$1,369/oz. This included the sale of 82,000oz in the month of March alone, which reflected the early benefits of the changes made at Pogo.

In light of this strong progress at Pogo, Northern Star is set for record production in the June quarter of 235,000-260,000oz at an AISC of A$1,075-A$1,175/oz.

Group FY2019 production guidance is maintained at 850,000-900,000oz. AISC guidance has increased slightly from A$1,125- A$1,225/oz to A$1,225-A$1,275/oz. Production across the Australian operations is set to be at the top end of FY2019 guidance of 600,000- 640,000oz.

At Pogo, significant progress has been achieved in the March quarter and into the month of April, with production set to rise over the coming quarters as long-hole stoping is ramped up. This is expected to result in a 60/40 split of stoping to development ore in the coming quarters.

The new mining method of long-hole stoping commenced late in the March quarter and represented only 11% of the quarter's processed tonnes. The April month to date figure has increased to 27% and the processed head grade has risen to over 8gpt.

Pogo mining physicals were significantly impacted in the March quarter due to a delay in equipment delivery, with only five of the scheduled sixteen pieces of underground mobile plant arriving in the quarter. The delivery of the remaining eleven units in the June quarter will see productivities and efficiencies continue to rise and lower the unit costs.

Northern Star Executive Chairman Bill Beament said the benefits of the changes being made at Pogo were now flowing into the results.

"The introduction of the new mining method and the late delivery of some equipment reduced production at Pogo, which in turn temporarily drove up the costs per ounce," Mr Beament said.

"But these changes are starting to pay dividends, as the results in the months of March and April show. As well as ramping up tonnages from the long-hole stoping towards the end of the quarter, we cut site expenditure to an average of US$18.5M a month in the March quarter from an average of US$22.5M a month in the previous two quarters.

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ASX Announcement

24 April 2019

MARCH 2019 QUARTERLY ACTIVITIES REPORT

"This will deliver significant benefits for the AISC at Pogo as production rises.

"We always said it would take 18 months to implement our strategy at Pogo so despite the temporary delays we are still on schedule."

Mr Beament said the excellent operational performance at the Australian operations and the strong progress made at Pogo were achieved in parallel with outstanding exploration results across the board.

"At Pogo, eight rigs are now operating underground and another four are drilling from the surface," he said.

"We have generated some outstanding results from the Pogo Central Zone discovery, including 1.5m at 48.6gpt, 1.3m at 33.2gpt, 5m at 13.9gpt, achieved great in-mine extensions of all currently mined lodes and Pogo is on track for a maiden JORC Reserve in the middle of this mid-year.

"At Jundee, the regional exploration at Ramone has resulted in further discoveries at the nearby Ziggy and Marley prospects with results including 17m at 4.1gpt and 9m at 6.2gpt.

"We have also generated significant regional exploration success in the projected Zuleika Shear geological setting at the South Kalgoorlie Operation, with results including 1m at 246gpt and 1m at 28.6gpt."

Northern Star	Units	Jun-18 Qtr	Sep-18 Qtr^	Dec-18 Qtr	Mar-19 Qtr	FYTD
Ore Hoisted	Tonnes	1,013,112	1,425,006	1,471,614	1,379,931	4,276,551
Mined Grade	gpt Au	5.6	5.3	4.4	4.6	4.8
Gold in Ore Hoisted	Oz	183,843	244,953	208,930	205,331	659,214
Milled Tonnes	Tonnes	1,243,682	1,410,585	1,511,547	1,454,762	4,376,894
Head Grade	gpt Au	5.0	5.1	4.4	4.4	4.6
Ounces Produced	Oz	200,322	229,136	213,829	206,731	649,696
Recovery	%	92	91	90	90	90
Gold Recovered	Oz	183,949	207,600	193,252	186,255	587,107
Ounces Sold	Oz	182,856	212,682	210,561	185,296	608,539
Cash Operating Cost	A$/oz	788	999	1,108	1,164	1,087
All-in Sustaining Cost	A$/oz	982	1,226	1,365	1,369	1,318
Total Stockpiles Contained Gold	Oz	78,787	88,512	81,783	78,721	78,721
Gold in Circuit (GIC)	Oz	27,523	33,572^^	23,173	26,991	26,991
Gold in transit (oz)	Oz	1,391	11,035^^	3,642	358	358
^Physical metrics, cash operating costs and all-in-sustaining costs are inclusive of Pogo operations for September quarter.
^^Includes Pogo inventory of 5,447ozs GIC; 9,860ozs Gold in transit at September 2018.
Northern Star	Units	Jun-18 Qtr	Sep-18 Qtr^	Dec-18 Qtr	Mar-19 Qtr	FYTD
Revenue	A$M	316.5	258.9	362.6	329.7	951.2
Average Gold Price	A$/oz	1,731	1,691	1,722	1,779	1,733

^Excludes Pogo operations revenue as it was acquired 28 September 2018.

Table 1: Key Group Performance Figures (Quarterly)

Northern Star	Units	Jun-18 Qtr	Sep-18 Qtr	Dec-18 Qtr	Mar-19 Qtr	FYTD
Mining	A$/oz	452	611	644	720	656
Processing	A$/oz	199	295	274	311	292
Site Services	A$/oz	38	76	91	97	88
Ore Stock & GIC Movements	A$/oz	58	(6)	64	5	22
Royalties	A$/oz	44	25	29	33	29
Ore Purchase	A$/oz	-	-	8	1	3
By Product Credits	A$/oz	(3)	(3)	(3)	(3)	(3)
Rehabilitation-Accretion & Amortisation	A$/oz	3	6	7	9	7
Corporate Overheads	A$/oz	51	37	44	44	41
Mine Development/Sustaining CAPEX	A$/oz	110	163	182	123	158
Mine Exploration	A$/oz	30	22	25	29	25
All-in Sustaining Costs	A$/oz	982	1,226	1,365	1,369	1,318
Depreciation & Amortisation	A$/oz	201	304	281	357	312

Table 2: Key Group Cost per Ounce Measures

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ASX Announcement

24 April 2019

MARCH 2019 QUARTERLY ACTIVITIES REPORT

	Production KPIs March Quarter			Units			Kalgoorlie			Jundee			Pogo			Total
							Operations
	Total Ore Hoisted			Tonnes		699,750			508,361			171,820			1,379,931
	Mine Grade			gpt Au		3.8			5.0			7.2			4.6
	Gold in Ore Hoisted			Oz		84,492			81,089			39,750			205,331
	Milled Tonnes			Tonnes		772,960			490,934			190,868			1,454,762
	Head Grade			gpt Au		3.7			4.9			6.2			4.4
	Recovery		%			91			90			89			90
	Gold Recovered			Oz		82,720			70,154			33,381			186,255
	Gold Sold			Oz		81,649			67,420			36,227			185,296

Cash Operating Costs	A$/oz	1,074	872	1,909	1,164
All-In Sustaining Costs	A$/oz	1,347	1,021	2,062	1,369
Depreciation & Amortisation	A$/oz	447	210	412	357

Table 3: Key Quarterly Mine Production Performance

FINANCE

The following is a table of the cash, bullion and investments held at the end of each quarter:

		Jun-18 Qtr	Sep-18 Qtr	Dec-18 Qtr	Mar-19 Qtr
Cash at bank	A$M	$443.0	$216.4	$229.8	$218.8
Bullion awaiting settlement (1)	A$M	$11.4	$15.2	$16.6	$20.1
Equity Investments	A$M	$57.5	$43.7	$45.3	$48.8
Total	A$M	$511.9	$275.3	$291.7	$287.7

(1)Bullion awaiting settlement is dore which has been received by the refiner in the quarter and is awaiting settlement.

Table 4: Cash, Bullion and equity investments

The below table sets out the total of surface gold inventories:

Gold Inventories	Jun-18 Qtr	Sep-18 Qtr	Dec-18 Qtr	Mar-19 Qtr
Stockpiles contained gold (oz)	78,787	88,512	81,783	78,721
Gold in circuit (oz)	27,523	33,572	23,173	26,991
Gold in transit (oz)	1,391	11,035	3,642	358
Total Gold Inventories (oz)	107,701	133,119	108,598	106,070

Table 5: Gold Inventories

The below waterfall chart highlights the March quarter's operating cash flow together with movements in cash, bullion and investments (A$M):

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ASX Announcement

24 April 2019

MARCH 2019 QUARTERLY ACTIVITIES REPORT

The below waterfall chart highlights the underlying free cash flow for the March quarter (A$M):

The below waterfall chart highlights an overview of year to date underlying free cash flow (A$M):

Banking Facilities

Northern Star has in place undrawn debt facilities with a self-arranged syndicate of Banks.

Hedging

The below table outlines the Company's current hedging position:

Term	Jun-19 Half	Dec-19 Half	Jun-20 Half	Dec-20 Half	Total
Ounces	68,500	86,875	85,000	100,000	340,375
Gold Price/oz	A$1,778	A$1,786	A$1,803	A$1,802	A$1,793
Ounces	15,000	22,500	15,000	-	52,500
Gold Price/oz	US$1,223	US$1,244	US$1,281	-	US$1,248

Table 6: Hedging commitments

During the quarter, 81,875 ounces of gold were hedged for delivery across all periods above at an average of A$1,874 per ounce.

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