Northern Star Resources boss Stuart Tonkin says there's decades of mine life left in the famed Golden Mile, as it further develops its underground assets.
Northern Star Resources boss Stuart Tonkin says there's more to come out of the ground than has already been mined from the Golden Mile, as it pours resources into accelerating its underground developments.
A room packed with investors, fund managers, analysts and journalists were told of Northern Star's latest discovery, named Hercules, located just south of its Mt Charlotte and Fimiston areas, the latter known as the Super Pit in Kalgoorlie.
The early-stage discovery still needs to be defined, but Northern Star said the asset was poised to become a mine as soon as capital could be positioned.
Northern Star’s other exploration play is its Red Hill asset, north of Kalgoorlie Consolidated Gold Mines (KCGM) plant, which is a historic open pit with a 1.9-million-ounce mineral resource.
The miner is ramping up development of its underground mining areas, Mt Charlotte and Fimiston underground, with the latter essentially consisting of three mines within one, alongside developing its Croesus early-stage asset.
Above ground, Northern Star is 94 per cent of the way through the costly remediation works of its East Wall cutback, after the huge slip in 2018.
Its mined 30Mtpa since then, with the remaining 2mtpa to be moved in Q1 of FY25 before it can reach “the honey at the bottom of the pot”, according to Mr Tonkin.
But the last leg of the work isn’t without its challenges, with some sizeable rocks needing to be blasted and moved before that 1.5moz of gold can be accessed.
Remediation works on the East Wall. Photo: Isabel Vieira
Northern Star is also expected to gain full access to its Golden Pike North mining area, one of its three key locations, where it used remote loaders in geotechnical areas and blasts impacted by old underground workings. Full access is tipped for Q2 FY25.
And the miner has moved into the second year of construction on its $1.5 billion mill expansion to take its capacity from 13Mtpa to 27Mtpa.
It expects to operate at 900,000oz per annum of gold from FY29, following a two year ramp up after the mill expansion is complete.
In the past financial year, the Super Pit miner spent $348 million, or 23 per cent of the capital cost. About 81 per cent of the total project budget has been committed.
So far, early works have been completed and initial construction infrastructure is in place, with the additional workforce onsite.
The exisiting plant at KCGM. Photo: Isabel Vieira
KCGM's current annual production is 500,000 ounces of gold from 13Mt of ore at an average grade of 1.3g/t. Out of that, 60 per cent of the ore derived from the Fimiston open pit, 10 per cent from Mt Charlotte underground and 30 per cent from stockpiles.
Northern Star’s 3.1Moz ore reserve stockpile has been dubbed the “insurance policy” behind the $1.5 billion mill expansion investment, now in its second year.
According to the miner, there's $6 billion worth of margin in the ore stockpile at current gold prices, around the $3,700 per ounce range.
Mr Tonkin and his team of geologists spruiked the same sentiment at the Sunday site visit, being that there’s still decades of life left in the Golden Mile deposit.
So much so that he said he believes there’s more to come out of the ground than what’s already been mined to date.
For context, the mammoth operation, which supports an 890-strong workforce onsite, has been in near-continuous production since 1893.
“We've got decades in front of us of pit activity and in parallel to that, we will build large scale and multiple undergrounds along this golden mile,” Mr Tonkin said.
"My attitude is that if the geology continues, if you get the costs right, if the minerals are there, if we get the maths and the costs right, then there's a lot of life to come out of it…I'm talking decades, and it has a century of history.
“There's almost more gold in the ground than has come out already. So, I'm really confident in the outlook of KCGM.”
Mr Tonkin ruled out picking up additional ounces by potentially aquiring nearby junior miners, instead reiterating his focus on the company's existing portfolio.
Mr Tonkin said he was starting to see some costs stabilise and labour pressures ease as certain commodity prices come off, like nickel and lithium.
He said in the wake of BHP mothballing its Nickel West operations from October, Northern Star had been in conversations about snapping up some of those workers.
BHP moved to suspend its Nickel West operations until at least 2027, impacting 3,000 staff at the miner’s Goldfields operations and Kwinana Nickel Refinery.
“Nickel West has been very proactive in engaging other businesses in the Goldfields and those forums have been held here,” Mr Tonkin said.
“I think that's very important to keep those skills here in the Goldfields, they've got families in Kalgoorlie, they've got kids in school, it's really key that we can try and pin some of the Nickel West employees here.
“But vice versa, we've also reached out to other companies on the journey and offered their support and we've always promoted gold as a great place to be.”
The fallout from BHP’s decision spread widely, with one factor being the sulphuric acid production bought by the likes of Lynas Rare Earths.
Mr Tonkin said he understood there was a need in town now that the supply tap had been turned off.
He said they had the capacity or ability to consider generating some sulphuric acid.
“It's about being a good neighbour, we're here and if there's something we can do to help other businesses locally, we will absolutely consider that and evaluate it,” he said speaking at the Super Pit.
“But we cannot generate the volumes that's coming off that local supply but we certainly could contribute to the solution.”
Northern Star is further developing its KCGM underground assets. Photo: Isabel Vieira.
Last month it emerged Mr Tonkin had taken an equity stake in in Palace Securities, which runs the high-profile Diggers and Dealers conference now in its 33rd year.
He was among a suite of new equity owners, which broadens out the previously tight ownership model.
Speaking on the move, Mr Tonkin said it was a “personal investment” that was not associated to the company in which he helms.
“I think the new investors show the confidence that it's [Diggers and Dealers] here to stay and the commitment from the local council to build a permanent budget for a permanent infrastructure there means that they're got a long outlook," he said.
“It's great for the Goldfields and it's great for the community, and I think we should enhance it. It’s been modernized, as it does, but I think it's really key to a great event annually, and it will continue to be so.”
Business News was a guest of Northern Star at the Super Pit.
