Q2 2025 Northern Star Resources Ltd Activities Report Call Transcript

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

Question: Andrew Bowler - Macquarie Group - Analyst : Yeah. Hello. Just doing some comments you had about the weather impact at KCGM. Obviously, last financial year, the third quarter was pretty savage for all in the gold fields. Just wondering if you can make some comments on how the business is prepped for the wet season this year and sort of how it compares to last year?

Question: Andrew Bowler - Macquarie Group - Analyst : And is it fair to say that like, given obviously higher grades and bottle the pit at Golden Pike, is that a little bit more sensitive to wet weather than, say, the South cutback?

Question: Andrew Bowler - Macquarie Group - Analyst : And last one for me, just on Thunderbox, obviously, hitting its straps in terms of throughput. Just trying to skim on quarterly now, but it seems like you had a very strong final month. Is there anything special in the blend there that sort of allowed for that higher rate of throughput? Or it just happened to be quite a good period, and we should expect a normalization back to six million tonne per annum? Or what would it take for -- what would have to take for you to get more confidence that you can do above that $6 million...

Question: Levi Spry - UBS Group AG - Analyst : Yeah, hi. Stu, Simon, thanks very much for your time. Happy new year. Maybe could you just step us through the ore mining rates at KCGM and how they ramp up over the next few quarters? Just maybe remind us of the targeted rates, your exit run rates, and how we should think about the step-up Q on Q? I guess that was probably what was a bit softer this quarter versus my numbers, so both from underground and from the pit itself?

Question: Levi Spry - UBS Group AG - Analyst : Okay. Thanks, Simon. And from the underground, so how does the step-up look like there? I thought we were targeting sort of is 5 million tonne run rate, correct, for next year versus the 4 million to 7 million in the quarter, so less than 2 million?

Question: Levi Spry - UBS Group AG - Analyst : Yeah, 500,000 growth. But what's the exit rate for this year? On what number? I guess, from combined underground production?

Question: Levi Spry - UBS Group AG - Analyst : Roger that. Thanks a lot. Thank you.

Question: Kate McCutcheon - Citigroup Inc - Analyst : Oh, hi, Stuart. And happy new year. I guess free cash flow was a bit weaker than I thought. And it looks like CapEx was 1H heavy. You kept guidance. Maybe just talk through the area that steps off in 2H, I guess, or how to think about that?

Question: Kate McCutcheon - Citigroup Inc - Analyst : Capital -- (multiple speakers) a little bit weighted to the first half.

Question: Kate McCutcheon - Citigroup Inc - Analyst : Okay. That makes sense. Thank you. And then it looks like the De Grey acquisition is still expected to close in May. What is the top priority, I guess, for Hemi when you get the case?

Question: Kate McCutcheon - Citigroup Inc - Analyst : Okay. And will we have to wait for a little bit after May to get some up numbers? Or how you're thinking about that project? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JANUARY 20, 2025 / 10:00PM, NST.AX - Q2 2025 Northern Star Resources Ltd Activities Report Call

Question: Kate McCutcheon - Citigroup Inc - Analyst : Okay. Thank you, Stuart and Ryan.

Question: Alexander Barkley - RBC Capital Markets - Analyst : Thanks. Good morning, Stuart and team. A question about Pogo. The milling you had in the quarter was quite strong after the upgrade. I see you still needed some stockpile and maybe development a little bit softer than you wanted. Can mining reach that 1.4 million tonnes per annum, maybe even 1.5 million rate? Or is a bit of extra kit required? Is that the long-term target you're thinking about internally? Thanks.

Question: Alexander Barkley - RBC Capital Markets - Analyst : Okay. So it sounds like you are happy with achieving 1.4 million-plus from -- now. Is that right? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JANUARY 20, 2025 / 10:00PM, NST.AX - Q2 2025 Northern Star Resources Ltd Activities Report Call

Question: Alexander Barkley - RBC Capital Markets - Analyst : Okay. Sounds good. Thanks very much. That's all from me.

Question: Ben Lyons - Jarden Securities Limited - Analyst : Thank you, good morning, Stuart, Simon and Ryan, everyone on the call. On KCGM, please, just further to Levi's questions around the material movements. This thing may be on the open pit. As you in the into more of that golden pipe material in the second half, obviously, we'll be expecting an increase in the open pit grade. Just wondering if you can give any indication of what that growth profile looks like over the second half, please?

Question: Ben Lyons - Jarden Securities Limited - Analyst : Okay. Thanks, Simon. And sorry, just a bit more granularity around that, the timing of that destacking event on the East wall there. Is that expected in the current quarter or sort of towards the end of the calendar year?

Question: Ben Lyons - Jarden Securities Limited - Analyst : Okay. Cool. The last one for me, maybe for Ryan or Stu. Just on the capital side, maybe if we can ignore the KCGM expansion, the rest of the bucket that's allocated to growth capital, as you sort of cast your mind forward into fiscal '26, I think we've got additional TSF capacity at KCGM coming up. But just like holistically, bigger picture, is there any reason to expect the growth capital allocation to reduce into coming years? Or should we just sort of think about? You're still opening up satellite bodies and punching new portals, et cetera, et cetera. So maybe just a general answer around that sort of growth CapEx allocation, please?

Question: Ben Lyons - Jarden Securities Limited - Analyst : Okay, awesome. Thank you very much. Appreciate that.

Question: Ben Lyons - Jarden Securities Limited - Analyst : Yes. Got it.

Question: Matthew Frydman - MST Financial Services Pty Ltd - Analyst : Yeah. So thanks, goodmorning, Stu and team. Can I ask one on, I guess, cash balance and shareholder returns? I'm sure it's one that we'll talk more about at the financial results. But just looking at the numbers at the end of the quarter. You've got over $1.2 billion in cash and bullion, $265 million net cash. Obviously, hopefully, that continues to go up with the cash generation you've alluded to in the second half and also a chunk of cash potentially coming in the door with the De Grey acquisition. You've got a buyback that's mostly complete. And as Ryan outlined, you've got dividend policy as well, which is pretty clear. So a chunk of that cash is going to come back to shareholders with the first half dividend. So I guess the question is, can you remind us how you're thinking about what sort of ranges you want to see the balance sheet in and you want to see that sort of drive powder cash balance sitting out given the gold price environment given your outlook on, I guess, cash generation and spend? How much cash do you need on hand versus -- is there an option to maybe repurchase the US dollar bonds, which have obviously had a negative currency impact? Or what are the other options for returning that cash? Thanks,

Question: Paul Kaner - Ord Minnett Ltd - Analyst : Yeah, hi Stuart and team. Thanks for taking my question. Just a quick one on mill recoveries there at KCGM. That's been a little lower for a few quarters. Is that mainly grade related or is there something else to call out? And I guess, what should we be assuming with these higher grades come through over the next sort of 18 months or so?

Question: Hugo Nicolaci - Goldman Sachs Group Inc - Analyst : First one just on Jundee. Will you want to just talk through the lower equipment and heading availability issues in the quarter, specifically, what were the issues on equipment? And then as a kind of slow on effect, how do you expect that to impact access to higher-grade material and production into the second half? Do you expect FY25 gold production at Jundee to be sort of around the same levels as FY24? Or maybe that should be down year on year now?

Question: Hugo Nicolaci - Goldman Sachs Group Inc - Analyst : Got it. So in terms of the impact into the full year, you'd expect a similar sort of gold production from last year?

Question: Hugo Nicolaci - Goldman Sachs Group Inc - Analyst : And then just second one around exploration full-year guidance at $180 million. You spent $118 million of that so far in the first half. In two plants, I guess, how should we expect that work to flow through first half drilling and exploration to come into the FY25 reserve and resource update? And then I guess going forward from here, how do we think about that exploration spend rate going forward beyond the second half? Maybe if you could sort of remind us on what areas are in focus next for some exploration work?

Question: Hugo Nicolaci - Goldman Sachs Group Inc - Analyst : Great. Thanks so much for color. I'll pass it on.

Question: Alistair Harvey - JPMorgan Chase & Co - Analyst : Good morning, team. Quick one for me. Ryan, just a follow up on the capital returns. You noted that the buyback, you like the flexibility of that could continue into the future. So just wanted to get a sense if the current program had made more sense in light of that low franking credit balance recently? And I suppose how you balance up returning cash to shareholders from devs versus your buyback?

Question: Alistair Harvey - JPMorgan Chase & Co - Analyst : Understood. Thanks, gents.