KCGM won’t reach output of 650,000oz in FY26 but Northern Star still expecting surge to 900,000ozpa by FY29

The Super Pit and associated assets of Kalgoorlie Consolidated Gold Mines won’t reach output of 650,000 ounces this financial year, but Northern Star Resources remains confident of a ramp-up to 900,000ozpa by FY29 following the completion of the $1.5 billion mill expansion. Northern Star managing director and chief executive Stuart Tonkin on Thursday said the past year had been challenging for the company as it dealt with “productivity and cost headwinds”, particularly at KCGM, the company’s largest asset. “This led us to confirm that we will not reach our ambitious two million ounce per annum group target in FY26, primarily because KCGM is not yet able to deliver the 650,000oz a year run rate,” he said. “But let me emphasise — with a mine life exceeding 20 years, KCGM remains a cornerstone of our medium and long-term value proposition. “This is why we continue to invest in the potential of this asset which, in turn, will drive a positive step-change in free cash flow generation for the company for many years to come.” This time last year Mr Tonkin said the company had locked in a “mine sequence” that would lift KCGM from 450,000ozpa to 650,000ozpa in FY26. He said this was just a “checkpoint” on the path to 900,000oz in FY29 as the five-year Fimiston mill expansion project kicked in to deliver throughput of 27 million tonnes per annum, up from the current 13Mtpa. The FY26 target for KCGM was now 550,000oz-600,000oz, with the company still expecting to operate at a steady state of 900,000ozpa from FY29, following a two-year ramp-up upon completion of the mill expansion. Northern Star will spend $530 million-$550m this financial year on the mill expansion, with the project in the final year of the build phase to enable first production in early FY27. The project advanced to structural and mechanical installation during the June quarter, with 90 per cent of concreting in the critical path areas of milling, gravity separation and trash screening completed. Also, steel erection substantially progressed to enable major equipment installations, including SAG and ball mills. During the next two quarters, in parallel to the completion of the major equipment installation, the project will transition to electrical and piping installation. The company will also spend $500m-$550m this financial year on operational developments such as open pit material movement at the Fimiston South cutback and underground development activities at Fimiston underground and Mt Charlotte to enable future high-grade ore feed for the plant. Northern Star reiterated it would spend $315m-$370m in FY26 on KCGM “operational readiness” projects including tailings dam facilities ($180m-$220m), a thermal power plant and transmission infrastructure ($85m), and an accommodation camp ($30m-$35m).