Northern Star’s FY25 Surge: De Grey Deal Boosts Resources and Returns

Robust Financial Performance

Northern Star Resources Ltd has reported a robust financial performance for the fiscal year ended 30 June 2025, highlighted by a 30% increase in revenue to A$6.415 billion and a 60% surge in underlying EBITDA to A$3.5 billion. This growth underscores the company’s operational excellence and disciplined capital management, delivering strong cash earnings of A$2.9 billion and underpinning a final dividend of 30 cents per share.

The company’s ability to generate free cash flow of A$536 million reflects a well-executed strategy focused on sustainable profitability and shareholder returns. The completion of a A$300 million share buy-back program further demonstrates Northern Star’s commitment to returning value to shareholders.

Strategic Acquisition Enhances Resource Base

A key highlight of FY25 was the successful acquisition of De Grey Mining Ltd, completed on 5 May 2025. This strategic move significantly expanded Northern Star’s Mineral Resources and Ore Reserves, notably through the addition of the Hemi Development Project. While the FY25 resource figures exclude Hemi due to timing, the acquisition materially strengthens the company’s reserve-backed production profile and growth prospects.

The integration of De Grey’s assets is expected to provide a positive step-change in production and financial returns, complementing Northern Star’s existing operations across its three production centres – Kalgoorlie, Yandal, and Pogo.

Operational Excellence and Margin Expansion

Operationally, Northern Star achieved a notable increase in EBITDA margins, with site-level margins reaching up to 55% at Kalgoorlie and Yandal. The company’s focus on cost discipline is reflected in a modest 1% increase in gold sold to 1.63 million ounces, despite a 17% rise in all-in sustaining costs per ounce to A$2,163, partly driven by inflation and capital investments.

Return on Capital Employed (ROCE) climbed to 11.4%, more than doubling since FY23, signaling improved capital efficiency. The company’s strong balance sheet, with net cash of A$1 billion and undrawn revolving credit facilities of A$1.5 billion, supports ongoing organic growth and de-risks the cost profile.

Growth Projects and FY26 Outlook

Looking ahead, Northern Star is investing heavily in growth projects, including the KCGM Mill Expansion and the Hemi Development Project, with combined capital expenditure guidance of approximately A$1.4 billion for FY26. Exploration expenditure is forecast at around A$225 million, underpinning further organic growth opportunities.

FY26 guidance anticipates gold sales between 1.7 and 1.85 million ounces, with all-in sustaining costs expected in the range of A$2,300 to A$2,700 per ounce. The company projects a stable tax rate of 30-32% and expects dividends to remain fully franked, subject to gold price conditions.

Sustainability and Risk Management

Northern Star continues to prioritize sustainability, targeting a 35% reduction in carbon emissions by 2030 and maintaining a safety record below industry averages. The company acknowledges the inherent risks in gold mining, including price volatility and regulatory changes, but remains confident in its disciplined approach to capital allocation and operational flexibility.