Northern Star Resources Faces Operational Hurdles, Revises Production and Cost Guidance

April 29, 2025 11:24 AM AEST | By Team Kalkine Media

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Northern Star Resources Faces Operational Hurdles, Revises Production and Cost Guidance — Image source: shutterstock

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Highlights

Northern Star Resources trims FY25 production outlook.

Operational challenges at Kalgoorlie impact output and costs.

De Grey Mining acquisition completion scheduled for early May.

Northern Star Resources (ASX:NST) saw its shares retreat over 5% to $19.80 in early ASX trading after revising its full-year production and cost guidance. The update comes on the back of operational challenges at its key Kalgoorlie Consolidated Gold Mines (KCGM) site, prompting a tighter output forecast for FY25.

The company now anticipates producing between 1.63 million to 1.66 million ounces of gold, adjusting downward from its earlier range of 1.65 million to 1.80 million ounces. At the same time, all-in sustaining costs have been raised to between $2,100 and $2,200 per ounce, compared to the previous estimate of $1,850 to $2,100 per ounce.

During the March quarter, Northern Star sold 385,441 ounces of gold, a decrease from the 410,249 ounces sold in the previous quarter. The company's all-in sustaining cost rose to $2,246 per ounce for the period, highlighting the mounting operational pressures.

The miner attributed the downgrade to several key issues, including delayed access to the Golden Pike North pits at Kalgoorlie, elevated maintenance expenses across the Yandal operations, and higher royalty payments driven by robust gold prices. Northern Star also increased its FY25 growth capital and exploration guidance to between $950 million and $1,100 million, reflecting higher activity levels across its assets.

Despite these challenges, Northern Star delivered a strong net mine cash flow of A$295 million across all production centres during the March quarter. Managing Director Stuart Tonkin commented that while operational issues at KCGM impacted timelines, the overall financial strength of the company remains intact.

In a strategic move, Northern Star is also nearing the completion of its acquisition of De Grey Mining (ASX:DEG). The $5 billion takeover is set to finalize by 5 May, following overwhelming shareholder approval earlier this month. The acquisition is expected to enhance Northern Star’s growth profile and resource base significantly.

Looking ahead, Northern Star's focus remains on resolving the operational hurdles at Kalgoorlie while integrating De Grey Mining's assets to bolster its long-term production and cost framework.

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