Northern Star Raises FY26 Cost Guidance Amid Production Setbacks
Northern Star Resources has revised its FY26 all-in sustaining cost guidance upward following a downgrade in production forecasts and rising royalties, signaling tighter margins ahead.
- FY26 AISC guidance increased to A$2,600-2,800/oz from A$2,300-2,700/oz
- Production guidance lowered to 1,600-1,700koz from 1,700-1,850koz
- Higher royalties driven by elevated gold prices add approximately A$40/oz
- Sustaining capital expenditure guidance remains steady at ~A$750 million
- December quarterly results due 22 January will provide further clarity
Northern Star Revises Cost and Production Outlook
Northern Star Resources Ltd (ASX, NST) has updated its FY26 all-in sustaining cost (AISC) guidance, reflecting operational challenges and cost pressures that have emerged since its initial forecast. The company now expects AISC to range between A$2,600 and A$2,800 per ounce, up from the previous guidance of A$2,300 to A$2,700 per ounce.
This upward revision follows a downward adjustment in the group’s production guidance, which was lowered to 1,600-1,700 thousand ounces from an earlier estimate of 1,700-1,850 thousand ounces. The reduction in gold sales across Northern Star’s three production centres during the December quarter has been the primary driver behind this change.
Impact of Elevated Gold Prices and Royalties
In addition to lower production volumes, Northern Star cited higher royalties as a significant factor pushing costs higher. Elevated gold prices have increased royalty expenses by approximately A$40 per ounce compared to initial forecasts. Despite these cost pressures, the company has maintained its sustaining capital expenditure guidance at around A$750 million, which translates to roughly A$450 per ounce, slightly above the previous A$420 per ounce estimate.
The company’s Managing Director and CEO, Stuart Tonkin, authorised the release of this update ahead of the December quarterly results scheduled for 22 January 2026. These upcoming results will provide investors with more detailed insights into the operational performance and cost dynamics that have influenced the revised guidance.
Looking Ahead
While the revised guidance signals tighter margins for Northern Star in FY26, the company’s ability to manage sustaining capital and navigate royalty costs will be critical. Market watchers will be keen to see how the December quarter results align with these updated forecasts and what strategies Northern Star might deploy to mitigate cost pressures moving forward.
Bottom Line?
Northern Star’s cost pressures underscore the challenges of sustaining profitability amid fluctuating production and rising royalties.
Questions in the middle?
- How will December quarter results influence Northern Star’s full-year profitability?
- What strategies will Northern Star implement to manage higher royalties and cost per ounce?
- Could further production setbacks lead to additional revisions in FY26 guidance?
