Full Year 2024 Northern Star Resources Ltd Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Kate McCutcheon - Citi - Analyst : Hey. Good morning, Stu and Ryan. Congrats on the results. Extending the buyback -- as you say, the average price we purchased that had been $8.85 per share. Do we think about that extension as extending the optionality rather than something that we should count on just given where the share price is and everything else that's going on?

Question: Kate McCutcheon - Citi - Analyst : Okay. That makes sense. And guidance to this year -- I know we got it at the quarter. But the Kalgoorlie -- that $600 million or $550 million, $600 million being spent outside the mill expansion, how do I think about that split for KCGM? Because I think I have to go back some time to find a spilt of how much is being spent on stripping versus the underground. Is there sort of any color you can give around this year?

Question: Kate McCutcheon - Citi - Analyst : Okay. That is helpful. I will go back. And then finally, the D&A steps up this year from $700 million-ish to about $775 million to $785 million (sic - see slide 16, "$875 million"). What is the driver for that? Or if we were to look at last year's rates versus this year, what are the key sites to go back and have a look at, I guess? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. AUGUST 21, 2024 / 11:00PM, NST.AX - Full Year 2024 Northern Star Resources Ltd Earnings Call

Question: Kate McCutcheon - Citi - Analyst : Yeah, thank you, Ryan.

Question: Mitch Ryan - Jefferies LLC - Analyst : Thank you, Stu and Ryan. Just in your comments there, you said that there's some potential capital coming back earlier. I assume you're referring to your convertible funding agreement with Osisko. Just understanding that you can elect it at normal-sized election. Once there's been a change of control, you can either go into common shares or a stake in the asset of Windfall. Are we read into that that you would prefer to elect to go into shares versus the project stake? Or how are you thinking about that convertible at this point in time?

Question: Mitch Ryan - Jefferies LLC - Analyst : Yeah. Okay. Perfect. Thank you. And my second question, there was $65 million spent on tenements acquisitions during the year. Just can you provide some detail around where that spend is being corrected, i.e., is it a greenfield territory for Northern Star? Or is it for potential satellite deposits around existing infrastructure?

Question: Mitch Ryan - Jefferies LLC - Analyst : Okay, perfect. Thank you. That's it for me. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. AUGUST 21, 2024 / 11:00PM, NST.AX - Full Year 2024 Northern Star Resources Ltd Earnings Call

Question: Al Harvey - JPMorgan - Analyst : Yeah, morning, team. Just another one on the buyback, I guess, just want to get a sense, I guess, given it's been used fairly sparingly the last 12 months outside the start of FY24 and a few days in late June, just trying to get a bit more color on how you're thinking about deploying it. Is there some kind of valuation function you looked at? And I suppose just to add to that, I mean, with your deals still being unfranked for at least the next six months, how does that change the way you're thinking about capital returns?

Question: Al Harvey - JPMorgan - Analyst : Yeah, I think that's all from me. Cheers.

Question: Hugo Nicolaci - Goldman Sachs Australia Ptd Ltd. - Analyst : Good morning, Stuart, Ryan, and team. Thanks for the update this morning. First one, it's a two-parter on capital management. Just, obviously, the current gold pricing environment, business looks pretty well positioned to fund the capital spend pipeline you've outlined as well as still moving increasingly into net cash and growing that liquidity position. So obviously, a few questions already on the buyback. And first part of the question, how do you think about growing capital returns over the medium term versus keeping capital for other opportunities? And second part of the question, do you still see room for additional assets in the portfolio? And I'll come back (technical difficulty) REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. AUGUST 21, 2024 / 11:00PM, NST.AX - Full Year 2024 Northern Star Resources Ltd Earnings Call

Question: Hugo Nicolaci - Goldman Sachs Australia Ptd Ltd. - Analyst : (inaudible) portfolio sizing that kind of on a five-year view, you're seeing a lot of opportunity organically in the portfolio. So not necessarily looking to add new assets.

Question: Hugo Nicolaci - Goldman Sachs Australia Ptd Ltd. - Analyst : Great. That's clear. And then just one more on costs, if I can. I mean, obviously, great to see the top line growing with gold price -- and typically across the sector, you tend to see costs creep up. We've sat where, typically, only part of that's coming from chasing lower-grade tonnes that become viable. So can you just remind us of where you're seeing cost inflation in terms of labor versus equipment and consumables? And kind of what areas you maybe have a bit more control on that you can, I guess, help to keep those costs flat or even down potentially over the next 12 to 24 months?

Question: Hugo Nicolaci - Goldman Sachs Australia Ptd Ltd. - Analyst : Thanks for that extra color. I'll pass it on. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. AUGUST 21, 2024 / 11:00PM, NST.AX - Full Year 2024 Northern Star Resources Ltd Earnings Call

Question: Matthew Frydman - MST Financial - Analyst : Yeah, sure, thanks. Good morning, Stu and Ryan. Can I ask -- you ended the year with $385 million (sic - see slide 4, "$358 million") net cash. You've just talked pretty extensively about your capital management plan, and you're kind of thinking about returning the excess. Can you remind us how you think about the limits around net debt or leverage, how you think about where the sweet spot is in terms of the balance sheet and I guess, what the sort of upper end of the range is in terms of working our balance sheet a little bit harder? That's the first part. And then, secondly, Ryan highlighted the ROCE performance. Obviously, working the balance sheet harder will help drive that. I'm sure I can find all the details somewhere in the annual report. But at a high level, can you remind us what the management incentives are that are aligned to ROCE? Thanks.

Question: Matthew Frydman - MST Financial - Analyst : Okay. That's a simple one. Thank you, Ryan. And in terms of the sweet spot on the balance sheet?

Question: Matthew Frydman - MST Financial - Analyst : No, I wasn't suggesting it was a disconnect. Obviously, if you can improve ROCE performance, one way to do that is working the balance sheet harder. So yeah, in terms of the -- I guess, how you think about the upper limits of whether it's the gross net debt -- sorry -- absolute net debt figure or a leverage figure, how do you think about that? Thanks.

Question: Matthew Frydman - MST Financial - Analyst : Yeah. Got it. Thanks, Stu, and thanks, Ryan. And I guess, the other part of it is understanding those balance sheet targets, which obviously allows investors to get a sense of what you might consider to be excess in terms of capital returns. Maybe just one final one quickly. You guys have -- as a business, have obviously been somewhat shielded by the, I guess, the cash tax benefit post the merger. It seems like reading the commentary that you expect probably in six months' time to be sort of paying more material amount of cash tax. Would that be a fair assessment? Is there anything that we need to sort of think about in terms of cash tax catch-up? Or yeah, how do you expect the year will play out in terms of cash tax commitments? Thanks.

Question: Matthew Frydman - MST Financial - Analyst : Yeah, got it. Thanks. That's very, very helpful guidance. Thanks for that. That's all from me.

Question: Daniel Morgan - Barrenjoey - Analyst : Hi, Stu and Ryan? Just a question on the ops, if I may. I know this is a financial result, but just ops. At the end of the fiscal year, key items outstanding from an operational perspective was the Pogo mill motor replacement as well as rectifications of Thunderbox. I'm just wondering if you can make some comments about -- or has the Pogo mill motor been replaced? I presume it has, and that project has been delivered and working well. And where is Thunderbox at? Thank you.

Question: Daniel Morgan - Barrenjoey - Analyst : And just back to tax, is there a simple way for the investment community to think about the difference between the financial outcomes you report to us and then the tax accounts, just so that we can effectively model the tax paid calculations through good gold prices and bad? Like is there some sort of DNA difference that you could simplify for us in the market? Thank you. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. AUGUST 21, 2024 / 11:00PM, NST.AX - Full Year 2024 Northern Star Resources Ltd Earnings Call

Question: Daniel Morgan - Barrenjoey - Analyst : Yeah, thank you very much for your perspective.

Question: Ben Lyons - Jarden - Analyst : Thanks. Good day, Stu. Just a really simple one from me this morning. I'm just wondering how the record gold price is currently influencing your approach at the operating level, given you made some comments earlier in the call about the industry's propensity to drop cutoff grades in good times, which obviously extends the life of the operations that leads to cost inflation. The margin typically stays there or thereabout, some shareholders never really get those super normal returns for the higher commodity price. So just interesting in your current perspectives about how the gold price is influencing your approach to the operations. Thank you.

Question: Ben Lyons - Jarden - Analyst : No, thanks very much. Appreciate that color. I guess the nature of the question is around some of the historical behavior of Northern Star, probably, prior to your tenure at assets like Jundee, for example. And probably analogous to Pogo as well, where maybe in a higher gold price environment, the temptations take some lower-grade ounces was always prevalent. And you could see lower grades reporting from some of those undergrounds and hence, the higher costs and lower margins. That was the nature of the question. So I'm hoping that's something that current temptation to go after some of the lower-grade stuff in the higher gold price environment.

Question: Ben Lyons - Jarden - Analyst : Okay. Thanks, Stu. That's really helpful. And please don't take it as a criticism, just a simple question. But thank you very much for your perspectives.

Question: Anthony Barich - S&P Global Commodity Insights - Analyst : Yes, hello. Just major gold industry player. Just wondering whether you had -- what was your reaction to what the Feds did with (inaudible). Obviously, just with the -- I know a lot of our industry lobby groups have said things about you can get approvals from state and Fed, and then all of a sudden something could just happen at a federal level. Does that give you any kind of concern around sovereign risk for Australia and maybe what that might say about what a federal EPA might do?

Question: Anthony Barich - S&P Global Commodity Insights - Analyst : Okay. Thank you.