Northern Star flags additional production downgrade
Northern Star Resources (ASX: NST) has flagged a further downgrade to its full-year gold guidance following weaker performance in the last two months and throughput issues at KCGM.The miner has warned that achieving even the bottom end of its 1.6–1.7moz guidance range is now “challenging”.Northern Star says its current best estimate is for FY26 production to exceed 1.5moz, after weaker-than-expected January and February performance caused by ongoing throughput constraints at the existing KCGM mill and lower mining productivity, especially at Jundee.The update marks a further deterioration from the cuts announced in January, when the company reduced group production guidance, raised AISC guidance and lowered KCGM’s expected output.In an investor call, Northern Star managing director and chief executive Stuart Tonkin said he recognised that, externally, it may appear the company had not been forthcoming with information.“That’s not the case,” he said.“In January, we absolutely thought 1.6moz was a very comfortable floor we would clear.“So to be sitting here as soon as now to say things aren’t going well, I get it, it’s as disappointing for us as it is our audience and we have to learn from that.”Until the expanded KCGM mill comes online, operations remain dependent on the existing mill, which has been struggling to maintain steady performance.Northern Star says the mill expansion remains on track for commissioning in early FY27.The miner will now undertake an operational review at Jundee, aimed at reducing costs and prioritising higher-margin ounces.“Front of mind for management and the board is that efforts to achieve the FY26 forecast do not compromise the transition to the new plant and have negative implications for Q1 next year,” Mr Tonkin said.“To deal with that concern, management’s focus over the next four months will be to set the company up to achieve its full potential from the start of FY27 and not on the achievement of short-term guidance above all else.“The production focus over this period will be on extracting ounces in the most effective way, from both a cost and mining efficiency perspective.”On the positive side, Northern Star said mining volumes at KCGM were tracking well, with ROM stockpiles continuing to build to about 100koz of high-grade ore at the end of February. The miner said this material would be processed in FY27, displacing lower-grade ore.
