Northern Star Resources : Quarterly Activities Report - September 2021

ASX: NST

September 2021 Quarterly Activities Report

ASX Announcement

19 October 2021

386,160OZ SOLD AT A$1,594/OZ AISC

On track to meet FY22 guidance of 1.55-1.65Moz at AISC of A$1,475-1,575/oz

KEY POINTS

Environment, Social and Safety (ESS)

• LTIFR at 0.8 (WA Metalliferous average 2.0)
• Set ambition to achieve Net Zero Scope 1 and 2 greenhouse gas emissions by 2050, target for 2030 to be announced in the 2021 Sustainability Report due for release March quarter 2022

Production

• Gold sold totalled 386,160oz at an AISC of A$1,594/oz (US$1,180/oz); By production centre:

• 1. Kalgoorlie: 232,324oz gold sold at an AISC of A$1,533/oz o Yandal: 109,844oz gold sold at an AISC of A$1,345/oz o Pogo: 43,992oz gold sold at an AISC of US$1,751/oz
• Group all-in cost (AIC) of A$1,933/oz
• As previously foreshadowed, planned FY22 production is weighted towards the second half, driven by increasing grades at Yandal and increasing mining rates at Pogo; AISC expected to fall over the year
• On track to meet FY22 guidance of 1.55-1.65Moz at an AISC of A$1,475-A$1,575/oz

Financial

• September quarter average realised price of A$2,345/oz for sales revenue of A$848M (196,751oz hedging delivered at A$2,242/oz)
• Cash Earnings1 of A$165M-A$175M
• Cash and bullion of A$756M at 30 September 2021 (A$803M at June 30) after paying A$110M in dividends and investing A$123M in net growth capital and exploration
• Corporate bank debt reduced to A$262M using funds received from the Kundana asset sale
• Hedge book 839,819oz at average price of A$2,347/oz at 30 September (801,570oz at A$2,286/oz at 30 June)

Corporate

• Chief Executive Officer Stuart Tonkin appointed Managing Director, effective 22 July 2021

Growth and Exploration

• Completed the sale of the Kundana Assets to Evolution (ASX: EVN) for A$400M cash; Sale is consistent with
  Northern Star's strategy of active portfolio management
• Key growth projects progressing in line with strategy to become a 2Mozpa producer by FY26, including KCGM open pit development (Kalgoorlie) and Thunderbox mill expansion (Yandal)

1 Cash Earnings is defined as Underlying EBITDA less net interest, tax and sustaining capital

OVERVIEW

Northern Star Resources Limited (ASX: NST) is pleased to report operational and financial results for the September quarter 2021, with gold sold of 386,160oz at an all-in sustaining cost (AISC) of A$1,594/oz. Cash earnings were A$165-A$175 million.

Figure 1: Group Gold Sales and AISC

koz			Yandal		Kalgoorlie		Pogo		AISC (A$/oz)	A$/oz
600				1,598			1,594	1,800
	1,450				1,600
500				1,459
									1,400
400	54				59	44	1,200
		40			1,000
300
									800
						273
	244		234	232
200				600
100										400
									200
	105		94	112	110
0										0
Dec Q 2020	Mar Q 2021	Jun Q 2021		Sep Q 2021

OUTLOOK

Northern Star's FY22 guidance of 1.55-1.65Moz at an AISC of A$1,475-1,575/oz is unchanged. As previously foreshadowed, gold production is weighted towards the second half of FY22, driven by increasing grades at Yandal and increasing mining rates at Pogo. AISC is expected to decrease over the year.

Northern Star's FY22 net growth capital and exploration budget of A$710M is unchanged. The Company's Five-YearStrategic Plan targets profitable production growth to a sustainable 2Moz per annum by FY26, with declining all-incosts.

Northern Star Managing Director Stuart Tonkin said the quarter's results and progress on its production growth strategy were in line with its expectations.

"This is a solid start to the new financial year and puts us on track to meet our FY22 guidance," Mr Tonkin said. "At the same time, we made strong progress on our development projects in line with our strategy to be a 2Moz a year producer by FY26.

"With solid production, and costs running slightly above guidance, cash earnings were strong.

"This resulted in cash and bullion of more than A$750M at 30 September, after returning A$110M in dividends to shareholders in the quarter. With production, costs and earnings planned to improve as FY22 progresses, we are very well positioned to continue to invest capital into those projects which generate the strongest returns."

Mr Tonkin said Pogo's performance during the quarter was impacted by the tie-in and commissioning of the processing plant upgrade, which will increase throughput capacity from 1Mtpa to 1.3Mtpa.

"We seized the chance to complete other major works, including replacing the primary conveyor belt that transports ore from underground to the processing plant," Mr Tonkin said.

"This resulted in 24 days total downtime, which reduced throughput and gold production, in turn increasing costs per ounce. "This work is now finished and we expect to see a significant benefit for both production and costs from the December quarter onwards. The mill bottlenecks have been removed and throughput is increasing in line with expectations for FY22 guidance."

Northern Star's quarterly conference call will be held today at 11:00am AEDT (8:00am AWST). The call can be accessed at:

https://webcast.boardroom.media/northern-star-resources-ltd/20211019/NaN61554e9ae8183d001a5749b5

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Table 1: September quarter 2021 and FY22 YTD performance summary - By production centre

3 MONTHS ENDING 30 SEPT 2021	Units	Kalgoorlie	Yandal	Pogo	Total
Underground Mining
Ore Hoisted	Tonnes	1,597,298	739,333	210,214	2,546,845
Mined Grade	g/t Au	2.6	3.8	7.1	3.3
Ore Hoisted	oz	134,110	89,071	48,088	271,269
Open Pit Material Moved	BCM	2,962,717	986,391	-	3,949,108
Open Pit Ore Mined	Tonnes	2,090,288	610,725	-	2,701,013
Mined Grade	g/t Au	1.3	1.5	-	1.3
Gold in Open Pit Ore Mined	oz	84,065	29,502	-	113,567
Milled Tonnes	Tonnes	4,794,893	1,492,149	208,504	6,495,546
Head Grade	g/t Au	1.7	2.5	7.1	2.0
Recovery	%	88	91	84	88
Gold Recovered	oz	224,871	108,477	40,127	373,475
Gold Sold - Pre-Production	oz	294	23,755	-	24,049
Gold Sold - Production	oz	232,030	86,089	43,992	362,111
Gold Sold	oz	232,324	109,844	43,992	386,160
Average Price	A$/oz	2,342	2,335	2,346	2,345
Revenue - Gold (2)	A$M	544	201	103	848
Total Stockpiles Contained Gold	oz	3,026,043	94,765	7,208	3,128,016
Gold in Circuit (GIC)	oz	39,521	11,075	5,420	56,016
Gold in Transit	oz	3,544	-	-	3,544
Total Gold Inventories	oz	3,069,108	105,840	12,628	3,187,576
Underground Mining	A$M	95	44	41	180
Open Pit Mining	A$M	33	3	-	36
Processing	A$M	123	23	28	174
Site Services	A$M	16	6	11	33
Ore Stock & GIC Movements	A$M	5	5	(3)	7
Royalties	A$M	14	5	-	19
By Product Credits	A$M	(3)	(1)	-	(4)
Cash Operating Cost	A$M	283	85	77	445
Rehabilitation	A$M	3	1	1	5
Corporate Overheads (3)	A$M	16	6	3	25
Sustaining Capital	A$M	54	24	24	102
All-in Sustaining Cost	A$M	356	116	105	577
Exploration (4)	A$M	13	6	6	25
Growth Capital (gross)	A$M	58	90	6	154
Development Receipts	A$M	(1)	(55)	-	(56)
All-in Costs	A$M	426	157	117	700
Mine Operating Cash Flow (1)	A$M	212	97	(1)	308
Net Mine Cash Flow (1)	A$M	155	62	(7)	210
Cash Operating Cost	A$/oz	1,221	987	1,745	1,231
All-in Sustaining Cost	A$/oz	1,533	1,345	2,386	1,594
All-in Costs	A$/oz	1,834	1,830	2,646	1,933
Depreciation & Amortisation	A$/oz	742	444	581	654
Non Cash Inventory Movements	A$/oz	239	54	41	171

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.

Pogo Operations costs are presented in AUD which is the Group's presentation currency. USD cost disclosure is presented in Table 10.

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ENVIRONMENT, SOCIAL AND SAFETY

There was 1 Lost Time Injury (LTI) reported in the September quarter. Northern Star's Loss Time Injury Frequency Rate (LTIFR) is 0.8, less than half the WA Metalliferous industry average of 2.02.

Table 2: September quarter 2021 Group safety performance

Term	Yandal	Kalgoorlie	Pogo	Group
TRI	4	2	0	6
TRIFR	2.9	5.5	2.6	4.3
LTI	0	1	0	1
LTIFR	0.3	1.0	1.0	0.8

During the September quarter Northern Star announced its ambition to achieve Net Zero for Scope 1 and 2 greenhouse gas emissions by 2050 and released the FY21 Modern Slavery Statement. The 2021 Sustainability Report is planned to be released in the March quarter 2022.

OPERATIONS

Kalgoorlie Production Centre (KCGM, Carosue Dam, Kalgoorlie Operations)

Kalgoorlie sold 232.3koz at an AISC of A$1,533/oz (June quarter 272.9koz at an AISC of A$1,445/oz). Mine operating cash flowwas A$212M. Net mine cash flow was A$155M after net growth capital of A$57M.

At KCGM, open pit mining rates continued to ramp-up, with increased production rate of 72Mtpa achieved at quarter end. Mining occurred across Golden Pike, Morrison, Oroya Brownhill and Fimiston South.

As part of the open pit fleet replacement program, the first of the scheduled 793F trucks arrived on site and were successfully commissioned by quarter end. Fleet will continue to be delivered as per schedule over the next six months.

At KCGM there was a 17% increase in underground mined tonnes quarter on quarter. This was offset by lower processing throughput due to a planned 5-day plant shutdown and scheduled lower availability of access to higher grade open pit feed. District milling continued with 45kt of Mt Charlotte ore treated at Kanowna Belle.

The KCGM expansion feasibility study continued with a market update anticipated in the June quarter 2022.

At Carosue Dam, a new solar farm was commissioned taking the total solar power generation on site to 4.3MW with an additional 1.7MW to be commissioned in the June half 2022. Underground mining continued from Karari - Dervish and Deep South. Open pit mining continued at Million Dollar and Maingays in the Porphyry mining district.

At Kalgoorlie Operations, ore was sourced primarily from the Kanowna Belle and HBJ underground mines during the September quarter. EKJV and Kundana Gold mines contributed to production in July 2021, prior to the transfer of economic interest of those assets effective from 1 August 2021, resulting in lower production ounces and lower AISC in the quarter.

Figure 2: Kalgoorlie Production Centre - Gold Sales and AISC

					Gold Sales (koz)			AISC (A$/oz)
	300								1,800
	250								1,500
	200								1,200
	150								900
	100								600
	50								300
	0									0
		Dec Q 2020	Mar Q 2021	Jun Q 2021	Sep Q 2021

2 Source: Department of Mines, Industry Regulation and Safety 2020, Safety performance in the Western Australian mineral industry - accident and injury statistics 2019-20.

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Yandal Production Centre (Jundee, Thunderbox)

Yandal sold 109.8koz at an AISC of A$1,345/oz (June quarter 112.3koz at an AISC A$1,298/oz). Mine operating cash flow was A$97M. Net mine cash flow was A$62M after net growth capital of A$35M.

At Jundee, the quarter was highlighted by record quarterly development advance. Ore development continued across all mining areas, plus decline advance into Colloform, Hampton, Moneyline, Deakin South, Lyons South and Gringotts.

Stope tonnes continued to increase during the quarter as new mining areas were accessed. The Julius open pit commenced production during the quarter with the first ore processed through the Jundee plant.

At Thunderbox, open pit mining continued with pre-stripping of D Zone whilst underground production activities continued to ramp up at both A and C Zones. The paste plant maintained its good performance meeting fill schedules ensuring production activities remain in line with plan.

The Thunderbox mill expansion saw the mobilisation of GR Engineering Services to site, completion of major bulk earthworks and the commencement of civils focusing on the SAG mill raft, reclaim vault and powerhouse. The mill expansion is on track for commissioning in the December half 2022.

Figure 3: Yandal Production Centre - Gold Sales and AISC

			Gold Sales (koz)			AISC(A$/oz)
120							1,600
100							1,400
							1,200
80							1,000
60							800
40							600
							400
20							200
0								0
	Dec Q 2020	Mar Q 2021	Jun Q 2021	Sep Q 2021

Pogo Production Centre

Pogo sold 44.0koz at an AISC of US$1,751/oz (June quarter 58.8koz at an AISC of US$1,347/oz). Mine operating cash flow was US$(1)M. Net mine cash flow was US$(5)M after growth capital of US$4M.

During the September quarter, Pogo undertook tie-in and commissioning works on the processing plant upgrade to improve throughput capacity from 1.0Mtpa to 1.3Mtpa. The opportunity was also taken to complete other major works including replacing the primary conveyor belt that transports ore from underground to the processing plant. This resulted in 24 days total downtime, impacting throughput and gold production for the quarter. Throughput is increasing in line with expectations and mill availability has returned to normal levels exceeding 90%. This will remove the processing plant as the bottleneck of the operation.

Underground mining prioritised waste development with the focus on accelerating access to additional mining fronts. Ore mined during the September quarter was sourced from Liese, South Pogo and Fun Zone.

The average mine grade during the quarter was 7.1g/t, as FY22 progresses this is planned to revert to the Reserve grade of 8g/t.

Over the quarter, Alaska saw an increase in COVID cases. COVID management protocols and hygiene precautions remain in place as the site continues to operate through the pandemic.

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