ASX: NST

ASX Announcement

20 July 2022

QUARTERLY REPORT onlyJUNE 2022

KEY POINTS

Environment, Social and Safety (ESS)

LTIFR at 0.5 per million man hours

use

Completed installation of solar power plant at Carosue Dam, network integration progressing

Production

Strong June quarter delivered FY22 production and cost guidance, showcasing Northern Star's operational

resilience to current challenges

For the June quarter, gold sold totalled 402koz at an AISC of A$1,650/oz (US$1,180/oz) and AIC of A$2,204/oz;

all three production centres operated at combined production rate of 1.6Mozpa

For FY22, gold sold totalled 1,561koz at an AISC of A$1,633/oz (guidance of 1,550-1,650koz at an AISC of

personal

A$1,600-1,640/oz)

Australian Operations delivered FY22 production and cost guidance; Pogo delivered above 2H expectations

with annual run rate of 250koz

Discovery and Growth

First year of five-year profitable growth pathway delivered significant progress:

o Kalgoorlie: Material movement of 66Mtpa (vs FY26 target of 80-100Mtpa)

o Yandal: Thunderbox mill expansion remains on track and within budget, ramp up expected 1H23

o Pogo: Mill expansion completed, mine ramp-up progressing with additional mining fronts

For the June quarter, A$201 million spent on growth capital and A$37 million on exploration

For FY22, A$674 million spent on growth capital and A$121 million on exploration, below guidance

Delivered KCGM Mill Optimisation Pre-Feasibility Study (steady state plus three expansion options)

Financial

Strong balance sheet with net cash1 of A$528 million at June 30; cash and bullion of A$628 million

FY22e Cash Earnings2 of A$1,020-1,040 million (1H22a: A$430 million; 2H22e: A$590-610 million)

Corporate

Completed sale of Paulsens and Western Tanami non-core assets for A$44.5 million

Outlook

For

FY23 guidance of 1,560-1,680koz gold sold at an AISC of A$1,630-1,690/oz (2H weighted)

  • FY23 growth capital budget of A$650 million; exploration budget of A$125 million
  1. Net cash is defined as cash and bullion less corporate bank debt (A$100M)
  2. Cash Earnings is defined as Underlying EBITDA less sustaining capital, net interest and corporate tax paid

OVERVIEW

Northern Star Resources Limited (ASX: NST) is pleased to report operational and financial results for the June 2022 quarter, with gold sold of 402,069oz at an all-in sustaining cost (AISC) of A$1,650/oz.

onlyThe June quarter performance by production centre:

Kalgoorlie: 213,310oz gold sold at an AISC of A$1,791/oz

Yandal: 121,601oz gold sold at an AISC of A$1,403/oz

Pogo: 67,158oz gold sold at an AISC of US$1,184/oz

Figure 1: FY22 Group Gold Sales and AISC

use

koz

Yandal

Kalgoorlie

Pogo

AISC (A$/oz)

A$/oz

600

1,593

1,631

1,656

1,650

1,800

1,600

500

1,400

400

44

46

67

1,200

57

1,000

300

800

personal

232

245

213

200

213

600

100

400

122

200

110

102

110

0

0

Sep Q 2021

Dec Q 2021

Mar Q 2022

Jun Q 2022

MANAGEMENT COMMENTARY

The June quarter performance enabled Northern Star to meet its FY22 production and cost guidance, which was achieved despite a challenging environment over the past 12 months that elevated during the last quarter. Pleasingly, FY22 capital expenditure and exploration were lower than forecast.

The strong fourth-quarter performance showcased the quality of the Company's assets to adapt to all environments. All three production centres achieved production guidance and demonstrated the capability for the Group to operate at 1.6Mozpa.

Commenting on the June quarter and FY22 performance, Northern Star Managing Director Stuart Tonkin said:

"I am extremely proud of our team for delivering our FY22 guidance in a year that has seen extraordinary challenges. Further, we have maintained reliable operations over the past year and protected the health and wellbeing of our team.

For"The first full year of operating as the enlarged Northern Star has provided us a true understanding of the opportunities and requirements of our assets, particularly in this inflationary environment, and resulted in us increasing our FY23 capital budget. Our responsible approach to growth means we will be disciplined in how and when we spend the budget, at all times focused on maximising returns.

"I am very pleased with how Northern Star is performing and executing our profitable growth strategy to create value for shareholders. We continue our focus on producing profitable ounces from world-class gold assets in tier-1 locations. Combined with our differentiated operating capability - the NSMS internal mining services business - that enables industry leading underground productivity rates, Northern Star is in a strong position to deliver a successful FY23."

Northern Star's June quarter conference call will be held today at 9:00am AEST (7:00am AWST). The call can be accessed at: https://webcast1.boardroom.media/watch_broadcast.php?id=62bba4ba1aa0c

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Figure 2: FY22 Guidance achieved for Group production, costs, capital expenditure and exploration

FY22 ACTUAL vs GUIDANCE

UNITS

KALGOORLIE

YANDAL

POGO

only

Gold Sold (actual)

koz

903

443

214

Guidance

900 - 950

430 - 450

205 - 220

AISC (actual)

A$/oz

1,624

1,430

2,068 (US$1,498)

Guidance

1,500 - 1,600

1,375 - 1,475

2,150 - 2,230

(US$1,570 - 1,625)

Total Growth Capital Expenditure

A$M

263

335

76

Guidance

261

351

70

Development Receipts**

(15)

(58)

-

Guidance

(5)

(57)

-

Net Growth Capital Expenditure

248

277

76 (US$55)

Guidance

256

294

70 (~US$55)

use

A$M

Exploration

Guidance

*FY22 Group guidance excluded Kundana Assets

and EKJV Interests divested as per ASX release dated 18 August 2021.

**FY22 Development Receipts are from pre-commercial gold sales (~29,945 ounces), in line with the relevant Accounting Standard.

Actual AISC and Capital Expenditure converted at a currency using AUS:USD = 0.72.

personalFor

Guidance AISC converted at a currency using AUD:USD = 0.73. Guidance Capital Expenditure converted at a currency using AUD:USD = 0.75.

Figure 3: Five-year growth pathway

TOTAL*

1,561

1, 550 - 1,650

1,633

1,600 - 1,640

674

682

(73)

(62)

601

620

121

140

3

Focus for FY23

Northern Star is adding to its growth pipeline while responsibly advancing its strategic aspirations and purpose to deliver superior returns to shareholders. The Company is closely managing its costs in this inflationary environment and will continue

onlyto adopt an agile and prudent approach to portfolio optimisation and capital growth expenditure.

Northern Star's financial position remains strong, with net cash of A$528 million. The Company's FY23 growth program is fully funded and aligns with our capital management framework of allocating capital to those projects that deliver superior returns.

The Company is well positioned to deliver 1,560koz - 1,680koz gold at an AISC of A$1,630-1,690/oz in FY23. Gold sold is expected to be weighted towards 2H as a result of the scheduled ramp up of the Thunderbox mill expansion.

Northern Star's Group capital expenditure (sustaining, growth, exploration) for FY23 is forecast to be at similar levels to FY22.

Figure 4: FY23 Group Guidance

seu

FY23 GUIDANCE

UNITS

KALGOORLIE

YANDAL

POGO

TOTAL

Gold Sales

koz

820

- 870

480

- 520

260 - 290

1,560 - 1,680

AISC

A$/oz

1,560

- 1,660

1,525

- 1,625

1,857 - 2,000

1,630 - 1,690

(US$1,300 - 1,400)

Growth Capital Expenditure

A$M

355

217

65

650*

Exploration

A$M

125

*Includes A$13M of corporate investment.

AISC and Capital Expenditure converted at a currency using AUD:USD = 0.70.

In FY23, Northern Star is committed to safely delivering our operational targets and advancing organic growth options across our portfolio. Major growth areas, which accounts for ~90% of FY23 growth capital expenditure, include:

personal

% OF GROUP

PRODUCTION

MAJOR GROWTH OPTION

CAPEX

CENTRE

43%

Kalgoorlie

Progressing waste material movement at KCGM, which unlocks high grade Golden Pike North

and Fimiston South ore for processing in the subsequent years; new tailings dam

12%

Yandal

Completion of the Thunderbox mill expansion which is on track and on budget for

commissioning and ramp up in 1H23; establishment of Otto Bore mine; new tailings dam

For

12%

Yandal

Development of Orelia open pit as a feed source for the expanded Thunderbox mill

10%

Kalgoorlie

Development of Carosue Dam Porphyry underground, scheduled to start in 1H23

10%

Pogo

Pogo UG mine development, additional camp, UG capital drilling and assays

Y24-26 Outlook

Northern Star's assets are well placed to deliver our profitable growth strategy to 2Mozpa by FY26. The Company is focused on the disciplined and transparent allocation of capital and will not grow for growth's sake. Uncertainty in the operating and inflationary environment, particularly over the past quarter when industry wide cost escalation accelerated, has prompted the Company to take the prudent decision to withdraw the FY24 cost and capex guidance it provided a year ago.

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Table 1: June quarter 2022 performance summary - by production centre

3 MONTHS ENDING 30 JUN 2022

Units

Kalgoorlie

Yandal

Pogo

Total

only

Underground Mining

Ore Mined

Tonnes

1,558,335

950,587

320,258

2,829,180

Mined Grade

g/t Au

2.2

3.5

7.7

3.3

Ounces Mined

oz

108,955

108,294

79,106

296,355

Open Pit Mining

Open Pit Material Moved

BCM

7,883,649

2,236,904

-

10,120,553

Open Pit Ore Mined

Tonnes

2,741,730

1,401,173

-

4,142,903

Mined Grade

g/t Au

1.4

1.4

-

1.4

Ounces Mined

oz

122,621

62,156

-

184,777

Milled Tonnes

Tonnes

4,897,262

1,344,423

322,290

6,563,975

use

Head Grade

g/t Au

1.6

3.2

7.7

2.2

Recovery

%

86

91

89

88

Gold Recovered

oz

214,206

125,841

70,792

410,839

Gold Sold - Pre-Production

oz

4,640

138

-

4,778

Gold Sold - Production

oz

208,670

121,463

67,158

397,291

Gold Sold

oz

213,310

121,601

67,158

402,069

Average Price

A$/oz

2,482

2,481

2,477

2,484

Revenue - Gold (2)

A$M

518

301

166

985

Total Stockpiles Contained Gold

oz

2,975,748

154,992

1,638

3,132,378

Gold in Circuit (GIC)

oz

41,067

11,281

10,726

63,074

personal

Gold in Transit

oz

30

550

-

580

Total Gold Inventories

oz

3,016,845

166,823

12,364

3,196,032

Underground Mining

A$M

111

76

51

238

Open Pit Mining

A$M

45

24

-

69

Processing

A$M

118

39

37

194

Site Services

A$M

15

7

9

31

Ore Stock & GIC Movements

A$M

(11)

(15)

(3)

(29)

Royalties

A$M

16

9

-

25

By-Product Credits

A$M

(3)

-

-

(3)

Cash Operating Cost

A$M

291

140

94

525

Rehabilitation

A$M

3

1

1

5

Corporate Overheads (3)

A$M

11

6

-

17

Sustaining Capital (5)

A$M

70

25

16

111

All-in Sustaining Cost

A$M

375

172

111

658

Exploration (4)

A$M

18

5

8

31

Growth Capital (gross) (5)

A$M

70

94

37

201

Development Receipts

A$M

(12)

-

-

(12)

All-in Costs

A$M

451

271

156

878

Mine Operating Cash Flow (1)

A$M

146

121

53

320

Net Mine Cash Flow (1)

A$M

88

27

16

131

For

Cash Operating Cost

A$/oz

1,393

1,144

1,408

1,320

All-in Sustaining Cost

A$/oz

1,791

1,403

1,661

1,650

All-in Costs

A$/oz

2,156

2,215

2,336

2,204

Depreciation & Amortisation

A$/oz

883

663

596

769

Non-Cash Inventory Movements

A$/oz

51

(146)

(13)

(20)

(1) Mine Operating Cash Flow is calculated as Revenue, less Cash Operating Costs (excluding inventory movements) and Sustaining Capital. Net Mine Cash Flow is calculated as Mine Operating Cash Flow less Net Growth Capital.

(2) Excludes the impact of unwinding the hedge book fair value assumed as part of the initial acquisition accounting required in relation to the merger with Saracen. Revenue - Gold does not include Development Receipts.

(3) Includes non-cashshare-based payment expenses in corporate overheads.

(4) Excludes exploration spend at non-producing projects and regional sites (A$6M).

(5) A$38M of finance lease repayments are included in Sustaining Capex (A$28M) and Growth Capex ($10M). Finance leases repayments are included in cash flows from financing activities in the Consolidated Statement of Cash Flows included in the Company's financial statements.

Pogo Operations costs are presented in AUD which is the Group's presentation currency. USD cost disclosure is presented in Table 11.

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Northern Star Resources Ltd. published this content on 19 July 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 19 July 2022 22:33:05 UTC.