Northern Star Resources (ASX:NST) detailed its first-half FY26 financial results on an earnings call led by Managing Director and CEO Stuart Tonkin and CFO Ryan Gurner, highlighting record underlying EBITDA, a net cash balance sheet, and continued investment in major growth projects—while acknowledging a softer operating performance in the second quarter.
Record EBITDA and higher earnings, despite Q2 softness
Gurner said the company delivered a record underlying EBITDA of AUD 1.9 billion for the first half of FY26, an increase of 34% versus the prior corresponding period. On an underlying basis, earnings were AUD 0.53 per share, up 19% year over year, and first-half cash earnings totaled AUD 1.1 billion.
Dividend declared as company reiterates capital returns policy
The board declared a fully franked interim dividend of AUD 0.25 per share, totaling AUD 358 million. The record date is 5 March, with payment scheduled for 26 March. Management also reiterated the company’s dividend policy of returning 20% to 30% of full-year cash earnings.
In response to an analyst question about the interim dividend representing a higher proportion of first-half cash earnings, Tonkin said the company evaluates the payout on a full-year basis and expects to remain within policy given its forecast for a stronger second half.
Balance sheet remains net cash; liquidity highlighted
Gurner said Northern Star ended the half in a net cash position of AUD 293 million as of 31 December. Total liquidity was cited at AUD 2.7 billion, including AUD 1.5 billion of undrawn facilities. He characterized the balance sheet as investment grade and positioned to provide flexibility through commodity cycles.
Asked whether management’s comments about balance sheet flexibility implied appetite for acquisitions, Tonkin said the company’s focus is on organic priorities, emphasizing that Northern Star has “plenty on our plate,” including delivering the KCGM expansion and progressing Hemi.
Operations: stabilization efforts and margin commentary
Tonkin provided a brief update on operating performance, noting that KCGM’s milling performance is stabilizing but remains disruptive until the transition to the new plant. At Jundee, he said remedy works were expected to be completed this month, with milling throughput normalizing and attention shifting to mine volumes and grades. At Pogo, he said mine grades have increased but added he wants further improvement and a focus on dilution.
On margins, Gurner said all three production centers delivered healthy EBITDA margins, with the group achieving a 55% EBITDA margin for the half. He noted Yandal was impacted by disruptions over the December quarter and higher operating costs, which reduced margins, but said the company expects an improvement in the second half. He also said Pogo is forecast to lift mining grades, supporting margin improvement over the second half.
Responding to questions on grade reconciliation at Yandal, Tonkin said earlier open pit material was reconciling well and described remaining feed and grade ranges across contributing sources, adding that new mines and plant capability at Jundee are expected to help lift grades over time.
Growth projects: KCGM expansion on track; Hemi timeline extends
Management repeatedly emphasized the strategic importance of the KCGM mill expansion, which remains on track for commissioning in early FY27. Tonkin said the project is nearing completion after a three-year build and is expected to drive a “step change” in returns and cash flow at KCGM from FY27.
Tonkin reiterated that the company increased the project’s total capital investment range to AUD 1.65 billion to AUD 1.69 billion, citing a lower-than-planned rate of productivity and the addition of labor to keep the schedule intact. He said the build was 86% complete and that additional labor was delivering benefits, with labor levels expected to reduce as commissioning approaches.
On FY27 production assumptions at KCGM post-expansion, Tonkin explained that the mine plan prioritizes higher-grade feed first, with lower-grade stockpiles effectively serving as a buffer if throughput falls short due to commissioning timing or downtime. He also said mining performance had been strong, citing record material movement and indicating that mill disruptions—rather than mining—had been the main constraint.
For the Hemi development project, Tonkin said state and federal permitting is progressing but remains subject to regulatory timelines, including public comment periods and follow-up information requests. He said the company now expects Final Investment Decision sometime during FY27, with an estimated 2.5-year build and first gold forecast for FY30 at the earliest. He added the timing supports an orderly transition of the internal project team following completion of the KCGM expansion and allows the balance sheet to strengthen as KCGM cash flow increases.
Tonkin also addressed questions about how Hemi’s resource and reserve estimates could evolve, indicating the company expects a mix of updates including adjustments to gold price assumptions, stricter views on mining shapes and design parameters, and ongoing infill drilling aimed at improving classification confidence. He said the company expects to include Hemi mineral resources and ore reserves in its group annual statement in May.
In closing remarks, management reaffirmed its focus on operational discipline, medium-term production growth, and unit cost reduction initiatives, while continuing to review the portfolio toward longer-life, lower-cost assets. Tonkin also noted the company had sold its interest in the Central Tanami joint venture for AUD 50 million after the half-year period, characterizing it as consistent with ongoing portfolio simplification efforts.
About Northern Star Resources (ASX:NST)
Northern Star Resources Limited engages in the exploration, development, mining, and processing of gold deposits. It also sells refined gold. It operates in Western Australia, the Northern Territory, and Alaska. The company was incorporated in 2000 and is headquartered in Subiaco, Australia.
