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  • Gold miner Northern Star Resources (NST) flags potential to spend up to $1.4 billion to expand the Kalgoorlie Super Pit (KCGM) in Kalgoorlie, Western Australia
  • The company has presented three mill expansion options as part of the KCGM mill optimisation pre-feasibility study (PFS)
  • The expansions could boost annual production by up to 200,000 ounces, lower AISC by up to $200 per ounce and see a substantial increase in net profit value
  • Managing Director Stuart Tonkin says the PFS confirms the “enormous opportunity” for the well known Super Pit
  • Northern Star will now finalise the feasibility study, which will be followed by an investment decision
  • NST shares are up 5.27 per cent, trading at $7.39 each at 10:50 am AEST

Gold miner Northern Star Resources (NST) has flagged potential to spend up to $1.4 billion to expand the Kalgoorlie Super Pit in Western Australia.

The Super Pit (KCGM) is one of the world’s largest and most significant gold mines with a mineral resource of 27.4 million ounces and an ore reserve of 11.9 million ounces.

Northern Star bought 50 per cent of KCGM on January 3, 2020, and received 100 per cent control of the mine in early 2021 after the merger with Saracen Mineral Holdings.

Since then, NST has made major progress enhancing its understanding of the underground resource base.

The company has presented three mill expansion options as part of the KCGM mill optimisation pre-feasibility study (PFS).

The three mill expansion could boost annual production by up to 200,000 ounces, lower all-in sustaining costs (AISC) by up to $200 per ounce and see a substantial increase in net profit value.

The optimisation studies also ensure KCGM can make a significant contribution to sustainable mining and offer broader environmental social governance benefits in the WA Goldfields.

All three expansion options deliver significantly higher free cash flow, according to Northern Star.

Managing Director Stuart Tonkin said the PFS confirms the “enormous opportunity on offer at KCGM.”

“The PFS determined that the three mill expansion options are financially compelling and offer significant operational benefits to potentially create substantially more value than maintaining today’s 13 million tonnes per annum milling capacity,” he said.

“We will now embark on the final study phase to optimise the best pathway to generate superior returns for shareholders. We will not grow for growth’s sake but remain focused on the disciplined and transparent allocation of capital and a strong balance sheet.

“While we are confident and well-positioned to pursue a mill expansion at KCGM given access to a highly skilled workforce and our recent major project experience, maintaining the current 13 million tonnes per annum milling capacity is an option that remains firmly on the table.”

Northern Star will now finalise the feasibility study, which will be followed by an investment decision.

Mr Tonkin said no matter what the outcome of the final feasibility work is, “the KCGM pathway to 650,000 ounces per annum by FY26 remains unchanged.”

Just as the market opens for the day, NST shares were up 5.27 per cent, trading at $7.39 each at 10:50 am AEST.

NST by the numbers
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