Northern Star: A Solid Buy-The-Dip Candidate

2025-03-05 13:22:21 ET

Summary

• Northern Star Resources Limited had another solid quarter in fiscal Q2-25 and remains on track for annual production/cost guidance of 1.7+ million ounces at ~US$1,300/oz AISC.
• Notably, the company continues to generate solid net mine free cash flow despite the impact of hedges (~29% of sales) and elevated growth capex this year at KCGM.
• As for the bigger picture, the company is laying the foundations to build a ~2.4 million ounce producer in Tier-1-only jurisdictions, placing it in rare air among its peers.
• In this update, we'll dig into the fiscal Q2-25 results, recent developments, and whether NESRF stock is offering an adequate margin of safety at current levels.

All figures are in United States Dollars unless otherwise noted with an A$ in front of figure and based on a 0.65/1.0 AUD/USD rate. G/T = grams per tonne (of gold or silver). GEOs = gold-equivalent ounces. SEOs = silver-equivalent ounces. AISC refers to all-in sustaining costs. LOMP = life of mine plan. TPD = tonnes per day.

Q2 2025 Production & Sales

Northern Star Resources Limited (“Northern Star”) released its Q2-25 and H1-25 results last month, reporting quarterly gold sales (Q2-25 or calendar year Q4-24) of ~410,000 ounces at all-in sustaining costs of A$2,128/oz [US$1,391/oz] and H1-25 gold sales of ~804,000 ounces at A$2,105/oz [US$1,368/oz]. These quarterly results were slightly below its Q2-24 sales of ~411,600 ounces at A$1,824/oz AISC [US$1,186/oz], related to lower production at KCGM, Jundee, and Carosue Dam, offset by an increase in production at Pogo, Thunderbox and its Kalgoorlie operations....

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