Northern Star Resources receives approval for $1.5b KCGM expansion

Northern Star Resources (ASX:NST) has received approval for the $1.5b mill expansion of its Kalgoorlie consolidated gold mines (KCGM).

With a mineral resource of 28.3moz and an ore reserve of 12.2moz, Northern Star’s KCGM operation is one of the world’s largest and most significant gold mines.

Under the three-year construction process, the capacity of the processing circuit, centred on the Fimiston processing plant, will increase from 13mtpa to 27mtpa by FY29.

The new plant will have a high level of process automation, control and condition monitoring.

Increasing the throughput capacity will increase gold production and reduce unit rate processing costs, fixed operating cost per tonne of ore processed, potable water use per tonne of ore processed and sustaining capex.

Revenue and free cash flow will materially increase from FY27 and forecast cash earnings, net profit and earnings before interest, tax, depreciation and amortisation (EBITDA) is expected to increase while the gearing ratio is forecast to remain below zero.

Northern Star managing director Stuart Tonkin said the expansion in an exciting day for the company.

“The board’s decision to approve the KCGM mill expansion and optimisation represents the next stage to revitalise our largest asset as well as the surrounding district for decades to come,” he said.

“Expanding the processing capacity of KCGM will strengthen Northern Star’s portfolio, materially increase our free cash flow generation and progress our long-term strategy to be within the second quartile of the global cost curve.

“Further, the project is important in our sustainability journey and will also sustain hundreds of local jobs, economic and social investment and local procurement opportunities in the Goldfields region.”