NSTYY - Northern Star Resources Limited (NESRF) Q3 2024 Earnings Call Transcript

2024-04-23 11:14:08 ET

Northern Star Resources Limited (NESRF)

Q3 2024 Results Conference Call

April 22, 2024 07:00 PM ET

Company Participants

Stuart Tonkin - Managing Director & Chief Executive Officer

Simon Jessop - Chief Operating Officer

Ryan Gurner - Chief Financial Officer

Conference Call Participants

Levi Spry - UBS

Kate McCutcheon - Citi

Matthew Frydman - MST Financial

Mitch Ryan - Jefferies

Al Harvey - JPMorgan

Ben Lyons - Jarden

Alex Barkley - RBC

David Radclyffe - Global Mining Research

Daniel Morgan - Barrenjoey

Presentation

Stuart Tonkin

Good morning, and thanks for joining us. With me today is Chief Operating Officer, Simon Jessop; and Chief Financial Officer, Ryan Gurner. I am pleased to present the group's March quarter performance despite adverse weather having an impact. With these events now behind us, we are focused on maintaining the strong operational momentum so far seen in the June quarter. And I'm particularly proud of our people who demonstrated resilience during the period and delivered our results in a safe manner. Thank you.

For the March quarter, we sold 401,000 ounces of gold at an all-in sustaining cost of AUD 1,844 an ounce, generating underlying free cash flow of AUD 143 million, which is up 40% from the December quarter. Each of our production centers remains in a positive free cash flow position. And as a group, we remain financially resilient in net cash position of AUD 174 million, with strong liquidity of $2.5 billion. This financial strength allows us to fund all of our growth investments, exploration activities and capital management initiatives.

As you can see in our results, KCGM stands out this quarter providing a glimpse of what's in store for this asset going forward. KCGM, our largest and lowest cost asset, delivered a positive step change operationally and financially with the Kalgoorlie production center generating the group's highest free cash flow per ounce. This performance is driven by increased access to the high-grade Golden Pike North Material, an area we'll be mining for the next 5 years. Getting access to this material was a multiyear effort, but the financial returns have been exceptional, and the 3-year effort is well worth it.

For the KCGM mill expansion, the enabling works were completed and on-site construction advancing to plan. It is exciting to see this activity underway at KCGM, which will double the plant's throughput to 27 million tonnes per annum and lift production to 900,000 ounces per annum by FY '29. And this will establish KCGM as a top 5 global gold mine. For FY '24, we expect to produce 1.6 million to 1.75 million ounces of gold at an all-in sustaining cost of AUD 1,810 to AUD 1,860 an ounce into a very healthy gold price, which is currently above AUD 3,600 per ounce.

Before I hand to Simon, Pogo continued to perform well with net mine cash flow of $21 million, bringing its full year contribution to date of $90 million. Quarterly gold sales were 59,000 ounces at an all-in sustaining cost of USD 1,567 an ounce. During the quarter, Pogo had a planned shut as well as experienced some unplanned downtime, which has since been resolved. Grades were lower than expected due to stope mine sequencing, although grades have increased so far during the June quarter.

And pleasingly, mine development rates continue to strengthen, averaging a monthly rate of around 1,600 meters a month from 5 development jumbos. Simon will now speak to the Australian operations....

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