Inflation winds whip up extra costs for Northern Star Resources

Inflationary pressures across Northern Star Resources’ assets in WA and Alaska will add about $100 an ounce to the precious metal miner’s cost of production.

Higher royalty costs and tariff assumptions associated with its Pogo operations will contribute about $40/oz to the increase as Northern Star targets production of between 1.7 million ounces and 1.85moz for the financial year.

The 5 per cent jump is set to take the Stuart Tonkin-led company’s all-in cost for FY26 to between $2300/oz and $2700/oz, with expectation of improving costs throughout the year.

Adding to the cost will be sustaining capital of about $750m across its production centres.

Reporting its latest quarterly results on Thursday, Northern Star said it delivered record annual group underlying free cash flow of $536 million for the 12 months to the end of June, with net mine cash flow of $1.19 billion.

The Yandal and Pogo operations both recorded quarterly and annual net mine cash flow.

Gold sold for the year came in within the group’s revised guidance at 1.634moz at all-in costs of $2163/oz.

Average realised prices for the June quarter were $4483/oz, generating revenue of $1.99b

“The June quarter completes a constructive year of growth investments to position our largest asset, KCGM, for sustained future success,” Mr Tonkin said.

“We remain committed to unlocking the full potential of our production centres and are confident the investments made during FY25, including the acquisition of the Hemi deposit, will deliver significant value for shareholders.”

The $1.3b Hemi project in the Pilbara was picked up in Northern Star’s massive $5b takeover of De Grey Mining at the end of 2024.

The price is believed to be a global record for a gold company without a mine in production, and comes during a period of consistent high prices for the metal.

Gold has climbed about a third this year, as uncertainty around US President Donald Trump’s aggressive attempts to reshape global trade and conflicts in Ukraine and the Middle East sparked flight to havens.

The precious metal has consolidated within a tight range over the past few months, though this week’s gains of about 2.5 per cent have pushed prices to trade about $US80 short of April’s record high above $US3500/oz.

It is currently trading at around $US3422/oz.

Earlier this month Northern Star secured approval for Hemi from the Environmental Protection Authority, subject to conditions regarding its water usage, flora and fauna disturbances, cultural heritage impacts and rehabilitation progress.

Once up and running — and coupled with increased output from an $1.5b expanded mill at its famed Super Pit in Kalgoorlie — Northern Star is poised to become a global top 10 producer by the end of the decade.

It ended the year with cash and bullion of $1.9b.