Operator: Thank you for standing by, and welcome to the Northern Star September 2026 quarterly results. All participants are on a listen-only mode. There will be a presentation followed by a question-and-answer session. If you would like to ask a question, you will need to press the star key followed by the number one on your telephone keypad. I would now like to hand the conference over to Mr. Suresh Vadnagra, Managing Director and CEO. Please go ahead.
Suresh Vadnagra: Thank you. Good morning, everyone, and thanks for your time this morning and for joining the call. I started as CEO on 5 October, just a little bit over two weeks ago, and I am very pleased to be speaking with you today. There is just a little bit of feedback. Okay. I have spent the majority of my time over the past two weeks visiting our sites. My immediate priority has always been to establish a clear view of the business by visiting our sites and by talking to as many of our people as possible and getting their perspectives on the business, including what is going well and what are some of the opportunities for us to improve. Over the last couple of weeks, I have visited our sites in Kalgoorlie, including KCGM, and in Yandal.
Suresh Vadnagra: If I look back at what attracted me to Northern Star, it is absolutely the quality of our assets and the strong foundations on which we can build. My early observations after two weeks on-site reinforced the quality of Northern Star's assets and importantly, the quality of our people. They also reinforced the opportunity for us to improve consistency of delivery, strengthen accountability, strengthen capability, adopt better capital discipline, and translate all of that into sustainable cash flows and shareholder returns. If we now turn to the September quarter. For the September quarter, Northern Star sold 364,000 ounces at an AISC of AUD 3,217 per ounce. That is Australian dollars per ounce. We have had a solid start to FY27, with all of our sites delivering in line with plan.
Suresh Vadnagra: As I mentioned earlier, consistent delivery will be fundamental to our success going forward, with a focus on sustainable cash flows and attractive returns for our shareholders. At KCGM, we completed another important milestone through the quarter with the tie-in of the mill expansion into the existing plant. The focus now is on progressing commissioning and establishing stable, reliable operations that deliver the intended benefits of the investment. I mentioned earlier that my focus and my immediate priority was about getting to know the business. In parallel with getting to know the business, my immediate focus is also on ensuring we are set up to deliver and meet our commitments right across the portfolio. It is important to note that this extends well beyond just KCGM and is relevant to all of our sites and all of our projects and the business more generally.
Suresh Vadnagra: At KCGM specifically, this is also more than just delivering the current stage of commissioning. The focus is also on safely and efficiently delivering stage 2 and on making sure we are ready to ramp up the plant and operate it consistently at design level. From my perspective, in the short term, the focus has to be on delivery. This requires us to drive strong operating discipline, make sure we have the right capabilities right across the business, the right accountabilities, and to have a clear and relentless focus on execution. From my site visits so far, it is clear that we have a lot of opportunity and optionality right across the portfolio and across each and every one of our operations. Each operation has resource growth options to unlock value from that asset. Making sure we are pursuing the right options and optionality to deliver shareholder value will be critical.
Suresh Vadnagra: Capital discipline is an important aspect of making the right decisions. Investment decisions have to be supported by robust business cases, attractive returns, and with a clear view of their impact on the business as a whole. I have not mentioned Hemi so far, but that remains an important growth opportunity for Northern Star. Engineering and design work is progressing towards a final investment decision in late FY27, subject to various approvals. As with all major investments, we need to maintain discipline around capital risk and expected returns. Unlocking Hemi and setting us up to deliver it efficiently and effectively will absolutely be a priority. Over the coming weeks, I will continue to assess our priorities and our direction. I am acutely aware of the importance of providing the market with clarity on our forward plan, and I intend to do so in due course.
Suresh Vadnagra: I want to complete the work of getting to understand the business and assessing our priorities before drawing any conclusions. In the meantime, our focus must remain on delivery and on running the business as well as we can and delivering on our commitments. I will now hand over to the team who will provide you with an update on the KCGM commissioning, our operating performance, the outlook for FY27, and on the financial results. Steve, over to you.
Steve McClare: Thanks, Suresh. Good morning, everyone. During the quarter, we completed the tie-in of the existing circuit to the expanded plant. That was on 28 September. About 2 weeks later than anticipated due to minor commissioning-related issues associated with the thickener and ball mill. These issues have since been addressed. The plant has been handed over from the project team to operations, and the commissioning and ramp-up are continuing. The priority now is to resolve issues as they arise, establish stable, reliable operations. Achieving the nameplate capacity is important, but sustained performance is what will ultimately deliver the benefits of the investment. Looking ahead, stage 2 construction is expected to be completed shortly after the end of H1, with commissioning scheduled to commence in early H2 FY27.
Steve McClare: It will simplify the processing circuit, deliver an expected 1% to 2% recovery uplift, and eliminate concentrate haulage between KCGM and Gidji. The KCGM mill expansion and readiness CapEx was AUD 221 million in the September quarter. Our FY27 forecast spend remains within the stated guidance range of AUD 350 to AUD 470 million. I will hand over to Simon, who will take you through operating performance across the portfolio, including the mining and processing at KCGM and our outlook for the remainder of FY27.
Simon Jessop: Thank you, Steve, and good morning. At KCGM, the focus is now on operational ramp-up following completion of the mill tie-in. It was very pleasing to see the processing team successfully operate the old milling circuit of Fimiston and Mount Charlotte with parts of the new process circuit in parallel for a large portion of the quarter. The old circuit of four mills and associated flotation areas has now been turned off, with the KCGM processing team focusing only on the new flow sheet. We are continuing to clean out mill material from the old circuit as we capture all remaining gold in the circuit. The old redundant parts of the plant will be fenced off at that particular time. From an open pit mining perspective, we mined 23 million tonnes for the quarter, which was on plan.
Simon Jessop: This was despite enduring a very wet quarter with 125 mm of rain in Kalgoorlie. Golden Pike North continues to provide a source of high margin ore while waste stripping at Fimiston South continues as planned. Underground mine development achieved a record of 10.3 kilometers in the quarter across the Fimiston and Mount Charlotte mines. This is a very important lead indicator for increasing the stope ore supply at a higher grade, which will lift the average mine grade from the underground mines in the future. Underground mine grade at KCGM is 1.7 grams per tonne. KCGM, together with Carosue Dam and Kalgoorlie operations, which make up Kalgoorlie Production Centre, generated mine operating cash flow of AUD 433 million and a net mine cash flow of AUD 15 million after AUD 418 million of growth capital investment, primarily associated with the KCGM mill expansion.
Simon Jessop: Gold sales were 194,000 ounces at an AISC of AUD 2,919 an ounce, reflecting planned shutdowns and the impact of the KCGM commissioning on grade and recovery. I would like to touch on power across the goldfields. During the quarter, we experienced one major Western Power fault in late August. However, at that time, we had two of our Parkeston generators online. The interruption did cause the KCGM milling circuit to trip. However, a restart occurred quickly, and we were reconnected to the grid in the following two hours. Historically, the power outage issues increase over the summer months and associated downtime, not over the winter months. At Yandal, the production center generated mine operating cash flow of AUD 160 million, and a net mine cash flow of AUD 138 million after AUD 22 million of growth capital investment.
Simon Jessop: Gold sales were 118,000 ounces at an all-in sustaining cost of AUD 3,687 an ounce, with planned shutdowns at Jundee and Thunderbox affecting the quarter. At Jundee, a key highlight included improved delivery consistency following the operational review. Mine grade of 2.5 grams per ton was in line with the plan and is expected to increase in the H2, reflecting a higher contribution from Griffin, Cook, and the Amado ore sources. Meanwhile, Thunderbox delivered record quarterly gold sales, supported by improved feed rates, largely from Orelia and a drawdown of gold in circuit. The paste plant at the Wonder Underground mine was commissioned during the quarter, supporting ore body recovery and future mining productivity. At Pogo, our mine operating cash flow was US$63 million and a net mine cash flow of US$39 million after US$24 million of growth capital investment.
Simon Jessop: Gold sales were 53,000 ounces at an all-in sustaining cost of US$2,307 an ounce, reflecting the planned processing plant shutdown, infrastructure rehabilitation of the underground ore bin, and lower grade and recovery. Mine grades of 5.9 grams per ton, below the reserve grade of 6.8 grams per ton, were in line with expectations, reflecting the mine and stope sequencing, and are expected to remain variable as we saw in FY26. Across the portfolio, our focus remains on reliable operating performance, cost control, and delivery against FY27 guidance. At KCGM, the priority is to establish sustained processing performance as commissioning progresses on the new circuit. At Pogo, the return of the underground ore bin handling infrastructure is expected to support improved mining rates throughout the December quarter. I will now hand over to Ryan to cover the financial results, cash flow, and capital position.
Ryan Gurner: Thanks, Simon, and good morning, everyone. As Suresh highlighted, we have had a great start to the year. Turning to the financial results, I will focus on the group's cost base, cash flow, capital investment, and balance sheet position. Total group cash operating costs reduced 3% quarter on quarter to AUD 893 million, while total group all-in sustaining costs were broadly unchanged at AUD 1.17 billion. Total group all-in costs, which includes growth capital and exploration, reduced 5% from the prior quarter. Importantly, all three production centers generated positive net mine cash flow, despite the planned shutdowns, commissioning activity, and infrastructure works undertaken during the quarter. After AUD 113 million of corporate tax payments, AUD 51 million in exploration, and AUD 76 million in equipment finance and lease payments, underlying free cash flow was an outflow of AUD 31 million.
Ryan Gurner: The company remains in a strong financial position with cash and bullion of AUD 1.2 billion at 30 September, and substantial available liquidity to support the business and growth pipeline. Looking through the balance of FY27, we expect operating and cash flow performance to strengthen, consistent with the H2 weighting embedded within our guidance. This is expected to be supported by the progressive ramp-up of the expanded KCGM plant, a reduction in KCGM mill expansion expenditure, completion of the key underground infrastructure works at Pogo, and greater exposure to spot gold prices as the hedge book continues to unwind. Turning to capital investment. Sustaining capital was AUD 220 million for the quarter, with the increase from the June quarter primarily reflecting higher investment at Thunderbox, Pogo, and at Jundee. At Thunderbox, this included deferred stripping at Bannockburn, together with tailings capital and tank refurbishment works.
Ryan Gurner: At Pogo, expenditure focused on key infrastructure projects, including remediation of the underground ore bin, which is scheduled to return to service later this month. At Jundee, mine development progressed in line with plan, with development activities continuing to open up future mining areas that support the operation through the H2 of FY27. Growth capital investment across the operating centers totaled AUD 473 million for the quarter. At KCGM, investment continued across the Fimiston South cutback and underground development at Mount Charlotte and Fimiston, while KCGM mill expansion and readiness expenditure totaled AUD 221 million. We expect expenditure associated with the mill expansion to reduce materially during the December quarter, with stage 2 commissioning scheduled to commence early in the H2 of FY27. As the commissioning progresses, the main focus remains on establishing stable and sustained operating performance from the expanded plant.
Ryan Gurner: At Hemi, engineering design permitting activities continue to progress, with final investment decision remaining on track for late FY27. Turning now to the balance sheet. Subsequent to quarter end, we added a new AUD 500 million tranche to our revolving credit facilities on similar terms, maturing in October 2029. This increases total bank facilities to AUD 2.25 billion. During October, we utilized AUD 500 million of those facilities ahead of the FY26 final dividend payment. This was a prudent liquidity management measure that maintained our financial flexibility while retaining substantial cash on hand to support our investment program. No shares were acquired under the buyback program during the quarter. The program remains open and available as part of the company's capital management framework, and of course, is subject to the company's security trading policy.
Ryan Gurner: Our capital allocation priorities remain unchanged, with a continued focus on balance sheet strength, disciplined investment in growth, and delivering returns to shareholders. Depreciation amortization for the quarter was just over AUD 1,050 per ounce, within our FY27 guidance range of AUD 1,000 to AUD 1,200 per ounce. The group also recorded a non-cash inventory credit of AUD 37 million, principally reflecting stockpile movements at KCGM and Thunderbox operations. From a tax perspective, we maintain FY27 cash tax guidance of AUD 450 million to AUD 550 million, with AUD 130 million paid during the September quarter. There has been no change to our current estimates for landholder duty associated with the De Grey and Saracen transactions. A reminder, the company will pay its semi-annual coupon payment and annual insurance premiums during Q2. Finally, we continue to unwind the hedge book during the quarter.
Ryan Gurner: At 30 September, remaining commitments totaled 648,000 ounces at an average price of AUD 3,423 per ounce. I will now hand back to Darcy for Q&A. Thanks very much.
Operator: Thank you. If you would like to ask a question, please press star one on your telephone and wait for your name to be announced. If you would like to cancel your request, please press star two. If you are on a speakerphone, please pick up the handset before asking your question. Your first question today comes from Kate McCutcheon from Bank of America. Please go ahead.
Kate McCutcheon: Hi, good morning, Suresh, and good to connect again. You've outlined your priorities today in the release we've got. But I guess, how do we think about the timing of some of those things and that list? If I think about it, I guess you've got Gold Fields in the background there. There's your endorsement of the FY27 guidance, and the market's expecting a multi-year outlook. Can you just kind of step through, maybe those priorities again, some of the key challenges, and how we should think about the timing there?
Suresh Vadnagra: All right. Thanks, Kate, and yes, good to connect again after quite a while. That's a fairly all-encompassing question, so I'm going to try and sort of tackle it bit by bit. I'll just sort of reemphasize the point that I'm just into week 3 of my tenure as the MD and CEO of Northern Star, and that my immediate focus and immediate priority has been to get out to the sites and start getting my head around the business. There's a lot of aspects to the business that I still need to understand better to really calibrate our priorities and make sure that we're in a position to deliver against those priorities. As I mentioned at the beginning of our call today, the immediate focus is on delivery.
Suresh Vadnagra: We've made a series of commitments, be it production commitments or timing commitments that are attached to the KCGM mill expansion, attached to production, attached to growth projects, and my focus is very much on working with the team to make sure we are positioned to deliver on those commitments. That's the focus. We've made a commitment. We need to consistently deliver against those commitments. In terms of our FY27 guidance, I'll probably firstly touch on the performance in Q1 by taking into account that Q1 was a transition quarter for the business, especially with the tie-in of mill expansion. We were able to deliver in line with our plan and in line with the good guidance for Q1. All of our forecasts and projections demonstrate that we will deliver in line with our plan for FY27, and in line with guidance for FY27.
Suresh Vadnagra: There's nothing that I've seen working with the team that would suggest differently. What I will say, though, as we work our way through these things, if there are any emerging risks that cause us to rethink guidance, then we'll transparently and openly communicate that to the market appropriately. If for whatever reason we need to revise guidance, we'll do that equally, transparently, and openly. On Gold Fields, yep, that's in the background. I think there's nothing much more to add to our position, both in terms of management and the board, than what's already been reported in the media and elsewhere. Our priority is absolutely to work in the best interests of our shareholders.
Suresh Vadnagra: Right here and right now, delivering on our commitments is the biggest lever of delivering in the best interests of our shareholders. I think I've covered most of the topics. If I've forgotten anything, Kate, then just please jump in.
Kate McCutcheon: Okay, thank you. That's good. We threw you in the deep end there. Just on the-
Suresh Vadnagra: You can give me a score later.
Kate McCutcheon: Just on the Super Pit compared to where the team thought you would be versus when you came, well, not you, but the team came with guidance. Have we had any changes to the timeline there? Just the speed, grade, and recovery with both those metrics in line with the plan for commissioning. If you can just help me tie it together with the update today versus where you thought you would be.
Suresh Vadnagra: Look, I might just throw to Simon to answer the question in detail, and he will probably rely on Steve to add a little bit more color to a couple of items. Then I will make some just overarching comments at the end.
Simon Jessop: Yeah, thanks, Kate. Simon here. Look, to start with, I would just like to really highlight how much of a high-quality build the new process plant is. Certainly for the team there on site, it is a major step up from the 37-year-old plant, which we turned off on 20, 21 September. So really great to have the old plant behind us and have the full team just focused on the new plant. In terms of details around the plant, look, the crushing circuit is certainly performing very well. There are minor areas to tidy up there, but fundamentally, the crushing circuit is fully commissioned and performing extremely well. So very happy with that. In terms of the rest of the process plant, the new plant, it is really now running as an integrated circuit. So that is the key.
Simon Jessop: We have commissioned, Steve and his team have commissioned the various elements of it, and we have run up the ball mill, the float circuit, the gravity, all the different elements of it. It is really only on 28 when we tied in the old Fimiston SAG into the new circuit. It is now working through screens, densities, mill weights, all those sorts of elements, and really ramping it up. Focusing on runtime and commissioning all those various elements as an integrated process plant. Look, in terms of the mining had a very good quarter. The open pit delivered despite a lot of rain, which was fantastic to see. Golden Pike performed to plan. The stripping in the southern end of the pit was on plan, and the underground had a great start to the financial year. So really happy with the mining inputs.
Simon Jessop: The ounces that we put onto the stockpile, it is now really focused all hands on deck on the new process plant, which we started on the 28th. I think that answers most of it.
Kate McCutcheon: Okay.
Simon Jessop: I might just go to Steve, if there is any more color on that commissioning Q1.
Steve McClare: Yeah, thanks, Simon. Kate, I think the things that we are seeing today are just the small but annoying disruptions. It is always a way in billion-dollar-plus plants, it is the couple hundred dollar items that take things down or things you just need to tune and rectify. So when we look at things like the ball mill, motors and stuff like that, we had to basically get the temperature within the oil. We have had to do insulation. We have had to make the pumps continuously run and stuff. It has just taken time to get those sort of bugs out. But we are very pleased we have not got perpetual problems, or we have not had any fatal flaws or anything like that. So very pleased. As Simon said, a lot of time and effort has gone into the design of the plant.
Steve McClare: His team was heavily involved in trying to get most of the bugs out in the design phase, and now we handed them over, and it is great to see the full team focused on delivering the one future.
Suresh Vadnagra: Maybe if I could add just a couple of observations from my part. KCGM was the first site that I visited, and going to have a look at the plant expansion was one of the priorities while I was on-site. For those of you that know me, whilst I have got a lot of operational experience, I have also got quite a bit of experience in building and commissioning greenfield and brownfield major projects. I can list some of those another time. What I saw, in terms of the quality of the engineering, the quality of the construction, and the quality of the plant that was built, is as good as anything else that I have seen in my career. We are at the very early stages of commissioning, right? It is only normal for things to be quite variable at this stage.
Suresh Vadnagra: We get some good days, we get some not so good days. Nothing that we are seeing at the moment, just to reinforce Simon and Steve's comments, is suggesting that there is any fundamental issues with the quality of the engineering, the design, or the quality of the construction, right? The sorts of issues that we are facing are what you would expect at this early stage of commissioning.
Kate McCutcheon: Okay. That is helpful. Thank you.
Operator: Thank you. Your next question comes from Daniel Morgan, from Barrenjoey. Please go ahead.
Daniel Morgan: Hi, Suresh and Tim. I just wanted to chase or follow on from Kate's question regarding the plan from here. What is the latest view of introducing higher grades to the processing plan over time? I imagine you would expect you put low grade in right now and you slowly bring that up when you have stability. I imagine you haven't got recoveries and stability where you'd like it yet. Putting all that together, I would imagine you would expect the December quarter to be the low for ounce production. Is all of that accurate, or could you help me calibrate what December looks like?
Suresh Vadnagra: Simon?
Simon Jessop: Dan, in terms of the recoveries, what we saw in Q1 was very, very promising in terms of the float circuit performance on not a lot of data set, in terms of an integrated process flow sheet. You can see that recovery was 76% for the quarter. But early on, we are seeing very good float recovery grade mass pull. It's really around just stabilizing gravity circuit, running as an integrated circuit and getting the grind right. But ultimately, we are seeing good recoveries. We have got a lot of high-grade material there, so sometime during the quarter, we will start to increase the blend of some of that high-grade open pit dirt and underground feed back into the process plant. We've got the luxury of this big stockpile. Mining's going extremely well.
Simon Jessop: It's when we've built the confidence on the flotation and the gravity circuits, really then it's start to increase that high grade back into the blend. It's going to be progressive over the quarter.
Daniel Morgan: Okay, thank you. Just a little bit of detail on Carosue Dam. You call out Quina as a new ore source as an underground mine. Can you give us an idea of the scale of this contribution in terms of tons grade and duration to the group?
Simon Jessop: Yeah, sure. In terms of Quina itself, as we have mentioned in the quarterly, we are digging the box cut at the moment for Quina, expect to finish that over the remainder of this quarter. Then sometime in H2, we hope to cut a portal there and start that particular mine. In terms of future ore sources at Carosue, it will not feature in FY27, so it is in future years. But look, at a high level, reserves wise, it is sort of a couple of million tons at a higher grade. So, around that 3 to 3.5 grams per ton for Quina as a starting reserve.
Daniel Morgan: Okay. Thank you very much for your perspectives, Simon and Suresh.
Simon Jessop: Thanks, Daniel.
Operator: Thank you. Your next question comes from Hugo Nicolaci from Goldman Sachs. Please go ahead.
Hugo Nicolaci: Morning, Suresh, Simon, Steve, and Evan, broad the team. Look, firstly, just to pick up on Kate and Daniel Morgan's question, and further elaborate a point on the KCGM ramp up. If I look at the September quarter, look, probably other than that outperformance driven by the 2.5 weeks of continuing to run that old plant, which probably added maybe 20,000 ounces to the quarter on a back of the envelope. Can you just maybe talk through a little bit more sort of where you expect utilization on the new plant to be sort of in the coming quarters? Do we just sort of shift to the right that sort of timing of ramp up where utilization is probably, maybe 70% to 80% the December quarter and then continues to improve through the rest of FY27?
Hugo Nicolaci: And then just on that grade piece, is a gram sort of too low as you process that mineralized waste and ramp up through the December quarter? Or should we be thinking, that you exit the quarter closer to your feed grades that you had in the September quarter? Thanks.
Simon Jessop: Yeah. Thanks, Hugo Nicolaci. A few in there. So in terms of utilization, really it is building up on what we have talked about previously, which is a ramp up curve for a process plant of this size. So we are trying to aim at sort of 60% and then it ramps up progressively as we start to iron out those small things that Steve was talking about that just take us down. So that is going to be a journey over the rest of FY27. Q2, we will get some good momentum in terms of ramping up the process plant. And really H2 is where we have had a decent amount of time running the integrated process plant. And like I said before, it is just getting mill weights, densities, commissioning those screens so we get the runtime that we expect out of those elements of the plan.
Simon Jessop: So you are going to see it ramp up from the 2.5 million tons we did last quarter. The recovery will just increase from where we are going, and once we get good confidence around those elements of the circuit, the float and the gravity, then we will introduce the feed. So on a quarterly basis, you are going to see the feed probably go, the head grade will go down from this quarter because we ran most of the quarter sort of business as usual on the old plant while we are waiting for the tie-in. So the feed grade will come down, the volume of tons will go up, and then it will stabilize and it is just more tons going forward.
Hugo Nicolaci: Part of that transition period.
Suresh Vadnagra: Sorry, Hugo.
Suresh Vadnagra: No, you go ahead.
Suresh Vadnagra: Yeah. Perhaps I will just reinforce that in terms of what we are seeing right now, noting that it is still quite early in the time process.
Suresh Vadnagra: Right. Yes, there are good days, yes, there are bad days, but it is consistent with what we would expect for this stage of commissioning. Our view is that where we are at right now puts us in a good position to deliver on full year guidance, and therefore, whatever people would consider the quarterly results to be as well in order to deliver on that full year guidance.
Hugo Nicolaci: Yeah. No, got it. That is helpful color. Then maybe just one on Jundee. Looks like your mining rates were pretty flat quarter-on-quarter as Jundee and Ramone were ahead of plan, but your mining costs actually came down materially in the quarter. Just wondering if you can talk to what drove that and if the AUD 105 a ton you are seeing is sustainable from here, or whether you expect that to then revert back to more like that AUD 120, AUD 150 a ton going forward?
Simon Jessop: Yeah. There is obviously quite a bit of change we enacted over the last quarter of financial year 2026. During the quarter, we did see some of those mining costs start coming down and stabilizing. You see the quarterly average. But I am very happy with the Jundee operation in terms of that transition to what we see at the moment as the game plan for the Jundee asset. But we made some pretty significant changes there in Q4, leading into Q1. It was around 20, 22 bits of major equipment came out of Jundee. Around 190 personnel were pulled out of that asset to reset the cost base to where we see it is today. So, there are absolutely zero redundancies for all of that, and everyone was dispersed, contractors and ourselves, across the rest of our business.
Simon Jessop: That was a great result, well executed by the team. Mining costs will stabilize around where they are at the moment. We will focus on the drilling and execution of the plan.
Hugo Nicolaci: That's it, powerful. Thanks a lot.
Operator: Thank you. Your next question comes from Matthew Frydman from MST Financial. Please go ahead.
Matthew Frydman: Sure. Thanks. Morning, Suresh and team. Can I firstly ask at Pogo, the ore bin and haulage infrastructure works that you are conducting there, what will they enable specifically? Do they deliver any potential productivity improvements? Do they unlock any new stockpiling area or buffers in the system? Or is that purely, I guess, maintenance or kind of same business rehabilitation work? Also, I guess, was the lower grade in the quarter a function of those works and constraints, or was it purely down to the mining sequence? Thanks.
Simon Jessop: Yeah, thanks, Matt. The Pogo bins had 20 years of material go through that. So at the end of the day, it is worn out to much larger than its original size. So we refurbished and bolted and meshed that with fibercrete all the way to the bottom, which took most of the quarter. Really, that is to put another 20 years of life, probably 30 years of life back into that bin. So it is more risk mitigation for large slabs or things falling off the bin. The team has worked on that for two years, and really they have executed extremely well. I saw it a few weeks ago, when I was at Pogo, just the last parts of the refurbishment and that is finished and behind us now. By the end of this month, we will be back on the ore bin, which will be fantastic.
Simon Jessop: That has made Q1, as planned, difficult to execute because all the material has been going outside the portals, getting crushed, and then sent up to the mill in trucks and put through the E-feeder. The blue tube that people have seen on various pictures of Pogo has been out of action while we have been finishing the bin. That has put pressure on the mining sequence. As planned, we did plan this for a long, long time. Q1, really happy with Pogo and the team and how they have delivered it. Getting back on the ore bin will reduce trucking hours, TKMs, speed up the cycle, and get back into the higher-grade areas. As you saw in FY26, grade was quite variable between 5.5 grams through to 7.8 grams, and we averaged 6.7 for the year against a reserve of 6.8.
Simon Jessop: Expect to see that same variability, but it will be easier for us going forward as we are back on to business as usual for winter.
Matthew Frydman: Got it. Thanks, Simon. Maybe secondly, looking across the portfolio more broadly, obviously we had an operational review at Jundee earlier in the year. The market did not really get any kind of visibility on the specific outcomes from, apart from the additional commentary that you just gave to an earlier question, Simon. So appreciate that. I am wondering, is there any asset level operational reviews that are still ongoing, and could these result in any asset sales or kind of rethinking of the portfolio? Are there any active processes that might result in a potential asset divestment? Thanks.
Simon Jessop: I will speak operationally first and then probably hand over to Suresh. In terms of reviews of assets and how mines are performing within each particular production center, that is ongoing. We do that business as usual. So we are always looking very closely at the detail of each specific mine. Is it performing to plan? Do we need to adjust things? Where are the opportunities we can unlock ahead of plan? So I would not say we do not do that work and then we are waiting for a review. We are consistently always reviewing the performance of the individual assets that make up, feed into one process plant in particular, and it is ongoing. So Jundee have had that review last year. Really happy with the outcome and how the teams put that together and executed it. And it is something that we do all the time.
Suresh Vadnagra: Thanks, Simon. If I could build on that with a couple of comments. In the 2 weeks that I spent on site meeting each of the site teams, it was clear that there is an active process by the site teams and the planning teams to look at each of their individual assets and assess and reassess the way we are operating those assets, and is there a way for us to unlock further value or improve the resilience of those assets. The Jundee review that Simon mentioned earlier is the product of those types of assessments. Obviously, I would like to apply my own lens to it as well, with time, and it is an area that is high on the agenda.
Suresh Vadnagra: Just to satisfy ourselves that we are looking at it from every possible angle, and making sure that we understand the resource endowment, and the opportunities for us to more effectively and more value creatively, tap into that resource endowment. At a portfolio level, again, that is something that Northern Star does continuously and actively. The board highlighted that a few times in the recent past. Where I am at right now, as I am looking at some of that historical work as well as the current work to understand what the conclusions from that work were and what additional work might be necessary, and whether that triggers us to think differently about things.
Matthew Frydman: Got it. That is pretty clear. Thanks, Suresh, and thanks, Simon, for your comments also.
Suresh Vadnagra: Thanks, Matthew.
Operator: Thank you. Your next question comes from Levi Spry, from UBS. Please go ahead.
Levi Spry: G'day, and good morning. Thanks for your time. Maybe just one quick one on Hemi, and then maybe come back to that strategic question you just had. In terms of your confidence around the FID late FY27, can you just work back from there? So you started these trials. Can you just play the movie as to what happens in between interactions with the regulator? So we can feel like we understand the permitting process a little bit better and that side of things.
Suresh Vadnagra: Sure. I might get Steve to give you a little bit more detail on where we're at and what the process between here and FID and late FY27 is. Then I'll add any comments if necessary.
Steve McClare: Thanks, Suresh. Levi, at Hemi at the moment, what we actually have active in the field is the completion of that pumping trial. So we're basically taking water from the mine area. We pump it out about 7 kilometers. The test is really about the reinjection and can the system we've designed get the reinjections that we assumed, in terms of Because that's a fundamental thing to be known and defined, and that wraps up within the next 3 weeks of a 3-month trial. So that's everything we've seen to date has been very pleasing. We're confident in what we've seen, subject to no surprises in the next 3 weeks. That's all progressing to plan.
Steve McClare: You saw that we released the reserve earlier this year, and a lot of the work we are doing at the moment is about getting the metallurgical parameters, the mining schedule, and some of the changes we have made to the plan to bring that together as an integrated package. The idea is that we would have that pretty well locked down by this calendar year, and we build into an updated feasibility by the end of, say, Q3, and that is the foundational piece that goes into a FID. I must counter that we have got new board members, we have got Jeff Quartermaine on our committee, et cetera. We have got Suresh. We will bring that all up to speed. That is the plan as it stands today. We are very pleased to have fresh eyes looking at the project and looking at what we are doing. It is all going very well to this stage.
Suresh Vadnagra: If I could just reinforce a couple of comments that Steve made. From our perspective, Hemi is a key part of Northern Star's future, one of the most compelling organic growth opportunities that we have got within the portfolio and a well-recognized value lever. So we are doing everything we possibly can to get to the point where we can make FID in late FY27 and advance the project. Earlier in the introductory comments on the call, I said that my focus at the moment is on delivery. It is not just on operational delivery, it is also on delivery of all of our project milestones and commitments, and this is one of those key ones that I am going to be putting a lot of attention into. So Steve and the team are working hard to deliver on that timeline, and to advance the project in line with our aspirations.
Levi Spry: Yeah, that is great. Thanks for the extra color. Then maybe just tying this into the previous question there from Matt, or maybe the earlier one around expectations on the multi-year guidance. Can you sort of just help us think about those key value levers that you call out now, how you are prioritizing them, and what, I guess maybe, any sort of CPs might be in terms of how we should think about timing?
Suresh Vadnagra: Yeah. The focus is very much on delivery at the moment. Firstly, focusing on the immediate milestones that are in front of us, as well as focusing on some of the longer-term milestones and making sure that we are doing everything we need to do to be able to meet those commitments and deliver on them, and that we are set up to deliver on them effectively as well. I am acutely aware that there has been, in the past, some expectations built around us releasing medium-term guidance, perhaps even conducting market days and investor visits. To be honest, I have not actually turned my mind to those things just yet. I have not considered them at all. I have sort of explained a few times where my focus has been so far.
Suresh Vadnagra: That is something I am going to have to take on notice and engage with the team and the board on and come back to all of you with a more considered answer.
Levi Spry: Got it. No problems. Thank you. Thanks for your time.
Operator: Thank you. Your next question comes from Jonathan Sharp from J.P. Morgan. Please go ahead.
Jonathan Sharp: Yeah, morning, Suresh, and welcome, and thanks for taking my questions. Just first question on cost. You have said that you expect cost to improve through the year, which I think is expected, but are you just confirming the planned profile or is September giving you more confidence in a better full-year outcome? Are you expecting December quarter to be lower than the September quarter or is it the H2?
Suresh Vadnagra: Ryan?
Ryan Gurner: Hey, Jonathan. Yeah, I think it is all to do with the ramp up at KCGM. I think if you look across the portfolio, the assets are quite stable. Simon has spoken to Pogo, so the H2 certainly from a unit cost perspective will be better because we will have higher tonnes, better grades. So we are expecting that to lower. As I said, across the portfolio, I would say they are broadly going to remain sort of consistent subject to macro costs and changes like oil, gold price royalties, things like that. At KCGM, though, yeah, our expectation is that cost per ounce does drop as we increase throughput and availability rises.
Jonathan Sharp: Okay. Nothing has changed in terms of the original plan and potentially, September quarter giving you more confidence. Is there anything there?
Ryan Gurner: Well, it gives us confidence we will stay within our guidance, which is what we have stated today. As I said, I think stability helps the outlook on these things, Jonathan. Again, if there are no macro changes, oil is pretty volatile. Is that going to blow out our costs? Probably not, but it impacts them. So I guess what I am saying is we have got confidence that we are going to meet our guidance in our cost base for our first 90 days, and we have got confidence in the H2 of what we see in the plan.
Jonathan Sharp: Okay, great. Thank you for that. Second question, just really interested in your first impressions, Suresh. I appreciate you have only been there a couple of weeks, but I also know you are very experienced. So, what has stood out so far, good or bad? Probably more importantly, if we are sitting here in 12 months, what is the one thing you would want to have done?
Suresh Vadnagra: Yeah. Maybe I will start by answering the back end of the question before the front end of the question. I would absolutely, in 12 months' time, want to have, together with the team, achieved consistent and reliable delivery quarter on quarter. While working with the team, I want to understand all the opportunities for us to unlock the full potential of our portfolio and to have clear plans on how we would go after that potential, that additional potential, and absolutely advance unlocking and realizing the full value of Hemi. So at an early and at a high level, those are some of the priorities. That is not everything, but that is where I would like to see ourselves in 12 months' time. All of that is really designed to deliver consistent, reliable, and attractive returns to our shareholders.
Suresh Vadnagra: In terms of my first impressions of the business, having spent a couple of weeks on site, I think there is a lot of positives to really build from. I was particularly impressed by the enthusiasm that a lot of our people have towards the work that they are doing, the sites that they are operating in, the opportunities to do things differently, and the business more generally. That was infectious. It is important for us to make sure that that enthusiasm is absolutely directed at the right issues. I am not saying that it is not, but it is absolutely important for us to make sure that that enthusiasm is directed at the right issues.
Suresh Vadnagra: I mentioned earlier that the 2 weeks on site just reinforced the quality of our assets, and the portfolio more generally, not just in KCGM, but more broadly, but absolutely KCGM, there is no doubt in my mind it is a Tier 1 asset. The plant expansion quality is as good as I have seen, which gives me a lot of confidence in that asset really generating very attractive revenues going forward. If I think about it outside of those key points, across all of the sites, as I mentioned earlier, I saw lots of opportunities for us to grow or growth opportunities, if I can describe them that way. That could be through resource extension, near mine exploration, various other opportunities. But through all of that, I saw some real opportunities for us to strengthen our operating discipline, strengthen accountability, strengthen our capability.
Suresh Vadnagra: Enhance what is already a high focus on costs, execution, and adopting capital discipline. If we look at those resource extension opportunities, there are lots of opportunities in front of us. We just need to make sure that we are focused on the ones that are going to move the needle the most, and make the biggest difference to the business and to the shareholders more generally.
Jonathan Sharp: Okay, thanks. Maybe I will just follow up with something there. Just turnover. How is turnover looking? What are you thinking about turnover? Has it slowed down? Just any update there?
Suresh Vadnagra: Well, maybe I will have a first crack at that, then I will let Simon step in with any other comments. If we look at our turnover rates, just particularly over the last quarter, we have seen that tapering off, which is a good sign. It is not necessarily reducing yet, but it has flattened off in terms of turnover rates. Maybe it is a product of some of the other labor market action that is happening in Western Australia at the moment, but I doubt that. If I look at turnover more generally, having had the experience recently, managing a fairly global portfolio with assets right around the world, what I am seeing in our operations is not particularly different to what we were seeing in other Australian operations in my previous role. In fact, in some other parts of the world as well, particularly in Canada.
Suresh Vadnagra: Turnover is becoming an industry-wide issue, especially due to the amount of activity that is happening in the industry at the moment. That does not exempt us from focusing on it, from making sure that we establish a culture in the organization that really engages our people, and a culture where they wake up and want to come to work every day. Establish a culture where they see growth and career opportunities in front of them within the organization as well. The current noise around the company, the market activity around the company is important to also recognize as we are doing that. It does create a lot of anxiety and uncertainty for people.
Suresh Vadnagra: In my experience, the best thing that we can do in these sorts of situations is communicate frequently and transparently, keep people focused on the things that they can control, which is delivering outstanding results and delivering on the commitments that we have made. Simon, I am not sure if you would like to add anything to that.
Simon Jessop: I think that is pretty comprehensive. Our turnover has stabilized in that 25% to 30%, if you had to pick a number. It varies depending on work groups. There is obviously a lot of operations kicking off around Western Australia in particular. We have seen it flatline and stabilize there. We are continually working across the business to try and provide internal opportunities for people to move within the business, rather than leave the business to get the same opportunity. We work through those areas consistently. It is a challenge. It is higher than it has been a couple of years ago. We have got to step back and have another look at it. If I come back to Jundee, it was a great example of we had to resize that particular operation, and there were zero redundancies.
Simon Jessop: Everyone was redistributed across contracted workforce and their own back into the business. That is the strength of having multi assets across the portfolio. Constantly looking at how we improve turnover. Are we competitive to others in the market? I do not think that is going away anytime soon.
Jonathan Sharp: Okay, great. Thanks for the color. Appreciate it. Pass it on.
Operator: Thank you. Your next question comes from David Radclyffe from Global Mining Research. Please go ahead.
David Radclyffe: Hi, good morning, Suresh and team. I want to start with a KCGM operating question. The Mount Charlotte and Fimiston underground volumes during the quarter did look reasonably weak to what we have seen recently. It would be good to understand the drivers there of how the volumes step up over the balance of the year to meet that targeted run rate. Then maybe, Suresh, as well, it would be interesting to get your initial thoughts on that underground opportunity, and if you are comfortable with the plans to more than double the underground mining rates in just a few years.
Simon Jessop: Yeah. Thanks, David. So look, in terms of performance for Q1, if you look at the combined, it is at that 3 million ton run rate. That is as per our plan. In fact, we actually delivered slightly more than our internal plan for Q1 at a combination of Mount Charlotte and Fimiston. So really happy with where we are positioned for mining rates at the underground. As I touched on earlier, we have been seeing the underground development ramp up.
Simon Jessop: That really is critical for lifting the stoping at Fimiston over the course of the year, which you will see, and more consistency from Mount Charlotte. So in terms of the Q1 delivery, couldn't be happier with what the team produced in Q1, and we will see that ramp up over the course of the year. As I have touched on previously, it is lumpy as you bring on new stoping areas, but more and more development is getting into more stoping opportunities. Production drilling is on track, so we are positioned well for the ramp up at KCGM.
Suresh Vadnagra: As part of my time in KCGM, we did take the opportunity to go and visit Fimiston underground operation. The team also took the time to take me through their plans and what that ramp up plan looks like. As Simon mentioned, in terms of achieving that ramp up and having had similar experience to this sort of elsewhere, it is at the moment very much about getting that development in front of you, and creating access to those stopes that will deliver those higher run rates. If we look at our development rates as an organization and compare them to development rates more generally, they compare extremely favorably, with some of our development rates significantly exceeding benchmarks in a lot of cases. In terms of my focus on delivery, which I have mentioned on a number of occasions throughout the call today, that is my immediate priority.
Suresh Vadnagra: I really want to work through all those forward plans in detail with Simon and the team and understand what needs to happen when. Are we positioned to deliver on those milestones the way we need to be? What else do we need to do to give ourselves certainty that we are going to meet all of those objectives?
David Radclyffe: Okay, thanks, Steve. If maybe I can just follow up on the CapEx end of the expansion. We are now just a few million dollars below the bottom of the forecast project spend of AUD 1.8 billion, and that budget has a pretty narrow capital range. What are the risks here that we could potentially go above that targeted spend in coming months as we complete stage 2? Then maybe on that, if there is any potential capital offsets you can see within that readiness capital budget.
Suresh Vadnagra: Okay. Steve?
Steve McClare: Well, I guess what you are seeing in the project is we are getting into the final stages of stage 2. It takes time because the work fronts actually shrink down. We are at the point today where we are into the single-digit percentage to go to complete, and that is why the numbers wind off quite rapidly. Can they go above that range? Yes, they could, if we materially got lower productivity, et cetera. Based on what we see today, we are comfortable with that guidance as we head into the year. The numbers drop off significantly. We are less than one-third the amount we had during the peak of the project and winding down rapidly.
David Radclyffe: Brilliant. Thank you. I will pass it on.
Operator: Thank you. There are no further questions at this time. I will now hand back to Suresh for any closing remarks.
Suresh Vadnagra: Well, thanks everyone for your time this morning, and thanks for the conversation and the questions. We really appreciate the continued interest in Northern Star. I think it probably came through quite clearly throughout our conversation today, I am really excited about the future of our business. There is no doubt in my mind that we have a high-quality asset base, we have high-quality people, and significant opportunities for us to deliver shareholder value in the future. Right now, I am still trying to get my head around the business and do everything that I possibly can to get up the curve as quickly as possible. Supporting our people and ensuring that we deliver on our commitments. Those are my main priorities and will remain my immediate main priorities.
Suresh Vadnagra: By maintaining strong operating discipline, capital discipline, we can build on the foundation that we have in front of us and deliver sustainable cash flow and attractive returns for our shareholders. I look forward to all of our future interactions, and updating you on the progress that we make in due course. Thank you and have a great day.
