Northern Star Resources Ltd (ASX: NST) has emerged as one of the best-performing large-cap miners on the Australian Securities Exchange in 2025, with a 1-year return of 37.59% and a year-to-date gain of over 55%. Despite a modest 0.64% pullback in the latest session, investor sentiment around the gold major remains firmly positive, buoyed by robust quarterly performance, a fully funded growth pipeline, and a clear path to long-term production and margin expansion.
The Australian gold producer, which operates flagship assets across Western Australia and Alaska, reported gold sales of 381,055 ounces for the September 2025 quarter at an all-in sustaining cost (AISC) of A$2,522 per ounce. Notably, the Kalgoorlie Consolidated Gold Mines (KCGM) operation delivered over 100,000 ounces, with record underground run rates and positive momentum on its mill expansion project—positioning Northern Star Resources Ltd for a strong second half in FY26.
In terms of market positioning, Northern Star Resources Ltd is ranked 4th out of 1,078 basic materials companies on the ASX and 17th out of all 2,298 listed entities, underscoring its status as a top-tier institutional pick. The company’s dividend yield of 2.3% and consistent capital returns add further support to its investment case.
How did the company’s Kalgoorlie, Yandal, and Pogo operations perform in the September quarter?
Operationally, the September quarter reflected stable-to-strong execution across Northern Star Resources Ltd’s three core production centres: Kalgoorlie, Yandal, and Pogo. The Kalgoorlie operations led the charge, selling 202,812 ounces at an AISC of A$2,474 per ounce. Within Kalgoorlie, the KCGM unit maintained a 2.9 million tonnes per annum underground mining run rate, while open pit productivity is expected to rise further now that Golden Pike North has returned to a single mining level.
Yandal contributed 113,422 ounces at a higher AISC of A$2,778 per ounce, affected by lower stope grades and operational disruptions at Jundee. However, Thunderbox delivered a record milling rate of 6.7 million tonnes per annum—exceeding its nameplate capacity for a second straight quarter—providing a solid offset. The upcoming feed from Bannockburn and Orelia Stage 2 is expected to improve grade profiles in the second half.
Pogo, the Alaska-based asset, delivered 64,821 ounces at an AISC of US$1,453 per ounce. Despite a major mill shutdown during the quarter, recovery rates remained high at 87%, and development of new portals to Central Veins and Goodpaster zones continued as planned. These portals are expected to improve haulage efficiency and provide better access to high-grade ore zones in 2026.
What is Northern Star Resources Ltd’s updated guidance for FY26?
Northern Star Resources Ltd has reaffirmed its FY26 production guidance of 1.7 to 1.85 million ounces of gold sold, with an AISC target range of A$2,300 to A$2,700 per ounce. While early-December operational disruptions at both Jundee and South Kalgoorlie are expected to impact Q2 sales by up to 20,000 ounces, the company plans to process those volumes across the remaining quarters of FY26, leaving full-year targets unchanged.
Inflationary pressure remains a cost headwind, particularly across mining fleet leasing, royalties tied to higher gold prices, and increased sustaining capital expenditure. Northern Star Resources Ltd has budgeted A$750 million in sustaining capital for FY26—approximately A$420 per ounce—up from the prior year due to higher development rates and infrastructure investments across the portfolio.
Nonetheless, grade improvements expected in the second half at Kalgoorlie and Thunderbox, combined with operational readiness enhancements, are likely to mitigate cost risks and support the lower end of the AISC range.
How is Northern Star Resources Ltd deploying its record capital budget in FY26?
The company’s total growth capital guidance for FY26 is between A$2.13 billion and A$2.27 billion, making it one of the most aggressive organic investment plans in the global gold sector. Central to this investment is the A$530–550 million KCGM Mill Expansion Project, which is in its final build phase and on schedule for commissioning in early FY27.
The expansion will double processing capacity from 13 million tonnes to 27 million tonnes per annum and consolidate the Gidji satellite facility into the central Fimiston Processing Plant. Steady-state output of approximately 900,000 ounces per annum is targeted from FY29 onward, providing a transformative boost to group production at structurally lower cost per ounce.
Further capex allocations include A$315–370 million for KCGM operational readiness—covering a new tailings facility, a renewable-ready thermal power plant, permanent accommodation camp, and equipment fit-outs. Additional growth capital includes A$300–310 million for Yandal (particularly Thunderbox and Bannockburn), and US$70–80 million for Pogo, where underground development and mill optimisation remain the focus.
A$140–150 million has also been earmarked for the Hemi Development Project, which Northern Star Resources Ltd inherited via its acquisition of De Grey Mining. Long lead items and permitting processes are already underway, with strong collaboration across regulatory agencies and Indigenous communities.
How does Northern Star’s balance sheet support its capex-heavy strategy?
As of 30 September 2025, Northern Star Resources Ltd reported a net cash position of A$616 million and cash and bullion holdings totaling A$1.511 billion, even after paying out A$416 million in dividends and A$67 million in corporate tax instalments. The company generated A$183 million in net mine cash flow during the September quarter and maintained its undrawn A$1.5 billion bank facilities, giving it abundant financial headroom to fund its expansion commitments without diluting shareholders.
In terms of hedging, the company continued to unwind its book. No new positions have been added in the last 12 months, and total hedge commitments now stand at 1.275 million ounces at an average price of A$3,309 per ounce—well below the current spot price of A$4,452 per ounce. This positions the miner to capture stronger margins as unhedged ounces increase in the years ahead.
How is the market reacting to Northern Star’s FY26 strategy and capital discipline?
Broker consensus remains bullish. Out of 11 analysts, five recommend a Buy, five rate the stock as Hold, and one maintains a Sell. The company’s earnings per share stands at A$1.116, with a book value per share of A$10.426. At a price of A$23.955, the valuation reflects confidence in forward-looking earnings driven by volume growth, efficiency gains, and gold price leverage.
Northern Star Resources Ltd also maintains strong shareholder engagement through consistent dividend payments and ESG transparency. The final FY25 dividend of A$0.30 per share was paid in September, and the Annual General Meeting is scheduled for 18 November 2025.
Although the share price has softened slightly from recent highs of A$26.52, it remains within the upper quadrant of its 52-week range, signaling market stability and confidence in its capital allocation roadmap.
What challenges could impact Northern Star’s gold production and growth strategy in late FY26?
Short-term risks include operational recovery timelines at Jundee and South Kalgoorlie, where localized disruptions could delay volume normalization. Investors will also watch for updates on permitting for the Hemi Project, potential tailings dam construction costs, and final FY26 capex figures relative to guidance.
However, with strong financial buffers, no new debt incurred, and commissioning of the KCGM Mill Expansion just months away, Northern Star Resources Ltd appears structurally positioned to emerge as a global low-cost producer. Its production base is set to exceed 2 million ounces within three years, with AISC trending downward as capex rolls off.
In a macro environment where gold remains a hedge against volatility and inflation, Northern Star Resources Ltd offers investors a compelling blend of growth, defensiveness, and yield.
Key takeaways: Northern Star Resources Ltd Q1 FY26 operational and financial highlights
- September quarter gold sales hit 381,055oz, with Kalgoorlie leading at 203koz and Pogo reporting the lowest AISC at US$1,453/oz.
- All-in sustaining costs averaged A$2,522/oz, while FY26 guidance remains unchanged at 1.7–1.85Moz gold sold and AISC of A$2,300–2,700/oz.
- Early Q2 disruptions at Jundee and South Kalgoorlie may impact up to 20koz of production, but lost volumes are expected to be recovered across FY26.
- KCGM Mill Expansion Project entered its final build year, with commissioning on track for early FY27 and steady-state output of ~900kozpa by FY29.
- FY26 growth capex guidance ranges from A$2.13B–A$2.27B, covering KCGM, Hemi, Thunderbox, Pogo, and operational readiness projects.
- Net mine cash flow was A$183 million in Q1, with underlying free cash flow of A$14 million and a net cash position of A$616 million.
- No new hedge commitments added for the fourth consecutive quarter, with 1.275Moz hedged at A$3,309/oz—well below current spot prices.
- Institutional sentiment remains strong, with broker consensus leaning bullish (5 Buy, 5 Hold), and valuation near the top end of its 52-week range (A$15.06–A$26.52).
- Watchpoints include permitting for the Hemi Project, cost inflation across sustaining capital, and Q2 recovery timelines at key WA operations.
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