Northern Star Shines with Record Dividend and 63% Earnings Surge

• Record interim dividend of 25.0 cents per share, up 67% year-on-year
• Cash earnings surged 63% to A$1.146 billion in 1H FY25
• Gold sales increased to 804,140 ounces at an AISC of A$2,105/oz
• Strong balance sheet with net cash position of A$265 million
• On track to meet FY25 production and cost guidance with key growth projects progressing

Northern Star’s Financial Leap

Northern Star Resources Limited (ASX: NST) has delivered a standout financial performance for the half year ended 31 December 2024, posting record cash earnings of A$1.146 billion, a 63% increase compared to the prior corresponding period. This surge was driven by higher gold sales volumes and elevated realised gold prices, which averaged A$3,562 per ounce, up from A$2,873 in the previous year.

The company sold 804,140 ounces of gold during the period at an all-in sustaining cost (AISC) of A$2,105 per ounce, reflecting operational efficiency despite rising mining and processing costs. Underlying EBITDA rose 58% to A$1.402 billion, underscoring the strength of Northern Star’s profitable growth strategy initiated in FY22.

Shareholder Returns and Capital Management

Demonstrating a firm commitment to shareholder value, Northern Star declared a record interim dividend of 25.0 cents per share, marking a 67% increase year-on-year. This dividend represents 25% of cash earnings, aligning with the company’s 20-30% payout policy. Complementing this, the company has progressed 86% of its A$300 million on-market share buy-back program, having repurchased A$257 million worth of shares.

With a robust balance sheet, Northern Star reported net cash of A$265 million, supported by cash and bullion holdings of A$1.215 billion and zero corporate bank debt. This financial strength provides a solid foundation for ongoing investments and shareholder distributions.

Growth Projects and Operational Outlook

Looking ahead, Northern Star remains on track to meet its FY25 production guidance of 1.65 to 1.80 million ounces of gold, with an AISC forecast between A$1,850 and A$2,100 per ounce. Capital expenditure is expected to total A$500-530 million, including significant investment in the KCGM Mill Expansion Project, which remains on schedule and within budget.

Operational highlights include the completion of the East Wall remediation at Kalgoorlie’s KCGM site, unlocking access to high-grade ore zones, and consistent mill performance at Yandal’s Thunderbox operation. The Pogo mill in Alaska has also ramped up to a 1.5 million tonnes per annum run rate, supporting future production growth.

Strategic Positioning and Market Implications

CEO Stuart Tonkin emphasised the company’s focus on embedding value creation through operational excellence and disciplined capital management. Northern Star’s ongoing exploration efforts and its recommended offer to acquire De Grey Mining signal an aggressive growth posture in a competitive gold market.

While the company navigates higher costs and market volatility, its strong cash flow generation and strategic investments position it well to sustain superior shareholder returns. Investors will be watching closely how Northern Star balances growth ambitions with maintaining its disciplined financial framework.

Bottom Line?

Northern Star’s record earnings and dividend set a high bar as it advances key growth projects, but sustaining momentum amid cost pressures will be critical.

Questions in the middle?

• How will Northern Star’s acquisition of De Grey Mining reshape its growth trajectory?
• What impact will rising mining and processing costs have on future margins?
• Can the KCGM Mill Expansion deliver production gains on time and within budget?