Northern Star Resources has kicked off commissioning of its KCGM Mill Expansion Project while delivering solid June quarter results, including record mining volumes and positive cash flow across all production centres.
- KCGM Mill Expansion Stage 1 commissioning underway, on schedule
- FY26 gold sales of 1,543koz within original cost guidance
- Record mining volumes at KCGM with open pit and underground milestones
- Group free cash flow of A$206 million and net mine cash of A$443 million in June quarter
- New CEO Suresh Vadnagra to start in October 2026
KCGM Mill Expansion Project Enters Commissioning Phase
Northern Star Resources Ltd (ASX:NST) has marked a major milestone with the commencement of commissioning for Stage 1 of its KCGM Mill Expansion Project at Kalgoorlie. This stage aims to boost processing capacity from 13Mtpa to 27Mtpa, with commissioning progressing on schedule and a measured ramp-up planned using lower-grade feed during the first half of FY27.
The existing Fimiston Processing Plant will continue operations through July and August, with a tie-in to the expanded facility targeted for September. Stage 2, which will consolidate processing into a single hub by integrating the Gidji facility, remains on track for completion in late 1H FY27 and is expected to improve recovery rates by 1-2% while eliminating concentrate haulage between sites.
Northern Star’s Chief Technical Officer Steve McClare highlighted the significance of this achievement, stating that the focus now shifts to a safe and disciplined ramp-up to optimise plant performance and maximise the long-term value of this multi-decade asset.
Operational Strength Across All Production Centres
The June quarter saw Northern Star sell 433,482 ounces of gold at an all-in sustaining cost (AISC) of A$2,651 per ounce, within the company’s original guidance range. The Kalgoorlie production centre, which includes KCGM, delivered 228koz at an AISC of A$2,589/oz, with mining volumes hitting record annualised rates of 88Mtpa for open pit and 3.2Mtpa for underground operations under Northern Star ownership.
Yandal’s Jundee and Thunderbox mines posted improved milling and grade performance, with Thunderbox achieving record quarterly gold sales driven by higher grades and increased contributions from open pit ore. Pogo continued its strong run, recording a fifth consecutive annual record net mine cash flow of A$609 million, supported by higher-grade ore and increased stoping volumes.
The group generated underlying free cash flow of A$206 million and net mine cash flow of A$443 million for the quarter, underscoring the quality and resilience of its portfolio. Cash and bullion holdings stood at A$1.235 billion after A$129 million was spent on the company’s A$500 million on-market share buy-back program.
Leadership Transition and Project Pipeline
Northern Star announced that Suresh Vadnagra will take over as Managing Director and CEO on 5 October 2026, succeeding Stuart Tonkin who is stepping down after 13 years. Vadnagra brings over 25 years of global mining experience across strategy, operations, and major projects, positioning the company for its next phase of growth.
The Hemi Project is progressing as planned, with Managed Aquifer Recharge trials set to commence in the September quarter following agreements with Traditional Owners. These trials will support environmental approvals and engineering design, with a final investment decision targeted for late FY27.
FY27 Guidance Pending KCGM Ramp-Up Data
Northern Star plans to release FY27 Group guidance alongside its FY26 financial results on 20 August 2026. Given the recent start of commissioning at KCGM, the company is taking a cautious approach, awaiting early operating data to better assess throughput, recovery, and plant availability before finalising guidance. This measured approach reflects the inherent uncertainties in ramping up a major processing expansion.
Meanwhile, planned major shutdowns across all three production centres are scheduled for the September quarter, focusing on maintenance and infrastructure improvements to support ongoing operational efficiency.
Bottom Line?
As Northern Star embarks on commissioning its largest processing expansion, the next few quarters will be critical to translating capacity gains into sustained production growth and cash flow, with FY27 guidance hinging on early ramp-up performance.
Questions in the middle?
- How will the initial commissioning phase at KCGM impact production and cost metrics in FY27?
- What operational challenges might arise during the integration of the Gidji facility into the expanded Fimiston plant?
- How will the leadership transition influence Northern Star’s strategic priorities amid major project developments?