Northern Star Reports 24% Profit Rise as KCGM Expansion Starts Commissioning

Record Profit and Dividend Declaration

Northern Star Resources (ASX:NST) has reported a robust set of financial results for the year ended 30 June 2026, with net profit after tax surging 24% to A$1.66 billion. The company declared a fully franked final dividend of 30 cents per share, payable on 15 October 2026, bringing the total dividend for the year to 55 cents per share, consistent with the upper end of its dividend policy.

Revenue climbed 19% to A$7.62 billion, buoyed by a 26% increase in the average realised gold price to A$4,925 per ounce, though gold sales dipped 6% to 1.54 million ounces, reflecting operational challenges including plant breakdowns and a pit wall failure. Despite these setbacks, the all-in sustaining cost (AISC) held within original guidance at A$2,698 per ounce, underscoring disciplined cost management amid inflationary pressures.

KCGM Mill Expansion Enters Commissioning Phase

A major strategic milestone was reached with Stage I of the Kalgoorlie Consolidated Gold Mines (KCGM) Mill Expansion Project entering commissioning on schedule in July 2026. This stage replaces 85% of the aging 13Mtpa Fimiston Processing Plant, effectively doubling processing capacity to 27Mtpa. The ramp-up is expected to be measured, initially utilising lower-grade feedstocks to establish operating parameters.

Stage II remains on track for completion in late first half FY27, which will consolidate processing into a single hub, eliminate concentrate haulage, and is forecast to deliver a 1-2% recovery uplift. The expanded mill is pivotal to Northern Star’s long-term growth strategy, aiming to structurally reset the cost base and unlock decades of value at KCGM.

FY27 Outlook and Growth Capital Investment

Looking ahead, Northern Star forecasts group gold production of 1.5 to 1.65 million ounces at an AISC of A$3,050 to A$3,450 per ounce, with production weighted to the second half of FY27 due to planned shutdowns and commissioning activities. KCGM is expected to contribute 550-650koz during its ramp-up phase.

Capital investment is projected between A$2.55 billion and A$2.94 billion, including growth capital of A$1.7 billion to A$2.02 billion and sustaining capital of A$850 million to A$915 million. Growth capital is heavily weighted towards KCGM operational growth, mill expansion readiness, and the Hemi Project, which is progressing towards a Final Investment Decision targeted for late FY27.

Leadership Transition and Corporate Developments

In a significant leadership change, Managing Director and CEO Stuart Tonkin announced his retirement, effective Q1 FY27, after 13 years at the helm. Stuart oversaw Northern Star’s transformation into a top 20 ASX gold producer with a share price rise from under $1 to $23. His successor, Suresh Vadnagra, a seasoned global mining executive, will commence on 5 October 2026. Interim CEO duties will be handled by CFO Ryan Gurner during the transition.

The Board also appointed two new independent Non-Executive Directors, Jeff Quartermaine and Terry Bowen, enhancing governance with deep mining and financial expertise.

Resource Base and Exploration Success

Northern Star’s Mineral Resources increased 26% to 88.9 million ounces and Ore Reserves rose 27% to 28.4 million ounces as at 31 March 2026, including the first-time inclusion of the Hemi Project post-acquisition. Exploration remains a core pillar, with a discovery cost of less than A$23 per ounce, focused on extending mine life and underpinning future production growth.

Sustainability and Safety

The company continues to deliver sector-leading safety outcomes, with a Serious Lost Time Injury Frequency Rate (SLTIFR) of 0.5, four times lower than the industry average, and zero fatalities reported in FY26. Northern Star is advancing its Net Zero ambition with a 25% reduction target for Scope 1 and 2 emissions by 2030, supported by renewable energy projects and a new thermal power station under construction at KCGM.

Shareholder Returns and Capital Management

Northern Star maintained strong cash generation, with Cash Earnings reaching a record A$2.9 billion. The company commenced a A$500 million on-market share buy-back program in April 2026, completing A$129 million of purchases to date. Dividends and buy-backs reflect a disciplined capital allocation strategy aligned to delivering superior shareholder returns.

Post year-end, the company declared a fully franked final dividend of 30 cents per share, payable on 15 October 2026 to shareholders registered on 10 September 2026, with a Dividend Reinvestment Plan available.

What to Watch Next

The ramp-up of the KCGM Mill Expansion will be critical to Northern Star’s near-term operational and financial performance, with the potential to unlock significant cost savings and production growth. The progression of the Hemi Project towards its Final Investment Decision later in FY27 will also be a key catalyst. Meanwhile, the leadership transition to Suresh Vadnagra marks a new chapter for the company’s strategic direction and execution.

Investors will be keen to see how effectively the company navigates commissioning risks and inflationary pressures while maintaining its strong safety and sustainability credentials.