Northern Star on track amid Kalgoorlie power outages

Recent power outages in Kalgoorlie have failed to deter Northern Star Resources from remaining on course to achieve its production guidance for the 2024 financial year, according to managing director Stuart Tonkin.

During the company's December 2023 quarterly conference call on Wednesday, Mr Tonkin said the ability to utilise the company's 110-megawatt Parkeston power station - which it acquired from Newmont Australia in 2021 - had resulted in minimal distruptions for its Kalgoorlie operations, including at the iconic Super Pit. 

"We believe it's going to fixed imminently on a permanant basis in the next few days," Mr Tonkin said.

"There was obviously a lot of drama up there, with power out for 30,000 residents, along with businesses. We're fortunate that we have the Parkeston power station, which can service the city and our mines.

"There's certainly been disruptions across the Goldfields, but it hasn't materially affected us. We've worked hard to support the community, providing backup generator sets, power and redistribution of our backup power. We work under instruction from the energy companies in terms of using Parkeston to feed and supplement power into the city."

Northern Star bought the power station from Newmont for $US95million ($131 million) in November 2021. Two years earlier, when it purchased a 50 per cent stake in Kalgoorlie Consolidated Gold Mines for $1.16 billion, Subiaco-based Northern Star put up a $US25 million option ($34.6 million), towards the eventual accquisition of Parkeston. The purchase was completed in December 2021, upon Northern Star paying the outstanding $US70 million ($96 million) funds for the transaction.

The Super Pit miner's total gold sales reached 411,613 ounces during the December 2023 quarter, at an all in sustaining cost of $1,824/oz, up 42,411oz, and an AISC of $1,939/oz from the September 2023 quarter. 

It tipped it would meet its FY24 production guidance of 1,600 million to 1,750 million ounces of gold sold at an AISC of $1,730-1,790/oz. The company said gold sold in the second half of FY24 would be weighted, due to higher grade and ore volumes forecasted at its KCGM operation. 

Northern Star's capital expenditure in FY24 is also expected to reach between $1.1 billion and 1.2 billion, which includes $525 million set aside for the KCGM mill expansion project. 

Northern Star last traded at $12.80 per share, up 6 per cent, as of 3.15pm AEST.