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The call presented a mixed picture. Material operational setbacks in Q2 (crusher failure at KCGM, Jundee and Thunderbox disruptions, grade shortfalls) caused a downgrade to FY'26 production and drove higher near-term costs and incremental FY'26 capex to keep major projects on schedule. Offsetting these issues are a strong balance sheet (cash & bullion $1.18B, net cash $293M), robust H1 cash earnings and operating cash flow, record mining performance at KCGM, improvement in processing recovery (86%, +5ppt vs expectation) and clear project progress (KCGM mill expansion on track for early FY'27). Management emphasized the one-off nature of many issues and confidence in a stronger second half. Overall, positives (financial strength, project pipeline, recovery improvements and inventory of high-grade ore ready for processing) are balanced by significant operational execution risks and near-term upgrades to capex and schedules.
Northern Star revised FY‑26 guidance to 1.6–1.7 million ounces of gold sold at an AISC of $2,600–$2,800/oz (after reporting Dec‑quarter gold sold of 348,000 oz at AUD 2,937/oz), kept operational growth CapEx guidance at $1.14–$1.20 billion and detailed FY‑26 project spend including KCGM mill expansion $640–$660 million, KCGM tailings $240–$260 million (FY‑27 $100–$120 million), and Hemi $165–$175 million; operational highlights fueling the outlook included KCGM mining a record 207,000 oz in the quarter, finishing the quarter with 1.3 Mt @ 1.9 g/t and ~81,000 oz of high‑grade ore on the ROM pad, open‑pit material movement of ~22 million (Q2) and 45 million (H1) towards an 80–90 Mtpa annual range, >700,000 t crushed in 20 days (vs Dec month 600,000 t), processing availability YTD 92% and quarter recovery 86%, while the balance sheet shows cash and bullion $1.18 billion, net cash $293 million, H1 cash earnings ~$1.06–$1.11 billion, operating cash flow $738 million, 158,000 oz of hedge deliveries in the quarter and total commitments of 1.1 million oz at an average price just over $3,300/oz, with second‑half group cash tax guidance of $230–$270 million.
Northern Star revised FY'26 gold sold guidance to 1.6 million–1.7 million ounces and all-in sustaining cost guidance narrowed to $2,600–$2,800/oz, with further detail provided by production center. Guidance incorporates known one-off events and the company expects a stronger second half.
Cash and bullion of $1.18 billion and a net cash position of $293 million at 31 December. Estimated H1 cash earnings $1.06 billion–$1.11 billion and operating cash flow of $738 million. Dividend policy remains 20%–30% of cash earnings.
KCGM mined a record 207,000 ounces in the quarter (new site record under Northern Star ownership). Open-pit material movement was at the top of the annual guidance range (22 million for the quarter / 45 million for H1 as reported). Mill crushing recovered strongly post-5 January: crushed over 700,000 tonnes in 20 days versus December's 600,000 tonnes (≈16.7% higher tonnage for the reported comparison).
Processing availability averaged 92% year-to-date and recovery for the quarter was 86%, which was 5 percentage points higher than expected, supporting improved metal conversion as the year progresses.
KCGM underground developed 8.7 km and mined 819,000 tonnes of ore in the quarter. For H1, underground ore mined was 1.55 million tonnes (annualized exceeding the 3 Mtpa target). KCGM finished the quarter with 1.3 million tonnes at 1.9 g/t and ~81,000 ounces of high-grade ore on the ROM pad.
Operational growth capital guidance unchanged at $1.14 billion–$1.2 billion. KCGM mill expansion remains on schedule for early FY'27 commissioning. KCGM FY'26 capex items disclosed: mill expansion $640M–$660M, tailings dam $240M–$260M (FY'27 tailings spend lighter at $100M–$120M). Hemi FY'26 forecast spend $165M–$175M reflecting optimization/design work.
158,000 ounces of hedges delivered during the quarter. Remaining commitments were 1.1 million ounces at an average price just over $3,300/oz (≈14.4% of commitments delivered in the quarter), meaning ongoing unwinding will increase exposure to spot as production rises.
Non-cash inventory charges were a credit of $93 million in the December quarter (driven by lower grade stockpile build and higher ore stocks at KCGM and Thunderbox). Company lowered second-half group cash tax forecast to $230M–$270M.
Thank you for standing by, and welcome to the Northern Star December 2025 Quarterly Results Call. [Operator Instructions]. I would now like to hand the conference over to Mr. Stuart Tonkin, Managing Director and CEO. Please go ahead.
Good morning, and thank you for joining us today. With me on the call is the Chief Financial Officer, Ryan Gurner; and Chief Operating Officer, Simon Jessop. As previously announced in the December quarter, gold sold totaled 348,000 ounces at an all-in sustaining cost of AUD 2,937 per ounce. A number of one-off operational events across our assets resulted in this softer performance and required us to revise FY '26 production and cost guidance. With these events behind us, our team remains firmly focused on driving productivity improvements and strengthening cost discipline to deliver a stronger second half for our shareholders. Our FY '26 outlook provides revised guidance of 1.6 million to 1.7 million ounces of gold sold at an all-in sustaining cost of $2,600 to $2,800 an ounce. Today, we also provide further detail for production and AISC guidance by production center. In addition, we have updated our capital expenditure forecast across the portfolio.
Operational growth capital guidance remains unchanged at $1.14 billion to $1.2 billion. KCGM's growth in capital expenditure in FY '26 consists of several projects designed to prepare the operation for commissioning of the newly expanded mill from FY '27. And 2 aspects, which I'd like to highlight are the KCGM mill expansion project FY '26 capital expenditure is now expected to be in the range o...