Northern Star sets aggressive growth targets, aims for 20% ROCE

Northern Star Resources is targeting a 20% return on capital employed (ROCE) in the medium term, driven by the KCGM expansion, Pogo optimisation, and organic growth projects. The company projects an underlying earnings per share of 119c and underlying free cash flow per share of 45c by FY25. Net cash stands at A$1.0 bn, and liquidity at A$3.4 bn, with a commitment to maintaining a leverage ratio below 1.5x and gearing below 20%.

KCGM, a key growth engine, is projected to reach a production pathway of ~900koz by FY27, with A$530-550m allocated for the mill expansion project in FY26. Exploration has been successful, with mineral resources at 70.7 Moz and ore reserves at 22.3 Moz, representing a 10-year reserve-backed production profile at a cost of A$37/oz. Northern Star is also increasing its spot gold price exposure, targeting 100% by FY29.

The Hemi development project is undergoing approvals, with throughput expected to reach 10Mtpa by year 4-6 post-commissioning. For FY26, company guidance includes gold sold of 1,700-1,850 koz at an AISC of A$2,300-2,700/oz. Total growth capital expenditure for FY26 is A$1,140-1,200m, including A$530-550m for the KCGM mill expansion and A$140-150m for Hemi development.