Northern Star Resources Aktie

Thank you for standing by, and welcome to the Northern Star March 2026 Quarterly Results. [Operator Instructions]

I would now like to hand the conference over to Mr. Stuart Tonkin, Managing Director and CEO. Please go ahead.

Good morning, and thank you for joining us today. With me on the call is Chief Financial Officer, Ryan Gurner; and Chief Operating Officer, Simon Jessop.

As previously announced, in the March quarter, gold sold totaled 381,000 ounces. And today, we announced the delivery of those ounces at an all-in sustaining cost of AUD 2,709 per ounce. This improved operational performance exiting the quarter has delivered high-margin ounces to generate group underlying free cash flow of $301 million. More specifically, we are prioritizing cash flow at KCGM by accelerating volumes from the high-grade Golden Pike zone during current mill constraints. At Jundee, the operational review is underway, and across Thunderbox and Pogo, we've seen gold grades improve. With this improved performance and high-grade ROM stockpiles at KCGM, the company is forecast to deliver its revised FY '26 production guidance of above 1.5 million ounces.

As previously disclosed, this outlook remains particularly dependent on mill throughput at KCGM with both downside and upside potential. Total growth capital expenditure for FY '26 remains unchanged with revisions to the KCGM mill expansion project and operational readiness CapEx. The KCGM mill expansion project remains on track for commissioning in early FY '27. And pleasingly, the project started transitioning from construction to the completions and commissioning during the March quarter, which is marking the next stage of project delivery.

Due to ongoing poor productivity levels for construction activity, we prioritize the importance to keep the project on track, and therefore, forecast capital spend increased to $680 million to $700 million in FY '26 and $160 million in FY '27. The increased capital expenditure during FY '26 for the mill expansion has been offset by a reduction in the forecast spend for operational readiness related to delay in the spend of the thermal power plant and transmission infrastructure. You will see in the quarterly report, we've also introduced some extra detail regarding Stage 1 and Stage 2 for on-site construction. Stage 1 refers to the construction of the 27 million tonne per annum plant. Stage 2 refers to the consolidation of the Gidji facility, which simplifies the processing footprint to a single location in Fimiston, which supports longer-term operating efficiency and cost structure benefits.

At Hemi, our team continues to optimize the engineering and design of the project while advancing approvals. So our balance sheet remains in a net cash position, and our hedge book -- as our hedge book decreases, our growing exposure to spot gold price, coupled with increasing production, positions us for a strong increase in cash flows going forward.

I'd now like to hand over to Simon Jessop, our Chief Operating Officer, to discuss our operational highlights.

Thank you, Stu, and good morning. This quarter, we delivered a solid operational financial performance with improving production, stronger cost control and continued investment in the long-term growth across our portfolio. At the Kalgoorlie production center, we sold 210,000 ounces of gold at an all-in sustaining cost of $2,550 an ounce, improving on the December quarter. This was driven by stronger cost efficiency at KCGM and a return to normalized performance at the Kalgoorlie operations.

Mine operating cash flow was $588 million, generating a net mine cash flow of $156 million after $432 million of growth capital, reflecting both asset strength and continued investment. KCGM sold 117,000 ounces at an all-in sustaining cost of $2,485 an ounce, supported by higher grades and optimizing the available mill feed. Importantly, mining volumes continue to trend towards our annual targets. Open pit material movement is tracking towards 90 million tonnes and underground production towards 3 million tonnes per annum. Ongoing waste stripping is supporting this progress. At the same time, productivity gains are allowing us to accelerate mining in the high-grade zones, prioritizing margin and cash flow, particularly while the mill throughput remains constrained.

At Carosue Dam, open pit mining is expected to conclude in the June quarter with production transitioning to underground sources and stockpiles. At the Kalgoorlie operations, performance improved with higher grades and the normalization of underground mining following the earlier H1 disruptions.

Turning to our Yandal production center. Performance also strengthened. Gold sales increased to 105,000 ounces at an all-in sustaining cost of $3,347 an ounce with a mine operating cash flow of $177 million and net mine cash flow of $91 million after growth capital. At Jundee, an operational review is underway to reduce costs and improve consistency. During the quarter, we returned to conventional ore processing following the remediation works while a completed power upgrade is expected to support improved mining volumes and grades in the June quarter. At Thunderbox, production was particularly strong, with gold sales plus 26% quarter-on-quarter to 59,000 ounces driven by higher grade ore, initial open pit contributions and improved mill recovery.

Turning to Pogo, we saw a step change in performance. Gold sales increased to 66,000 ounces at an all-in sustaining cost of USD 1,529 an ounce, driven by higher grades from optimized stoping in the mining areas. This translated into a mine operating cash flow of USD 136 million and a net mine cash flow of USD 124 million, highlighting the strength of this asset as a cash generator. Operations continue to perform strongly with the mine and mill running at an annualized rate of 1.4 million tonnes per annum.

Development activity remains robust, establishing new mining fronts and advancing infrastructure to unlock future production, including access to the Star ore body, supporting both growth and potential mine life extension.

In summary, the March quarter reflects a business delivering improved operational performance, disciplined cost management and positioning itself for stronger, more sustainable returns.

I would now like to pass over to Ryan, our Chief Financial Officer, to discuss the financials.

Thanks, Simon. Good morning, everyone. Northern Star remains in a great financial position. Our balance sheet remains strong with cash and bullion of $1.2 billion at 31 March. Pleasingly, all 3 production centers generated positive free cash flow in the quarter with capital expenditure and exploration fully funded. Quarterly net mine cash flow was $426 million. Figure 8 on Page 10 sets out the company's cash and bullion movements for the quarter with key elements being the company generating just over $1 billion of post-tax operating cash flows, a 180% increase on the prior quarter. After deducting capital of $618 million relating to the KCGM expansion, plant and equipment and mine development, $48 million of exploration and $66 million of lease payments, quarterly free cash generation was $301 million.

Also during the quarter, the company received $50 million in proceeds from the divestment of the Central Tanami Gold project and paid an interim dividend of $0.25 per share, totaling $347 million. Stuart has already discussed the revisions to FY '26 growth capital expenditure forecast, particularly KCGM. But in respect of the other investment activities, our exploration expenditure is tracking to plan, with guidance of $225 million for the full year unchanged. And at Hemi, we continue to work closely with key stakeholders and regulators to advance the project including approvals and progress on the engineering and design works and procurement of long lead items.

On other financial matters, the Board has recently approved an on-market share buyback program of up to $500 million, supported by the company's strong outlook and value opportunity. The buyback will be subject to the company's security trading policy, including blackout periods, and will not affect the company's dividend policy to pay out 20% to 30% of cash earnings. From a cash tax perspective, we are guiding the second half of FY '26 range to be $240 million to $280 million, with $37 million already paid in Q3. No changes to our estimate quantum or timing for landholder duty for the De Grey and Saracen transactions, both likely to be paid during FY '27. The company is not experiencing any supply restrictions on fuel, and we continue to engage with our suppliers on this matter frequently.

Q4 all-in sustaining costs are expected to be $75 to $85 per ounce higher as a result of increased oil prices. Year-to-date depreciation and amortization of $1,015 per ounce sold is just above the top end of the guided range of $875 to $975 per ounce and is expected to track modestly above the top end of the guided range for the full year. For the quarter, noncash inventory charges for the group are a credit of $46 million, primarily from increases in stockpiles at KCGM. During the quarter, the company refinanced and upsized its corporate bank facilities with maturity dates of March 2030 and March 2031 across 2 equal tranches totaling $1.75 billion. These facilities remain undrawn and available at quarter end.

Also a reminder that the company will pay interest on its senior guaranteed notes in Q4, which will amount to USD 18 million. The company continues to unwind its hedging commitments with 165,000 ounces delivered during the quarter. At 31 March, commitments totaled 950,000 ounces at an average price of just over AUD 3,350 per ounce.

I will now hand back to Ashley to begin the Q&A.

[Operator Instructions] Your first question today comes from Hugo Nicolaci with Goldman Sachs. We will move on. Your next question comes from Levi Spry with UBS.

Maybe just a little bit more detail on the 2 key growth projects, KCGM and Hemi. So can you just talk us through the delay in capital into next year, how that ties in with the potential ramp up through, I guess, second half of this calendar year?

Yes. Thanks, Levi. So there's -- on the actual expansion project, there's an increase in the overall capital and it's pretty much spread this financial year, next financial year. So you'll see those lifts in FY '26, FY '27 in regard to the expansion, about $60 million, $30 million in FY '26, FY '27, $30 million. That's due to the productivities. We're just getting poor productivities, got a lot of labor there. But it's very important to us to keep the timing of the completion in line, and that's why we've been jammed, but prepared to keep that labor there to complete that project.

The delay of the spend is the thermal -- the new thermal power station infrastructure pending approvals. We're following with power because we own the Parkeston joint venture power station there, plus we are grid-connected. So they're not issues, but that's just delayed capital. And in FY '26, there's no net change, but there's certainly that uplift of the overall project due to these poor productivities.

Yes. Okay. I guess I'm just trying to drill down a little bit more on your retaining the 23 million tonnes as a guidance number effectively for next year given that the capital has moved a bit. So is there anything more you can add on that?

No. So we will provide the full year guidance with the quarterly, which we typically do in July, on the June quarter. So that will give the outlook for everything for the full year for FY '27 and equally, the overall ounces throughput for KCGM sources, et cetera. So yes, quarter, we're on track for completion and commissioning of the plant in the September quarter. It obviously moves from the old plant to the new plant and then has a ramp-up, and that will relate to how we achieve the full year on that.

Got it. Okay. And then just is there -- can you give us a little bit more detail on the progress at Hemi as you move towards FID there sometime next financial year?

Yes. So really, it's still depending on environmental approvals. We're working closely on the water trial progress, which would be this quarter. So working on that progress...

Just need silence on the back of some of those calls, people who need to go to mute. The -- yes, sorry, on Hemi. So the approval is still pending with environmental. It's tracking okay. There's no real curveballs in it, but we're certainly -- it's been delayed from where we predicted, and that's why we pushed the timing of FID out. But yes, we -- I think the other part with FID, we're going to have to be very dependent on the refreshed pricing and with the current backdrop of cost escalations some real comfort with learnings from KCGM, et cetera, productivity levels in labor and the escalation costs around any hydrocarbon-based plastics, fuel, tires, freight. We've got to be really certain on FID there. So I think we'll be very conservative in our view on that.

Your next question comes from Daniel Morgan with Barrenjoey.

Just on the super pit, I mean, you've explicitly given more detail on splitting the project ramp up in the Stage 1 and Stage 2. I'm just wondering what are you trying to -- the message you're trying to get to the market here is it the throughput will face a lot of disruptions to factor that in from tie-ins? Is it cost realized pricing from selling concentrate, not gold dore for a period of time. And I know that throughput is 23 million tonnes on Page 4. Has this been updated at all in light of latest thoughts of delivery? And does it include the disruption at Gidji that you're talking about?

Thanks, Daniel. Look, the 23 million tonne hasn't been updated, and we'll revisit that with the full year guidance that we'll provide in July. So we need to consider everything at that point on the stage at which we've turned on the plant. What we're trying to communicate with the division of Stage 1 and Stage 2, it would not make sense or sound odd if we were continuing to spend money in FY '27 on this project yet have it running. So we're trying to be really clear that Stage 1 is the 27 million tonne per annum plant operating and that's for commissioning. That's built in that way and will be commissioned and ramped up in the September quarter.

Continuing on in parallel and subsequent to that, not affecting throughput or impact is stage 2. It's effectively all of the ultrafine grinding activity occurring for 100% of that 27 million tonne per annum capacity at the Fimiston location. So people just -- I think maybe that granularity wasn't there. Right now, the concentrates go 20 kilometers north to Gidji from the current plant, get ultrafine ground and then brought back and treated and turned into gold dore at Fimiston. So all of that, the part of the efficiency is productivity to bring all that activity, which was explained in the FID and explained in the overall project approval. It's all occurring on the 1 side. The original pricing included those 2 things, but the design of the activity Stage 1, Stage 2 is there.

The other highlight that we'll talk to is in half 1 of FY '27, we will be selling concentrates, continuing to sell concentrates, which is fine and the economics of it are sound. So that's not an issue, but we are just letting people know that until that second stage is complete and can take 100% of the concentrates generated, there will be some of the concentrates go to Gidji and some go in sales, which we've been doing. They go out through ports and going to smelters, and we've got good payability terms on that.

Yes. Just moving to Carosue Dam. I see that you've just called out that open pit mining is ceasing. Any plans for higher underground production? Or what are current thoughts on the longevity of underground mining?

Yes. Thanks, Daniel. It's Simon. So we're still continuing with the underground mines that we've got. So Karari, Dervish is looking better at depth, and we're getting some drill hole hits at Dervish, but porphyry and million. That's the four undergrounds that we're running at the moment. Our sort of next phase is really looking at Twin Peaks and Kiena as the underground operation. So we're just moving into that phase of more underground as some of them wind off over the next couple of years. We then transition to those other underground operations coming in. There will be some open pits further into the future, but not at the moment.

And just on, I guess, a broader question of, I think you're conducting operational reviews across the business. Obviously, you've got Jundee...

Sorry, Daniel, I think, you dropped out there.

Sorry, can you hear me?

We can now.

We can now, yes.

My last question is just you're doing operational reviews, I imagine across the business, including Jundee and others. What is the latest plan on providing the outcome of these? Earlier you had said by the end of the year, is there any update to that time?

Yes. Thanks, Daniel. No, we will stick to the timing of -- we'll provide that medium-term guidance, which is a multiyear outlook, and we'll provide that this calendar year. We will provide the FY '27 guidance with the quarterly for the June quarterly, so in July.

Your next question comes from Matthew Frydman with MST Financial.

Can I firstly just dig into a little bit more detail on that staging of the expansion. And I understand the detail you've given in terms of the mechanics of Stage 1 versus Stage 2 moving the ultrafine grind down to Fimiston. But I guess just wondering, is this timing or staging approach, has this always been the plan? Or has this really been an outcome or has it been driven by the productivity issues that you faced in terms of bringing 1 part of the process on a little bit later than the rest?

Yes. Thanks, Matt. Look, the staging and the way the contracts form with the contractor has always been separable portion 1, separable portion 2, always and their contract structure is different. So they were designed, engineered, sequenced exactly like that, and that's how the FID was approved, and that's how the total number contemplated this we've contingencies on both those projects. As they've transpired separable portion 1, which is that 27 million tonne per annum plant. That's on track with the timing, but it's overspent because of the productivity is, and we're still working very hard for those final commissioning to be commenced and switched over from the old plant to that new plant in the September quarter, early in the September quarter is our current design and plant and ramping up throughout.

Separable portion 2, the ultrafine grinding activity is another 4 to 6 months of activity. So the team moves from step first to the second, stay inside and get that completed. So that was always understood to be the case, and we don't get the recovery improvement of the overall project, and we had said that on the onset until all of that activity and that volume of concentrate gets done. So we're saying expect that through half 1, which will be material going to Gidji and the lower recovery in half 2 of FY '27, and we've got Stage 2 all commissioned and all the concentrates staying there, improved recovery, lower operating costs and all of the activity staying on the site. That's the final piece of the improvement for the investment project.

And Matt, just to add to that. So Separable Portion 1 is over 95% complete today. And the second portion that Stu was talking about is already 48% complete. So they're happening in parallel. It's just the priority. 27 million tonne case is the focus to get first ore into the mill and start producing gold. And the second stage is just under 50% complete at the moment. So that's just trails and gets finished in H1.

Understand. And then secondly, on the power plant, you said that you're comfortable there, given that, obviously, or got your own plant and also a grid connection, but obviously, we know that the grid stability in Kalgoorlie has been an issue recently. So I guess just wondering when exactly is the new power plant needed to support the from the bigger mill. And I guess, how do you see those stability issues potentially impacting or potentially not impacting.

Yes. So we won't -- we'll have access to the grid and the 50-odd meg of power from it. We won't be reliant on it. In the first instance, Parkeston is the foundation supply for the new plant and then the move to the newer thermal plant. It can occur within today 18 months, 2 years, and it improves the overall unit cost of the power and final piece of that is the renewables project that has been approved. So the wind and solar. So really that thermal is just the firming power for that renewables project and that's another step change in the cost structure for the site. So yes, step 1 is we're in 50% joint venture of Parkeston Power, which underpins the expanded sort of mill demand.

We are building a new thermal power station subject to those approvals timing and then the renewables that sits on the back of that, which is a third-party's balance sheet. We've got some switching gear we own. Fundamentally, that comes in within a couple of years to start really driving the power costs down, and we will be in control of our own power security, not dependent on the grid. And if anything, we're out there to support the Goldfields grid in Western Power. We've got some arrangements we're progressing quite positively with the state to assist the Northern Star and assist the gold fields in underpinning that power.

Okay. I mean, maybe to put it another way, can you achieve 22 million tonnes without the support of the Kalgoorlie grid in FY '27?

Yes. And it will be running at times, it will be running a full 27 million tonne per annum capacity. So full demand. We've got over 100 meg capacity at Parkeston. So 99 meg derated with temperature, and we got 52 meg from the grid well in surplus of the demands of the mine and the mill expanded case.

Okay. That's pretty clear. And then maybe just lastly on the Jundee technical review. You've talked about considering a range of outcomes there. And obviously, you said you're going to give more detailed guidance a little bit down the track. But maybe just conceptually, can you book in the sort of range of options that you're considering in that study? I mean if I think hypothetically may be a conservative outcome or a conservative option might be at Jundee that you just mine out the remaining reserves and then kind of ramp down the reinvestment in that asset. That might be a conservative kind of view? Or should I actually be thinking even more conservatively than that conceptually could there be a reduction in the current reserves, given the increase in the cost structure or some of those other factors?

I think it's too early to give that granularity. But the concepts are -- the costs are high. And our aim is to cut absolute costs out of the site and then see the maximum output we can get through the current infrastructure that's there. So it means a reduction in intensity of activity to get the lower unit costs. If anything, that will extend at a lower profile can extend the reserve life that's there. And as far as that investment, again, has to be ranked and prioritized against the other opportunities we have in the business. As you appreciate now, there is a lot of intensity around a number of jumbos developing number of stopes carrying a number of diamond drill rigs doing discovery to come in depletion. So taking a bit of that pace out will actually enable a bit more time with the overall asset to focus on quality over quantity.

Your next question comes from Kate McCutcheon with Bank of America.

I got the company right this morning. I wanted to ask about the buyback. So we had that announced the $500 million circa 1% of your market cap. Just talk me through how you think about buying back your stock here versus investing that in organic growth, et cetera?

Kate, it's Ryan. Look, I think right now, it's -- yes, some of the most accretive capital allocation we can put back into this business. We see a strong outlook ahead. We're close to turning on our new mill. We're going to see cash flows live significantly there. So we see strength ahead and we see value in our underlying business.

Okay. And while I've got you, Ryan, I think the tax cash saving numbers you gave us are new. Is it fair to think about that magnitude being less than P&L tax for '27 and '28 that you gave us on the tax shield? And secondly, did you say next quarter's asset is expected to be $75 to $85 an ounce higher as a result of oil prices? Or did I mishear what those comments were?

No. So I'll start with that for the last question first, yes. Yes. So $75 to $85 an ounce higher is our sort of estimate. Obviously, oil is volatile, but that's our best view of the impacts this quarter. And then on the tax shield, which I think you're referring to Hemi, I guess we added some more commentary at the back there on Page 10, but it's really just again reminding people of some of the timing of that. So again, the math being that we get a shield essentially of that purchase price. The total value of that from a tax effective perspective is about $1.5 billion, and we're sort of saying we'll get 50% of that back over 5 years. And it's a bit front-end weighted from a tax perspective.

So we're just guiding and reminding people that, yes, we will get this benefit. We won't see it though. We're not going to see a big lump sum come back into our treasury, it's just -- it just means that FY '27 tax will just be slightly lower, that's all.

Clear. And then if I can sneak 1 more in, updated resources reserves in May. Can you help me understand the drilling that's being done at Hemi? I assume that's mostly been infill drilling too, because I will probably get an update on CapEx, OpEx with the multiyear outlook. Is that correct before the end of the same way? And I'm just trying to understand how we think about mine life or upside at that asset versus what the focus is now.

Yes. Thanks, Kate. Just before I close, I go to Hemi on that as with diesel and fuel, that is the expected uptick the $75 to $80 in AISC, but it's not last quarter plus that. So it's the component that is increased within. But as we grow out to ounces to the so there's other things that are moving in that side, please don't just accretively add that. Hemi, we've done the drilling, but you're right, it has been really infill and testing, and we've been more aggressive on some of the pitches and shelves on the resource. So we've been -- we've had to sort of incorporate that into how we would do things which may be a little bit stricter. But that will be reflected in how we report the resource and I think equally is being more aggressive on the reserve generally to be contingency and the like. So that will be reflected and reported, which will likely be in May.

We won't be giving any other aspects of the Hemi project there, but we will be working on -- we're still working on those numbers in line with expectations around approvals. But the CapEx you're talking about perhaps is the budget of exploration in the forward years. That will be in the multiple and whether we intend to put money into Hemi, my attitude is, there's enough ounces in the ground without really heavily going into growth. We don't need it for a trigger for a FID decision. So there might be other opportunities like Pogo or Fimiston where we get much more effective investment in exploration to add ounces to make bigger longer-term decisions than Hemi needs today. So Hemi might have a lighter approach to that drilling expenditure because there's a very, very solid base for an investment case without it.

Your next question comes from Hugo Nicolaci with Goldman Sachs.

Sorry, technical issues, and apologies if some of these have been asked. I was just revisiting firstly on Carosue Dam and Simon, your comment that the open pit mining concludes. I appreciate you've probably got new open pits that need developing. But I guess just to clarify around the timing, is that decision in the open pits this quarter and maybe demobilize that fleet largely around the strip ratio increasing and the diesel requirements that go into that. And then you're able to maybe talk through anything around the underground mining rate and grade going forward from here to potentially offset the fall in gold production by processing stockpiles?

Yes. Thanks, Hugo. No, look, just to be clear, it's not around diesel and trying to conserve. I'll slow down open pit mining due to diesel. It's purely the mine sequencing. So mines coming and going at that asset is fairly normal over the journey. It's just we've reached the end of the current open pits, 11 bells Redbrook finishes this quarter, then we might have some box cuts and a few things to do early in FY '27, but there's no ounces attached to that. It's more setting up for the next leg of the underground growth.

So probably the best way to think about it is when we do the Investor Day later on this calendar year. We could really show with a bit more visibility on some of the sequencing of the mines.

That's helpful. So if we think about it today, then realistically, the underground rates aren't picking up that materially, you're probably seeing Carosue drop below that 200,000 ounces a year for the next couple of years where you do that underground development?

It could do. We're still working through that, but we've got some good growth at Dervish. So we'll see how that plays out when we do the resource and the reserves and then feed that current information back into the life of asset mining plan.

Got it. That's helpful. And then, Ryan, just sort of running back on the buyback piece, just confirming then to the timing and magnitude of the buyback as it stands purely a value decision on your stock and then maybe come August as KCGM and your capital requirements become a little bit clearer. Should we consider scope to maybe take this to a magnitude you've previously targeted as being more meaningful around the buyback?

I think everything is always on the table, Hugo. We want to allocate our capital to the best return. So buyback is something if it gets exhausted, if we're through it quickly, it's always -- we're always able to assess new opportunity there. And as I said, we're not too far away from seeing that change in free cash flow. There's challenges across the business. There's challenges in oil, all these things. So right now, we've decided on that, I guess, quantum. We're ready to act. And I guess we'll make those decisions as positive time plays out.

Your next question comes from Jonathon Sharp with JPMorgan.

Just with KCGM mill expansion, the CapEx. Can you just help us understand the split between construction productivity and cost inflation and which is proving harder to control as we move through commissioning.

Yes. So -- thanks, Jonathon. So look, there's no lift about $60 million for that project that we've just reported, so 30 this year for next year. I'd say, and it then knocks through to the other, but probably 2/3 of that is just the lower productivity. So you've got more people doing the same work at that elevated cost. In turn, cost escalation is occurring, not just through diesel but through all other things, and labor is embedded in all of those cost escalations, which we don't see easing. So that's been a large part of -- you have extra labor, it flows through to commuting that labor, housing that labor, the consumables they use, all of those things knock through. But yes, it's a reality that underpins anyone spending money at the moment.

Yes. Okay. That's clear. And just as you move through commissioning without getting into commercially sensitive detail, does the main contract to remain accountable through wet commissioning, performance testing and other performance incentives acceptable criteria tied to sort of final handover, just interested in knowing a little bit of detail on that?

For sure. I mean, there's pretty traditional standard things where you do a handover and it's got to make criteria, so that's embedded. And look, we've got the commitment from the contractor that they want to see this working as well as we do and promote it for the next opportunity. So that's there. Equally, we've got the same contractor doing Stage 2. It's a different structure, again, different incentivization. So our approach to that is going well. And Simon spoke to 95% of the stage 1 is complete. Nearly 50% of Stage 2 is complete and those structures drive that behavior largely. So yes, we're okay with those things, and we'll be tracking and checking those things closely.

We won't be silly on the risk balance here. If it comes down to disputes around small amounts of quality, we think running the plant and addressing some of those things as we go rather than not waiting to move in new house to your fly screens are on, we'll be sensible in the timing of that.

Your next question comes from Adam Baker with Macquarie.

Thanks for the color on the increase in fuel prices. Assuming mostly it's related to diesel. But just looking at the midpoint of guidance, I mean, that's implying about a 3% increase in your cost base. Just wondering if you go back to the start of FY '26, prior to the diesel price escalation. Can you give us any color on what diesel prices were as a percentage of cost base for the business?

They're probably -- Adam, it's Ryan. That's basically doubled, I guess, in this quarter that we're forecasting. They're probably 4% of our business, I'd say, back then. Now they're obviously pushing 7%, 8% for the quarter.

That's good. And just secondly, on clearly, a lot of optionality for you guys to deploy that. Just wondering if you've considered any minimum net cash threshold before you deploy it, noting you've got $320 million at the end of the quarter, I'd say that you wouldn't draw down on the $1.75 billion corporate bank facility to prioritize the buyback, for example.

I think, Adam, what I'd say is, yes, we want to maintain good liquidity. We've got good flexibility on our balance sheet if we have to draw debt if for whatever purpose. And we see the cash flows ahead, right? So we're sitting here in late April. The mill will turn on early FY '27. We're really looking forward to that. We see what's ahead. There's challenges in the sort of more global economy with oil, but we feel is on with our balance sheet, with our cash and bullion on hand, we can manage that.

There are no further questions at this time. I'll now hand back to Mr. Tonkin for closing remarks.

Okay. Well, thanks, everyone, for joining us on the call, and I appreciate your interest in the company on what is a very busy day. Thanks very much.

That does conclude our conference for today. Thank you for participating. You may now disconnect.

Thank you for standing by, and welcome to the Northern Star operational update. [Operator Instructions] I would now like to hand the conference over to Mr. Stuart Tonkin, Managing Director and CEO. Please go ahead.

Good morning, and thank you for joining the call today. With me is Chief Financial Officer, Ryan Gurner; and Chief Operating Officer, Simon Jessop. We provide an operational update today given a weaker production performance quarter-to-date, which makes achievement of the full year production guidance challenging. While several factors will continue to have a meaningful impact on the full year result, the company's best estimate at the current time is that FY '26 production will be above 1.5 million ounces.

Significant and ongoing operational challenges remain with the existing Fimiston processing plant, which result in difficulty of maintaining throughput, and we have considered this variability, which has led to a revised outlook.

At the onset of FY '26, we planned an annualized throughput of 12 million tonnes through the Fimiston plant, which was a reduced level from historical performance of 13 million tonnes, recognizing the age and condition of the plant as we operate until the new expanded facility is commissioned in FY '27. The immersed unplanned outages, disruptions and the consequential production losses will likely result in the plant achieving [ 10 million ] tonnes for FY '26, which is materially below plan.

At the end of February, stockpiled high-grade ore ready to be milled totaled approximately 2 million tonnes at 1.6 grams per tonne for 100,000 ounces. This recognizes that mining activity from both the open pit and the underground are tracking to plan and will be available for future processing.

At the existing Fimiston plant, we have added breakdown maintenance labor to assist with unplanned downtime. We continue to assess and balance preventative maintenance tasks to preempt and mitigate disruptions, and we will continue to do so until the new plant is commissioned in early FY '27.

Pleasingly, the new Fimiston expanded plant is tracking to schedule with the added labor resources we have applied with over 800 people working on the plant and over 400 people on enabling works, including the tailings dam construction. These staffing levels and the complexity reduces over the coming months as completion nears, and we are focused on ensuring that this exciting project is not interrupted by current production setbacks or actions to deliver short-term guidance.

Now at Yandal, our year-to-date progress is also below plan. This has resulted in high cost production and the company is undertaking operational review aimed at reducing costs and prioritizing higher margin ounces there. Jundee, which has traditionally been able to scale quality with quantity, is becoming more capital intensive, which is evident in activity and costs. And as part of this, an operational review, there's opportunity to redeploy surplus personnel and equipment to higher-margin operations, and we expect these changes to occur over the June quarter.

So the company has also commenced work on producing medium-term forecasts. We're listening to investors on that requirement, and we will plan to release prior to the end of the calendar year. And so the opportunity today is to go through the detail of this and answer questions that we can.

So with that, I'll pass over to the moderator and you've got myself, Stuart. You've got Ryan and Simon here.

[Operator Instructions] Your first question comes from Hugo Nicolaci with Goldman Sachs.

I appreciate being able to ask questions. So a bit to work through here. But look, firstly, on this year, I get not wanting to chase FY '26 and then sort of risking the outlook into next year and beyond. But translate your sales for January, February of [ 220,000 ] ounces and call the March quarter [ 330 ]. You're sort of then implying to get to that 1.5 million minimum that you need to get back to June last year, sort of 440 despite the uncertainty of KCGM and Jundee. Can you help us sort of piece together how you get to that 1.5 million ounce outlook for FY '26, please?

Thanks, Hugo. Look, January and February are representative of quarter 3, so we do expect a stronger quarter 3 than you've quite there on the exact straight line run rate. So with this guidance update today, we've considered how we're tracking in March, what's in front of us as well as the outlook of forecast. I would say we were -- there's 2 main drivers. One is the underperformance of throughput at KCGM that we were expecting to restore with the efforts put in. So we've kind of dragged right. Really, it's a throughput rate of nearly 9 million tonnes for half 2 instead of to deliver to 10 million for the full year. There's upside opportunity there as well as downside risk.

And then the other element was, as we've traditionally done throughout each year, not designed by activity of the hockey stick, not expecting an outperform out of Jundee in quarter 4 has really put some ounces out of that quarter 4. So we've -- we're really looking at this from a risk lens, how bad can it be if we don't get outperformances, really [indiscernible] recognizing the contributions from each of the assets. And today is important for this disclosure to talk about KCGM mill and our outlook on Jundee. We feel the rest of the operations are tracking to plan and okay.

Stuart, can just clarify then? In terms of March, so you're saying that January, Feb is not indicative. I mean, for the March quarter then, is this something like 350 to just 400 sort of the range that we should expect and then we can extrapolate the fourth quarter from then?

Correct.

Got it. And then if I can, just on -- turning to Jundee, sort of reprioritizing higher margin material and relocating people across the portfolio. I mean what do you think then is the outlook for that asset going forward here? And what does that mean for the Yandal hub target of 550,000 ounces over the medium term?

Yes. Look, we're probably -- it's probably premature to give that outlook today. We're doing the work we need to do that deep dive on the asset. I'd say it can operate up and down those ranges, but at what cost. So I guess, what we're saying today is at 300,000 ounces, which was our aspirational running rate, it's a high-cost high intensive, high development stoping drills demand. We don't believe that's the best place for Jundee to sit. We've got to do that work. Once that's complete, we'll update. And there's no risk on the redeployment of people and equipment. We can send that into other operations. But this is around a reset fundamentally for Jundee, which contribution into Yandal. We've already taken a bit of a reset of Thunderbox. This is really the combination of those 2 things, and we've just got to do that work.

Your next question comes from Kate McCutcheon with Northern Star.

Apologies, I must have messed up the company name there. So -- not yet. So at least 100,000 ounces lower for the FY versus what you thought 3 months ago. How much of that delta is KCGM versus Jundee or the other assets? That would be helpful.

Yes. So I would say, when we updated, we planned for some uplift at Jundee likely 20,000, 25,000 ounces of windfall of high-grade stopes in quarter 4. You've seen Jundee swing. It's not orebody. You've seen that performance historically before. Same as at Pogo, where you've got -- there's no good orebodies that you can have those swings, those high grades.

That's what we've pulled out of that, but I'd say the bulk is KCGM. And the opportunity is also to get every 100,000 tonnes effectively up or down is 5,000 ounces. And so if we were able to afford that uptime or keep things running through that plant, the ore is there on the ROM in front of it. There's a bit of a time lag in getting it into concentrates and into door ad sales. But that's why we've had to sort of really take them back, that really hedged on KCGM as the ballpark of that step down.

Sorry, I'm not -- so the bulk of the lower ounces is KCGM. I'm not clear on the magnitude.

Correct. 2/3 is KCGM and 1/3 of that really is Jundee.

Okay. Got it. And then no update on cost today. Is there anything fatally flawed in taking the $1 million number implied in the higher guidance with the lower denominator? Is there anything else to think about for the all-in sustaining cost there?

Look, year-to-date, we're tracking within the goals that we have stated and restated or reset, I guess, in January. So if we were to depart from that, we would have included that in today. What we don't know going forward is impacts around oil. I guess what we do -- we do know that it has impacts. And so we look at the sensitivities to it. In the scheme of things, we still feel it's ounces and ounces as the denominator gold, so it's more effect on the ask.

Our dollar millions are largely committed with resource at these levels. We're spending that effort and energy at work. So really, it depends on the ounce profile to get to that. But year-to-date, we're tracking within that 2,600 to 2,800 [ base ].

Your next question comes from Daniel Morgan with Barrenjoey.

Question -- my first question is just at Jundee. Can we just understand what's going on a bit more there? Is it orebody related in that it's deeper or more narrow, becoming harder to reconcile and just an old tired operational asset that we need to rethink fundamentally how big it is? Because the market has 250,000 ounces in the numbers for the next few years, which sounds like redeploying people and equipment. It sounds like a significant haircut needs to be taken to production and possibly life.

Thanks, Daniel. So we're not meeting the grade to plan. There's some slight downgrades on some of those things. We're understanding why. It's obviously, even though it's decades, we've operated and owned it. You're seeing that decline. Questions is, I think, it's pretty evident on previous quarterlies, the departure from actual grade to reserves. So we understand the higher grade, upper levels that we're putting in the paste plant. Start brining that high grade of pillars and remnant material in, but we will look closely at the overall resource and reserve again as we do at the close of March and publish that.

But I think this is more around the nearly 3 kilometers of development a month, 150,000, 160,000 stope tonnes a month. It's very intensive. We got 13 diamond drills there to -- from a discovery power wave to replace depletion. It's just a busy, busy, busy place for the same or less ounces than we developed decade ago.

So it's a big system. What I'd say is maybe that creep has kept us going, and we just want to actually do a bottom-up overall plan review. It will take a number of months, I guess, us going through that information. Decided doing the best they can do with what's in front of them, but we need the intervention. And that's what we're prepared to do, is go through and really, really look at the detail.

And I know you say that there's a consensus at 250,000 ounces. We can operate the mine at those levels, but it's at what cost? And therefore, we're saying as an overall contribution to Yandal or the group, is that drop level for us.

And I guess, as a broader question, I mean, you commenced a formal operational review on Jundee. I guess there's been productivity issues and some other assets and missing guidance, et cetera. Just wondering, should there be operational reviews on other assets or strategic reviews? Or why only Jundee?

Yes, fair question, Dan. I think we're really calling this out right now of expected new plan going forward for that asset, and we need the time to do the deep dive. We are doing operational reviews always as just part of our normal business. But it's usually -- when you've got an outcome or a clear view of what's not working, then you've got decisions in front of you to take. And so that's really what we're calling out this asset right now, is the current plan afoot is going to be an expensive cost one, and so expect a different plan for that.

If I give the other example of Pogo, we can see around the dilution of the grades that have occurred. We get things right. The plan is robust and secure. So it doesn't need a bottom-up analysis reveal. And we've done that to a life of the plan we've got, and it's around the controls we can see in front of us to get the benefit. We've seen improved grade at Pogo, and we've still got work to do. But we don't see that fundamentally as an issue, whereas we see the current plan at Jundee is going to get harder and more expensive and more intensive, so let's intervene now and look what it looks like in the coming years.

Yes. Dan, if I could just add to that from Simon, it's more it's around the Jundee, the execution risk as well of the -- pulling all the different areas together. So as you said, we're 2.7 to 3 kilometers a month. So just trying to find where is that balance between execution risk and delivery along with the grade variability. So we do need the time and space to do that deep dive, but it is around execution risk at the higher ounces.

Right. And then maybe, I mean, a big driver today is the mill performance at KCGM. Can you just help us understand a little bit more? Because you've got a very complex thing you're achieving this year where it's going to be effectively mostly a brand-new mill next door to an existing mill. So you've got those 2 things happening in parallel and operating mill versus the project. You've got people running the existing mill, and you will have to have people run the new mill. Like is the challenges here people related and trying to do too much at one time? Or is it the old mill is old, clubbed out, unreliable and it's not worth it from a returns perspective to be patching up and applying capital to a piece of equipment that's going to shut down in several months' time? Like just help me understand what is at the core, what is driving this problem.

Yes. Thanks, Dan. Simon. If I go with the mill, so KCGM's 37 years since the asset first produced gold. So we are struggling with lots of different areas across various maintenance areas. So we have a lot of bogging events, 30% of our downtime sort of in bogging events, which is from a complicated circuit of 5 mills. We're going to only 1 of those mills goes forward. The float circuit has a lot of mechanical issues, so that's sort of roughly 30% of our downtime across the group. And then you've got aging electrical areas, which is giving us a lot of grief at the moment. So that's 20% to 30% is the electrical and air. So they're the broad areas, but it isn't -- like quarter 2 was 1 key area, which was the crusher. Since the 5th of January, we've had 0 issues with the crusher. That's performing. It's from the -- after the PIM sag through the rest of the plant is where we're having lots and lots of stoppages, which just gives us instability in the plant, and we've just got large pieces of [ downtime ].

In terms of KCGM, the new mill and the old mill, they are separate teams. So the new mill is running in parallel, completely isolated to the existing personnel running the old mill. Over the next few months, we've started -- well, we have already started the ops readiness training for operators. The maintenance systems for the new mill is all -- had 18 months of work on it. It's -- that's tracking very, very well, and we want to maintain the focus on preparation for the new mill in FY '27, but at the same time, as Stu said, every 100,000 tonne we can get out of the old mill is 5,000 ounces, which is large revenue.

So they are 2 separate teams. We're just seeing much, much lower throughput than we have historically. We budgeted for that, but we haven't seen -- we've seen a material departure from what we budgeted at 12 million tonnes.

And Daniel, I mean, the question of the people and the stretch and the interactions, I mean, this has been something that management and the Board have been really closely in front of mind, is that is one impacting the other. And so Simon's saying they're separate teams, they're literally physically ring-fenced the activity, but the bandwidth of making sure that near-term decisions doesn't compromise the delivery of the new plant, that's really important, and that's what we're reinforcing as well across the group.

So doesn't mean we've surrendered or given up on delivery of near-term targets and guidance. We still work on that, but we isolate the go-forward new plant has the attention and efforts because the end of the day, that's the multi-decade the multiyear investment, that's multi-decade sort of uplift is the step change for the group and the company, and we are very close. I mean the back of the 3-year builds, and it's looking great. I was bolting around the plant a week ago looking at the to do list. It's impressive quality and we're excited to see it turned on.

It's even more pleasing when you look at the old part and the deterioration of it that we've made this decision 3 years ago to replace it. So we thought we could get this plant, really the existing plant singing right up to the point. There are elements of the existing plant we may utilize and repurpose in the future. So we don't want it to fall in a heap either. So those decisions around keeping it going, there's never a financial case to say let it fail and stop it prematurely. Unfortunately, it's always a point to keep it rolling. So at the moment, efforts and energy on both of those, but they're separate teams.

Your next question comes from Levi Spry with UBS.

Two questions, please. Firstly, on FY '27 guidance, I guess, thinking about KCGM plant, can you just step us through what's still on that to do the list? And what are the assumptions behind the 23 million tonnes for next year? Or what other assumptions are in there? Yes.

Thanks, Levi. I'd say those things haven't changed from what we've said today's announcements about the here and now in existing plants. The expectations for the completion of the new build is a ramp-up during quarter 1 of FY '27. Ideally, we're at the early part of that quarter and the 23 million tonnes is related to the full year with planned and unplanned assumptions on the downtime, what I believe we will provide is a bit of a ramp-up curve that shows and explains quarter 1 shouldn't be times by 4. Every plant around the globe that's being commissioned in this case has those ramp-ups. You've got the McNulty that basically says early when you're building these things, you need to settle them in. And so the start rate isn't the exit rate, but these are all dependent on the final tie-in.

So a lot of the labor, there's nearly 900 people there that's decreasing in the next couple of months as we close out these projects. Really, that labor by the end of June should just be starting to move across to Stage 2, which is all where the ultrafine grinding circuit to redundant happens. And we should be powering up and turning over and getting flows-through the new plant. So those are the things that are still on track.

We've obviously added the cost and the labor to achieve that time line, and we're pleased with that progress today.

Okay. And then if I just think about the working -- the works towards producing a medium-term forecast, so the steps are a reserve and resource update at the end of March, guidance in between 7 and then be into that medium-term forecast at the end of the calendar year with Jundee potentially the main moving part. Is that the summary?

Yes, Jundee, but I guess we should have greater information on time lines for Hemi as well. So the way we would explain medium term is what investors -- listening to investors what the request and rightly say multiyear production costs and capital. And the real levels is that multiyear ramp-up of KCGM, the new plant, coupled with the build of Hemi and then the rest of the assets at what go-forward level they are at, which would include options that we'll assess for Jundee, how big it is. Is it and what is a cost profile? That's how we would talk about the multiyear.

So to your point is absolutely resource reserves is a key bookend. We get that end of March. We do the work in quarter 4 around budgeting outlook forecasts. Ideally, we've completed this deep guide on Jundee with decisions, and then we're able to provide the market with medium-term being multiyear costs, production and capital.

Your next question comes from Matthew Frydman with MST Financial.

Can I just follow on from that question, I guess, on the FY '27 ramp-up at KCGM and understanding that you provide us a bit of a ramp-up curve in time? But can you maybe sort of break down roughly or conceptually how much you've seen throughput from the new mill in FY '27 versus how much from the old mill in your prior guidance? I guess I'm just trying to understand what is the likelihood or the range of outcomes if these issues at the old mill continue into FY '27 through the crossover period. Does the old mill represent 10% of the production that's at risk of ongoing failures? Or is it 25%? Or if you sort of give a ballpark on that, that would be helpful.

Look, good question, Matt. I think we looked at it from -- also the spread capacity and more of the weight in the back part of the year of the new plant. So at a very reduced rate, even a 50% performance out of the new plant outstrips the old plant, so -- and we expect a better outcome, clearly a better outcome than that to get 23 million tonnes.

So what I'd say is that we will -- we wish to switch over to the new plant and lean into it as soon as possible and the reliance on the old plant has not been there. So yes, I think the run rate of 9 million tonnes in the half 2 should not really continue in FY '27 and deteriorate the overall outcome. The level -- if we were not to achieve 23 million tonnes from the new plant in FY '27, either because of a delayed start or because of unplanned downtime throughout the year, one offset from that is the differential in grade feeds.

So the tonnes that would be displaced would be the lowest grade stockpile, 0.6 kind of grams, and we would preferentially put in your underground and your gold pipe high-grade feeds. So even if it wasn't 23 million tonnes, it doesn't mean the ounce profile is proportionate. So that's one lever.

And then ideally, we've built a 27 million tonne per annum plant. Our attitude is we've given ourselves multiple years to get up to that consistent rate. But day 1, when we turn it on, it should do that. And then it gets turned off, gets fixed or adjusted or talked up. All of that planned downtime is why it's 23 million. It's not running at that rate. It's running at a 27 million tonnes per annum plant or better. And then it's been deliberately brought down or the reliability as we settle things embedded in delivering a full year, a lower overall tonnage.

So there's lots of moving parts involved in assumptions. It's never smooth. So we'll try as best we can to show people how the ramp-up would look like, and we'll try to provide as much transparency as we can. It could be lumpy, but I just explained that this is a 3-year build. It's a $1.5 billion construction [ 6 plus ]. It's there for multi-decades. We want to get that right because it is a real step change benefit to the business and the value creation.

Yes, understood. So just to be clear on that, so you're saying that the 23 million tonne target is purely what you expect to put through the new mill in that first year and then hypothetically, anything that you get out of the old mill is separate to that or on top of that? Or I'm guessing that opportunity to -- it's either running one or the other, the distinct turnover. You don't have the opportunity to potentially squeeze out of the [indiscernible].

Yes, correct. It's running one or the other because part of the stream feed through the crushers and SAG is the new part of the new circuit. So there's minimal downtime of the switchover, but there aren't -- you can't run both at once.

Yes. Got it. No, makes sense. And then maybe secondly, a bit of a broader question, and Simon described the various issues that you're facing with the old mill, which, I guess, effectively could be summarized as an overall issue of asset integrity at probably, unfortunately, the most important asset in the whole business at the moment in terms of the amount of revenue that it produces anyway. So I guess the broader question is, is there anything that needs to change in the business to prevent this kind of issue going forward, be seeing this kind of string of downgrades is just a confluence of events which have been outside of the control of the site team or the executive team in terms of [indiscernible] outcomes that have led to these short-term issues in your view? Or are there things that you think you can do going forward that could be changed structurally, culturally or whatever the case may be to drive, whether it's drive better compliance to plans or better compliance the guidance or improved asset, integrity outcomes, all those sorts of factors?

We take accountability for that -- for those downgrades. They've been largely within our control on the things we've tried to manage and the risks we've understood. When you're managing risks, you're putting in all the mitigants and sometimes they get realized.

There are external factors that impact even now if I get a phase shift on a power out in Kalgoorlie, a nanosecond of power blip, and I can have hours or days of cleanup and bogging of pumps in that plant because it's the tech and it can't deal with it. Now I can blame our systems and lightning, but ultimately, it's the integrity, understanding operability of that existing plant. And as that example, I'm pleased that the new plant should be able to manage these type of things. And as we get that sort of battery storage and those other things that sit behind it, we don't get impacted in those ways. That's how we thought about it.

But when we talk about multiple downgrades, each of those are finite events and that have been updated as best we can when they occur. We're not trying to second guess or predict or game messaging. We're working hard to growing business, which is never a straight line, to give transparency on what we know when we know it. And that's really what today is, too, is, right now, with the performance to date, we can't see -- we see great risk in delivering the lower part of the guidance. So we've explained, we believe we can do above 1.5 with the continuing outlook we have for the next 4 months.

So these are the examples. And if we go back to, yes, on the 2nd of January, on the first, we had the sales. We had lots of things in place and plans. We updated the market when we're aware of those things. When we've calculated the costs, we update the market on the cost that we calculate.

So I'd say our learnings out of that, we don't enjoy bad news as anyone else. We're working very hard to get it right. We absolutely are learning and have learned from these experiences and we intend to incorporate that into our outlook going forward. It doesn't mean we're sandbagging. It doesn't mean we're trying to put in buffer, but we certainly need to give you, the audience here, the basis of the assumptions of why we call out what we call out.

I get that on the external, it appears that we haven't been forthcoming with information. It's not the case from our side. Everything we've put out, we have a -- we're a technical team. We've got science and background and assumptions based on plans, contingencies, et cetera. If I was sitting here in January, I absolutely thought 1.6 was a very comfortable floor that we would clear and as is our team. So to be sitting here as soon as now saying things haven't gone well, I get it. It's disappointing for us as this audience, and we've got to learn from that.

Your next question comes from Ben Lyons with Jarden.

Might just carry on that train of thinking. Stuart, I mean, it's very disappointing. But to then tell us it's going to take 12 months to give us what we want when you've got all of this science and all the technical capability and aptitude and everything else, you just mentioned that sits behind it, haven't you just embedded a 12-month overhang on the stock price?

Well, that's not for us to decide, Ben. So what I'm saying is we've given enough time for us to do that thorough work. And I think it's important we need to resource the reserves. These things take time to go through and look at plants. When you look at things like Jundee, we want to work out the current development that's there, to get the best out of that and do things in an orderly fashion.

This is an irrational kind of immediate changes. It's around shifting in an orderly fashion structurally that asset to a better place. It will take time. I've said out there that, yes, calendar year is when we'll give that update, our traditional outlook comes in July or August on the year's guidance. We ideally will have great visibility around things like Hemi, but there are things that are out of our control. So when we've got it, we'll let you know.

But at the moment, you can believe there's no overhang or not. I think people voted today on the market open. I don't know if you call that an overhang.

Yes. There's other management teams that can build a processing plant within a 12-month period that -- I'll leave that. Just on the KCGM, yes, I don't want to put pressure on them by adding them in a public forum, but as soon as they get their environmentals in 12 months or a couple of million tonnes circuit. Anyway, we're just talking about an Investor Day and the disclosure that really I would have thought should have been at your fingertips already.

But my second question, just on KCGM. Is it just tonnes? Or is it also grade that we're talking about here? I mean we've been habituated, I guess, to think of Golden Pike North is a 2-gram orebody. Charlotte is a 2-gram orebody. The high-grade stockpiles at 1.6 on the ROM today. So have we got a grade reconciliation issue at KCGM we need to discuss as well? Or is it just simply tonnage through the mill?

Yes, Ben, Simon. Look, the grade of Gold Pike is performing exceptionally well. The reason the average grade of that 100,000 tonnes on the stockpile of [ 1,000 ounces ], sorry, at 1.6 is because it's still got some grade from OBH and some grade from Fimiston South or Great Boulder. So the actual Golden Pike is performing very, very well. Our recons have been 99% of late, so the GP down the bottom is performing 2 grams. So very happy with the reconciliation. The only reason the average is down is because there's other grades in there.

Your next question comes from John Sharp with JPMorgan.

Maybe just to dig into the comments you made from Kate's question. Just beyond KCGM and Jundee, is Pogo achieving grade required to support FY '26 guidance? Or is it -- in your view, is it underperforming? Is it less than adequate? Just interested in your views there.

Yes. Thanks, John. So I think it was part of the first half delivery was below plan. I think we called that out in January. We've considered to date and how it's going to go into quarter 4 in this update today. It's improving. Actions are working. So we're okay with that.

We will look closely at that reserve grade given some of the mining factors on it. But end of the day, we don't see it as broken or reconciliation being an issue. We identified some of the mining factors that were diluting that grade today.

John, just to add to that, I was over at Pogo a few weeks back and had a really good sitdown with the team there, and we've seen grade. Certainly did in December. January and February have been good months, and the teams put some really good work into rectifying the October, November issues that we did have in terms of dilution. So Pogo is tracking to plan, and we've factored that into our operational update.

Okay. And just sort of to follow on from Matt's question, just with the planning and guidance framework. Now I know you said at the start of the year, you're pretty confident in hitting guidance. But what needs to change to ensure future plans are more realistic? And probably more important, how do you balance between sandbagging your guidance versus overpromising? Is it planning? Is it -- what is it?

Yes. Thanks, John. Look, it often comes out of the stability of the asset. So you appreciate over the recent years, we're growing -- investing and growing and expanding assets and they're changing from areas. And that's where you're extrapolating. You're not inside the range, and you see other businesses in companies generally that can keep the needle pretty tight on stability. They're not growing, and they're maintaining or even harvesting.

So when we get those assets to those happy places, that gives us greater consistency. It's the rate of change and the shifting of things at the moment, which has made that forecasting difficult. Perhaps we've been too optimistic on success. They may be some more contingency and realism in some of the ramp-ups. And I'm not calling that sandbagging, but I'm saying both ups and downsides that are realistic. They are the things that we can start to incorporate into future outlooks. And then just give you as much disclosure on the assumptions so that when things move or change, we can update and provide that, but equally, people can do their own math on the flex of those things in their models.

Your next question comes from Hayden Bairstow with Argonaut.

Just a couple for me. Just on the KCGM stockpile and Simon, you mentioned the sort of 1.6 grams. But how much of that is candy grade stream or the mill only running it effectively, I guess, a 9 million tonne run rate for 6 months? Can you put a -- is there a fair bit of 2-gram dirt that you can push through to get a better growth for this half to offset some of that?

Yes. Thanks, Hayden. We are doing that. So we are putting aside the lower-grade portion of that. It is purely the throughput. So we can see head grades of 2 grams day in, day out. It's purely down to how much volume we can get through there. There's not much more we can grade stream realistically above that is the odd block in the pit that's 3 grams and things. We do get pieces of that. So yesterday, we mined 4,000 ounces at 3.4 grams out of the open pit, but it's not going to be that average consistently.

So we are trying to grade stream as best we can. There is no stockpile material going into the feed at all. It's purely around how much volume we can get through the process plant.

Yes. Okay. But almost 30%, 40% of the feeds from that higher underground grade I presume, but we can't get to a 2-gram head grade for the whole mill [indiscernible].

Yes. The underground is getting some of that pushed to the side because we're still in ramping up the underground. So the underground is tracking at sort of that 1.7 grams year-to-date, and that's because the stoping contribution is still building and we're developing a large mine. So some of the underground grade is put to the side, and we're feeding as much of the open pit high-grade material through the process plant as we can to get the right blend.

Okay. And just a finance question. I mean, you've obviously got plenty of debt facilities to draw upon. But do we assume then that over the course of this calendar year, you are going to be drawing down some of that $1.5 billion of debt, just looking at the fact that where the cash flow might be through this final phase of the build. And also, you still got that outstanding staffing the total between the grade in and Saraswati of $330 million. Have we got any idea on the timing of when that stuff has to be paid?

It's Ryan. Yes, it is uncertain, I'll say, but my expectation is not this financial year on the stamp duty. A bit more color on the quarter. We are free cash flow positive for January and February. Just above that breakeven. So we have increased our cash in bullion holdings for the 2 months. And obviously, the next 4 months, we're telling it based on the math that there's going to be an uplift. So I'm confident that our free cash on that basis will be positive.

And obviously [indiscernible]

[indiscernible]

Your next question comes from Mitch Ryan with Jefferies.

Just can you help me from a strategic perspective, I guess, given underperformance of the stock relative to your global peers and your view of the long-term inherent value of the company, what are you doing to prevent the company being taken over at a discount? And has the company received any approaches this financial year?

Thanks, Mitch. Today, I seem to feel more vulnerable with this. And so these are things and questions we'll be looking at and discussing with our Board, mate. So yes, absolutely, we've got to knuckle down and perform. Our attitude around this is we see enormous long-term value. So we've got to work to restore that and build that up. So I won't comment on vulnerability or otherwise or takeover risks, but my attitude is we've got work to do. We know what we're doing. It's going to take some time. And it's something the Board takes seriously and reviews.

There are no further questions at this time. I'll now hand back to Mr. Tonkin for closing remarks.

Okay. Well, thank you so much for your time joining the call today. Have a good morning, and we look forward to talking to you soon.

Thank you. That does conclude our conference for today.

Thank you for standing by, and welcome to the Northern Star Fiscal Year '26 Half Year Financial Results. [Operator Instructions] I would now like to hand the conference over to Mr. Stuart Tonkin, Managing Director and CEO. Please go ahead.

Good morning, and thanks for joining us to discuss our first half FY '26 financial results. We will be referring to the presentation as published on the ASX this morning. With me on the call today is our Chief Financial Officer, Ryan Gurner. This first half result demonstrates the resilience and growing returns we are embedding in our business. Our balance sheet remains in a net cash position, notwithstanding the significant investments we are making to transform Northern Star into a lowest half-cost global gold producer.

Given our positive outlook for the company, the Board has declared a fully franked $0.25 per share interim dividend whilst recognizing a soft operating performance in the second quarter. The KCGM mill expansion remains on schedule for commissioning in early FY '27 with the actions of increasing labor being positive there. I want to assure our investors that Northern Star remains committed to improving our operating performance.

Notwithstanding recent challenges, we reaffirm our commitment to operational excellence. We continue to prioritize medium-term production growth while advancing initiatives to reduce unit costs. Our diversified portfolio provides a pipeline of options that underpins long-term value creation and returns for shareholders. While today is about the half year financial results, I would like to briefly touch on the operational performances so far this year.

At KCGM, milling performance is stabilizing, but will continue to be disruptive until we transition to the new plant. At Jundee, remedy works are expected to be completed this month in line with expectations with milling throughput normalizing and focus now turning to mine volumes and grades. Pleasingly, at Pogo, mine grades have increased, but I'd still like to see further improvement and focus on dilution.

Our team remains firmly focused on driving productivity improvements and strengthening cost discipline to deliver a stronger second half for our shareholders. Before I hand over to Ryan, I would like to take this opportunity to thank our team for their efforts and commitments over 2025 as it was a challenging period. With that, over to Ryan, who will discuss the first half FY '26 results in more detail.

Thanks, Stu. Good morning, all. I'll step you now through the first half financials. So I'd like to begin on Slide 4, which outlines our key financial metrics for the group, being the company delivering a record underlying EBITDA of $1.9 billion for the first half of FY '26, which was up 34% from the previous corresponding period. Underlying free cash flow was impacted by soft operational performance during Q2, tax payments relating to FY '25 and investment in our growth projects to drive our future cash flows higher.

Looking ahead over the next 6 to 12 months, we expect free cash flow to improve with a stronger second half operational outlook, normalized tax payments and the commissioning of the KCGM mill expansion project in early FY '27. Adjusting for abnormal items, our underlying earnings of $0.53 per share grew 19% over the prior corresponding period, and we recorded strong first half cash earnings of $1.1 billion, which has enabled our Board to declare a fully franked interim dividend of $0.25 per share.

Over to Slide 5. Our balance sheet supports our strategy and gives us flexibility through the cycle to fund opportunities that may arise to enhance our portfolio to deliver long-term superior shareholder returns. Our investment-grade balance sheet remains strong and in a net cash position of $293 million at 31 December. And we have significant liquidity totaling $2.7 billion, which includes $1.5 billion of facilities, which remain undrawn.

Now Slide 6. As mentioned, we continue our strong track record of returning funds to shareholders with the Board declaring a fully franked interim dividend of $0.25 per share, totaling $358 million. The record date of the dividend is 5 March and payment date of 26th of March. A reminder that the company's dividend policy is 20% to 30% of full year cash earnings.

Over to Slide 7, where we highlight the EBITDA margin achieved by the group for the half year ending 31 December and the preceding half year for each production center. All 3 production centers are achieving healthy EBITDA margins, resulting in a group margin of 55% for the period. Yandal Production Center experienced disruptions over the December quarter and higher associated operating costs, which impacted margins in the period.

With these disruptions behind us, we expect margins to lift in the second half at this production center. Similarly, at Pogo, we are forecasting a lift in mining grades, which in turn will drive margin improvement over the second half of the financial year. And across the Kalgoorlie Production Center, our focus remains on completing the final stages of our mill expansion at KCGM with commissioning on track for early FY '27. This milestone will mark the beginning of a step change in returns and cash flow at this asset.

Before I hand over to Stu to finish the presentation, I'd like to step you through Slide 8. It's pleasing to see our improving return on capital employed, which has been a focus since the merger in FY '21. We are confident this will continue to grow over the near term with stronger production forecast in the second half of this financial year as well as the commissioning of the expanded KCGM mill.

This reflects progress on our multi-year strategy and focus on allocating shareholder funds to generate superior returns. It also highlights the strength of our first half underlying earnings before interest and tax, which is up 47% from the prior year to $1.1 billion. Thank you. I'll now hand back to Stu.

Thanks, Ryan. Turning to Slide 9. We're nearing completion of the 3-year build for our KCGM mill expansion, which remains on track for commissioning early FY '27. KCGM is positioning the business for a significant uplift in cash generation and return on capital employed from FY '27. This enhanced cash flow outlook strengthens our ability to deliver attractive returns on investment, supports capital management and allows us to advance further growth options in the portfolio.

At the January quarterly call, we announced an increase to the project's total capital investment to $1.65 billion to $1.69 billion, reflecting a lower-than-planned rate of productivity and the addition of labor to keep the project on schedule. I'm pleased to report that we are seeing benefits to this additional labor at the end of January, and the project build was 86% complete on schedule. As we near the final stages to commissioning, labor levels will reduce.

Turning to Slide 10. We continue to advance the Hemi Development Project in a disciplined manner. The state and federal permits continue to progress, which will then enable secondary approvals to be sought. I'd like to remind everyone that both primary and secondary approvals are required prior to early works commencing. And given some of that uncertainty and things out of our control, the approval of timing, we now expect final investment decision to be sometime during FY '27.

With an estimated 2.5-year build, this corresponds to first gold being forecast for FY '30 at the earliest. This timing also allows our internal project team to smoothly transition following the completion of the KCGM expansion to focus on Hemi. Further, it provides time for our balance sheet to strengthen from the uplift of free cash flow at KCGM.

Now to Slide 11. Slide 11 reiterates our revised FY '26 guidance as disclosed on the 22nd of January. We have also provided financial guidance at the bottom of the slide in green to reflect first half FY '26 actuals.

To Slide 12. Northern Star's exploration program remains a highly attractive approach to value creation to support our purpose to deliver superior shareholder returns. And since March '22, our average cost of resource addition is a compelling $37 an ounce.

We are in the enviable position where we have over 70 million ounces of mineral resources and 22 million ounces of ore reserves, excluding Hemi. This corresponds to over a 10-year reserve-backed production profile. And in May, we look forward to including the Hemi mineral resource and ore reserves into our group's annual statement.

And finally, on Slide 13, our business is set for a structural uplift in portfolio quality over the coming years. The company cash flow is forecast to grow significantly with increased production, lower costs and lowering CapEx over the coming years. We are confident that our return on capital employed will increase as we bring on projects that are long life and low cost while improving stability and reliability of the assets in our portfolio today.

Our balance sheet is strong and of investment-grade quality. We continue to review the portfolio to sustain high-margin production. Now that concludes the formal part of our presentation, and I'd now like to hand back to the moderator for Q&A.

[Operator Instructions] The first question comes from Daniel Morgan with Barrenjoey.

Just on Hemi and approvals, can you just expand on -- I know approvals are an issue across the industry and the time lines tend to extend. But what are the major works that are outstanding on the approvals front? What are the major risks to the time line? And it appears that you are flagging that this is taking a little bit longer than expected, and it's just you're flagging that FID is going to potentially move back further into FY '27.

Yes. Thanks, Dan. I guess the final investment decision, we don't want to rush. We need adequate time to consider that. So we're really anticipating the timing and to reprice the capital, put that into the business case to present and consider. On the primary approvals, so state, we expect essentially this quarter, the submissions have been in the public comments being sought and returns of those -- that information for the regulators is there.

The primary approvals on the federal EPBC, again, expecting that to be published for public comment soon. It will be a 4-week public comment period, and then there'll be iterations of request for information back and forth between the regulators. So we don't really control that time frame. The processes have those time locks that you enter into. So again, we expect that during this year, ideally this financial year, but we can't be certain on that process. And history has told us things do slip they don't go quicker.

The secondary approvals around the dewatering and other clearances that we're working on. Again, we expect and plan for those things to occur this calendar year. And therefore, we just want that time to prudently go through and present that case to the Board. I think the couple of things I've said, which we would like to do, obviously, once the approvals and the timing is clear to us, we reprice the capital.

That's what goes in with some pretty hard firm all-encompassing numbers into the financial case that is considered by our Board. And then ideally, that's subsequent to the KCGM commissioning. So learnings from KCGM can go across to Hemi and the cash flow generation from Hemi is generating to fund organically the growth of KCGM funds Hemi.

And do you anticipate a delay between like -- well, KCGM coming on, the mill expansion and then the FID, like is there going to be a period of time? Do you anticipate of, say, 6 months or more where the business has the opportunity to generate significant free cash flow from the KCGM expansion? And then the second part of that question is just what would the business do with that period of cash harvest?

I think that the 2 will occur. The timing -- the balance sheet is already healthy net cash and that will grow so that we're not concerned around the funding aspects of Hemi or the profile of its spend. We're certainly not concerned around the considerations around hedging and those types of things we've spoken about that we needed to do for KCGM years ago.

I agree that if there was a period of 6 months where KCGM is on full noise and we haven't been investing in Hemi, there's some surplus cash there. So all those capital management concepts will be considered by our Board, including all the usual aspects that we consider from time to time.

And just last question, still on Hemi. You stated resources and reserves are going to be included in the update in May '26, which is from a Northern Star perspective. Can you just talk through what conceptual changes from De Grey we might expect, i.e., could it benefit from more drilling that you've undertaken, a potential change to the gold price assumption? Or might there be more conservatism around mining shapes and the fact that you're actually going to be delivering an operational project rather than a concept?

I think a blend of everything there, Dan. We certainly will adjust gold price across the group, reflecting where our costs are and where the spot is. It will still be modest. There'll still be a lot of headroom to spot prices and long-term forecasts. We probably have stricter views on mining shapes and scrutiny, wall angles, all those things on the resource. So certainly be a stricter cut on some of the designs.

There has been some infill drilling occurring, which is really around the classifications and confidence of the resources there. So that's what we have been doing in recent months. So a blend of all that, pluses and minuses. We're trying to make this as bulletproof as we can for the consideration for entry into FID.

The next question is from Matthew Frydman with MST Financial.

Can I ask a question on Slide 9 there where you've reaffirmed some guidance you've given previously on what KCGM looks like post the expansion and the ramp-up. Maybe just starting with the FY '27 range, 750,000 to 800,000 ounces. That seems like a pretty narrow range given obviously some uncertainties around commissioning and the cutover period and all that sort of stuff.

Is it right to think that the -- I suppose, the marginal tonne of feed into KCGM in FY '27 is going to be low-grade stockpiles. And so therefore, that the actual production impact from some of those risk factors like the exact timing of the cutover or the pace of the ramp-up isn't as significant?

Or I guess to put the question another way, is the real driver of your production in FY '27 and over the medium term at KCGM more about the high-grade material from the pit and the mining sequence, which is ultimately why you're comfortable with that fairly narrow range. I hope that is sort of a clear question.

Yes, it is. The -- yes, the outlook is -- it's narrow for the asset. I appreciate that. The concept is that the best grade goes in first and that if there's any throughput reduction either through later commissioning and/or greater planned or unplanned downtime throughout the year and 23 million tonnes wasn't met that the last 1 million tonnes is that 0.6 low-grade stockpile. So the incremental grade incremental ounces are minimal.

And then any of the main primary Golden Pike higher-grade material plus the underground Fimiston, Charlotte material is milled that goes first. And then that's the buffer and thinking. We'll obviously update FY '27 guidance later this -- or end of this financial year such that we've got delivery schedules, planned, stockpiles as we have -- there's 82 million ounces stockpiled on the ROM there in the last month.

That gives us the greater confidence of how narrow that band could be. But you're right in saying it's less about the overall throughput. That's more a sign of the confidence that the build is correct as opposed to the grade going into it.

Okay. Got it. And then I guess in that vein is -- halfway through the quarter, is there any more info that you can give us in terms of how that grade performance is coming out of the pit. Ultimately, what the bottom of the pit looks like now that it's fully destacked, et cetera? Any sort of incremental update since the quarterly would be appreciated.

Yes. We believe we're still pulling that sort of 1.8-gram material high grade out of the Golden Pike North. As I said, we've got a large stockpile of that material on the ROM in front of the mill. It's been the mill that's held us up with that unplanned disruptions. So really, it's a game of just keeping that managed along until the cutover. But yes, the mining volumes, and we've had some record tonnage movements over the period.

So it's been great to see not just ore but ore and waste in that fleet being very efficient. There's about 8 million tonnes moved in January, which again is well above the rate that we forecast there. So very happy with the mining activity. And the grade, we always -- until it goes through the mill intensity into a gold bar, that's the element we -- it's all theory until it goes through based on that drilling.

The next question is from Adam Baker with Macquarie.

Just firstly, on dividends. It looks like it's around 33% of cash earnings for the first half. Was this just a driver from your considerations of expected stronger second half? Or -- just keen to hear your thoughts on why you elected to go above that range for the first half?

Yes. Thanks, Adam. Look, we look at it on a full year basis. So we're aware of where it sits against policy in the half. But again, given we had a very strong second half forecast and outlook, we believe that we'd stay within that band and policy over the full year. We'll obviously consider that on the full year results, but we appreciate it departs from that in the midpoint.

And just secondly, looking to the uplift in free cash flow expected in the second half and with heavy being pushed out furthermore. Just wondering if you've given any thoughts to pre-delivering into your hedge book similar to what some of your peers have done, maybe some of those longer-dated hedges in FY '28 to get unencumbered free cash flow earlier on in the piece.

Yes. Look, Adam, it's been a consideration. I think what I'd say is we want to be flexible to that. It's probably unlikely. Any additional cash flow, we'll consider it. We've been thinking about it, but it's probably unlikely at this stage.

The next question is from Alex Barkley with RBC.

Quick one on the upcoming resource update. Is there likely to be any impact from the KCGM expansion lifting the mill and lowering your cost base? Does that bring new ounces to life? Or is that maybe going to be seen in later iterations of your resource updates?

I think it will be in later iterations. We'll absolutely -- we kind of look at understanding that cutoff grade of material that's coming out currently as waste or mineralized waste out of the pit. You appreciate that the stockpile is 0.6, there's nearly 3 million ounces sitting in low-grade stockpiles of 0.6 grams per tonne, taking rehandle costs and the value of gold today, 0.5 coming up in the back of a truck out of the pit could be financially better than that stockpile rehandled and milled.

So that's fascinating when you look at the overall mill cost. It's going to be -- the milling cost is essentially 0.1 of a gram. So if that's already been moved, it's waste, it's in the back of a truck, it's moving to the surface. It could go direct tip into the crusher into the mill and be very economic. So yes, 0.35 starts to really produce a significant margin out of the pit, which today may be called waste, but in the future, it could be ore.

We're not changing that into the resource at the moment. But I think over the future years, it will be pretty important to look at what the overall ounces are. Appreciating all-in sustaining costs lift, so you start bringing that low-grade material in. So we've got to be quite sensitive to that.

The next question is from Hugo Nicolaci with Goldman Sachs.

First one for me, just are you able to provide any update in terms of the grade reconciliation work at some of the Yandal mines? And maybe any commentary there on how we should think about the medium-term mine plan relative to the existing reserve grades?

Yes. So the areas for Yandal, I think one of the concerns was the Orelia open pit reconciling. We're getting a lot of that material coming down into the feed of reconciling well. It's about 1.4 grams. There's about 215,000 ounces remaining. So it's only less than 2 years of feed contribution. So that will be something that we'll keep a close eye on.

But at the moment, yes, pretty pleased with what's coming out of Wonder underground, what's coming out of the TBO underground and obviously, Orelia's contribution to it. So yes, 1.3 to 1.6 has been the Bannockburn that's also going to be a feed in the future. We're doing all the waste stripping in that at the moment. That will start to be a better grade than the current sources for the Thunderbox.

In the north at Jundee, there's new mines being developed and opened at Griffin Cook (sic) [ Cook-Griffin]. So once they start to come into the feed, we'll get greater feel on the reconciliations. And then the paste plant that's being commissioned allows us to get back into some of those secondary tertiary stopes that are the pillars from the higher grade at the upper levels. That will help us as well start to lift overall average grades at Jundee.

And then just maybe one for Ryan. You noted earlier in your piece that the balance sheet strength allows you to fund opportunities that may arise. Should we interpret that as organic and operational improvement opportunities? Or are you perhaps signaling that Northern Star is open to further acquisitions?

No, I think the former, Hugo. We've got plenty on our plate. We're focused on delivering the mill expansion, heavy will be upon us. So plenty on our plate, looking to get the best return for our capital deployed.

Fantastic. So that might be the case, but just worth clarifying. And then last one for me. Has there been any progress in considering either some of the portfolio rationalization you've previously talked to or maybe the ability to bring some of that regional material into the expanded KCGM?

You're talking divestments, sorry, Hugo?

Yes, both sort of divestments or maybe bringing some of the higher-grade mines that you have in the region into the KCGM and displacing some of that low-grade stockpile feed?

Yes. Look, we certainly see that in the medium- to long-term benefit, things like Hercules, Red Hill, et cetera. We'd be pleased to see how that could overall improve the ounce profile for KCGM. I think we want to -- before we run here, really get it commissioned, get it bedded in and delivering growth. I think it was as per Slide 9, those step-ups in production from that new plant from the KCGM sources before we cloud it with some of the regional stuff.

There's still quite a bit of an approval time frame on some of those additional feeds regionally. Rationalization, I think over the years, we certainly are migrating towards these longer life, lower cost, higher-margin production centers, simplifying the business. We've always done it. You'll see subsequent to the half year, we sold our interest in the Central Tanami joint venture for $50 million. You see us regularly doing this over time anyway. So that's probably a natural course of our business.

There are no further questions at this time. I'll now hand back to Mr. Tonkin for closing remarks.

Great. Thank you so much for joining us on the call today, and I appreciate your interest in our company on what is a busy day. Have a good day. Thank you.

This does conclude our conference for today. Thank you for participating. You may now disconnect.

Thank you for standing by, and welcome to the Northern Star December 2025 Quarterly Results Call. [Operator Instructions]. I would now like to hand the conference over to Mr. Stuart Tonkin, Managing Director and CEO. Please go ahead.

Good morning, and thank you for joining us today. With me on the call is the Chief Financial Officer, Ryan Gurner; and Chief Operating Officer, Simon Jessop. As previously announced in the December quarter, gold sold totaled 348,000 ounces at an all-in sustaining cost of AUD 2,937 per ounce.

A number of one-off operational events across our assets resulted in this softer performance and required us to revise FY '26 production and cost guidance. With these events behind us, our team remains firmly focused on driving productivity improvements and strengthening cost discipline to deliver a stronger second half for our shareholders. Our FY '26 outlook provides revised guidance of 1.6 million to 1.7 million ounces of gold sold at an all-in sustaining cost of $2,600 to $2,800 an ounce.

Today, we also provide further detail for production and ACE guidance by production center. In addition, we have updated our capital expenditure forecast across the portfolio. Operational growth capital guidance remains unchanged at $1.14 billion to $1.2 billion. KCGM's growth in capital expenditure in FY '26 consists of several projects designed to prepare the operation for commissioning of the newly expanded mill from FY '27.

And 2 aspects, which I'd like to highlight are the KCGM mill expansion project FY '26 capital expenditure is now expected to be in the range of $640 million to $660 million, and this reflects targeted increases in labor to ensure the commissioning in early FY '27. Also, the KCGM tailings dam activity is ahead of schedule with FY '26 spend now expected to be to be $240 million to $260 million.

While FY '27 forecast spend is lighter at $100 million to $120 million, which this represents approximately 10% reduced cost for the overall tailings dam project. And at Hemi, forecast spend is $165 million to $175 million, reflecting more optimization of engineering and design work there. Northern Star continues to work closely with state and federal regulators, key stakeholders and the broader Pilbara community. With gold price now exceeding AUD 7,000 an ounce, is an outstanding time to be producing and discovering gold in stable low-risk jurisdictions of Western Australia and Alaska.

Our balance sheet remains in a net cash position and as our hedge book decreases, our growing exposure to spot gold, coupled with increasing production, positions us for a very strong increase in cash flows going forward.

I'd now like to hand over to Simon Jessop, our Chief Operating Officer, to discuss our operational highlights.

Thank you, Stu, and good morning. The Calgary production center delivered a lower-than-expected quarter driven by 2 main issues. The first issue was the previously announced partial suspension of mining at our Skogul operation. A new escape way was mined and installed over 9 weeks. -- mining and call ops from mid-December has returned to normal operations.

The second major issue was a lower-than-expected processing outcome at KCGM. The mill underperformed all quarter on throughput volume both rate and run time with the primary crusher failing in December. Since the fifth of January, the crushing circuit has performed in line with normal expectations and we have crushed over 700,000 tonnes in 20 days versus December's full month crushing performance of 600,000 tonnes.

KCGM's total mining performance was an outstanding result with 207,000 ounces mined in the quarter, a new record for the site and a Northern Star Resources ownership. Open pit total material movement was $22 million for the December quarter and $45 million for the first half at the top of the 80 million to 90 million tonne annual guidance range.

The open pit for Q2 mined 163,000 ounces at 1.5 grams per tonne, with Golden Pope's contribution of 117,000 ounces at 1.7 grams per tonne. The KCGM underground operation developed 8.7 kilometers for the quarter and mined 819,000 tonnes of ore. For the first half, the underground ore mined was 1.55 million tonnes above the annualized target of 3 million tonnes per annum.

Due to the processing throughput issues, KCGM finished the quarter end with 1.3 million tonnes at 1.9 grams per tonne and 81,000 ounces of high-grade ore on the ROM pad. CEO performed -- sorry, Karastan performed in line with expectations for the quarter and the half. Let me close on the Calgary production center by again sharing that the KCGM mill expansion continued well over the Christmas, New Year period with a workforce of around 350 people. The project has ramped back up to 800-plus personnel and for the remaining 6 months for final is on construction and transition into commissioning and ramp-up planning. With the project remaining on time for an early FY '27 ramp.

Turning to our yen or production center, both Jundee and Thunderbox experienced a challenging quarter and first half. At Jundee, the previously announced localized structural failure of the crushing circuit works have progressed well. It has taken longer than it, but it has taken longer than anticipated. The coarse ore stockpile tunnel has been excavated, rebuilt and reburried with wrong pad loaders feeding the bin again as normal.

The full completion of the tunnel works is on track to be restored by mid-February. The Jundee team has actioned these works safely and professionally for an extremely large job. The Jundee airstrip is also less than 2 weeks away from its first flight and remains on track for flight savings and less rain interruptions going forward. At Thunderbox, 2 issues prevailed for the quarter. The first one, reduced throughput due to tank issues, which also impacted recovery by 5%.

Less mined ore from Aurelia and the haulage of the high-grade ore to the mill. On the processing impacts, all tanks were back in operation at the quarter end with rectifications planned for H2, which will see us cycle through the 7 tanks. Secondly, on Aurelia, the resource is not performing as modeled in mined in the high-grade areas of the ore body. We have already reduced the mining fleet from 7 trucks to 11 trucks in order to manage the required mining practice changes, improved mining and cost efficiencies.

The Arena open pit strip ratio reduces from here on in. Aurelia has an estimated life of 21 months and will generate 215,000 ounces at 1.4 grams per tonne. Meanwhile, open pit mining at Bank burn ramped up significantly with first ore being stockpiled ahead of milling in H2, providing another ore source close to the Thunderbox mill.

Finally, turning our attention to lower gold sales was impacted by lower head grade of approximately 0.5 to 1 gram per tonne due to a combination of stock dilution and ore loss. Volume of ore was also approximately 30,000 tonnes less due to [ East ] span constraints on scheduled high-grade areas of the ore body.

And we've also lost about 3 days in December due to extremely cold temperatures below 40 degrees Celsius. Early in January, we have seen an improvement in mine grades above 6 grams per tonne and an increase in stope ore volumes. Processing performance for Q2 was very good, with availability averaging 92% year-to-date.

The recovery was 86% during the quarter, 5% higher than expected. Development continued to improve at Pogo with 5.2 kilometers achieved for the quarter, corresponding to a monthly average of 1,731 meters a month. The quarterly performance on Gold sold was impacted by a number of significant events across the portfolio, which has resulted in lowering our annual gold guidance between 1.6 million and 1.7 million ounces.

We are in a much stronger position as we enter the second half of the year. KCGM and South Kalgoorlie operations have returned to normal. Jundee has some outstanding issues that are expected to be resolved during this quarter. and Thunder boxes in improved shape and at Pogo, we are seeing the December improved head growth continue into January. I would now like to pass to Ryan, our Chief Financial Officer, to discuss the financials.

Thanks, Simon. Good morning all. As demonstrated in today's quarterly results, the company remains in a great financial position. Our balance sheet remains strong as set out in Table 4 on Page 10 with cash and bullion of $1.18 billion, and we remain in a net cash position of $293 million at 31 December.

The company has recorded strong cash earnings for the first half of FY '26, which is estimated to be in the range of $1.06 billion to $1.11 billion. A reminder that our dividend policy is based on 20% to 30% of cash earnings. Although Q2 was a challenging quarter, all 3 production centers generated positive net mine cash flow with to capital and exploration fully funded.

Figure 8 on Page 11 sets out the company's cash and bullion movement for the quarter. the company recording $738 million of operating cash flow, which included the semiannual coupon payment on the notes of USD 18 million, approximately $30 million annual insurance premiums. Additionally, during the quarter, the company paid $370 million of income tax being the first half tax payments of $437 million, lower than the first half cash tax guidance.

Major operational growth or capital investments include -- our KCGM open pit development at great Boulder and underground development at Simeon and Mt Charlotte, which will enable us to lead production over the coming years and its Thunderbox operations open pit development at a relevance.

In respect of the KCGM growth project, $180 million was invested during the quarter with major progress in structural and mechanical installation, including SAG and ball mill installation progress. Electrical and piping installation is advancing with final construction fit-outs to follow throughout the second half. The project remains on track for commissioning early FY '27.

And our Hami project, $20 million was spent advancing process plant design, securing long-lead-time items and progressing on nonproprocessing infrastructure. On other financial matters, T-2 group all-in sustaining costs included approximately $20 million of additional costs associated with the disruption events across Jundee cooperations and KCGM during the quarter. Half 1 depreciation and amortization is at the top end of the guided range of $8.75 to $9.75 around and is expected to lower over the second half the forecast increase in production.

Noncash inventory charges for the group in the December quarter are a credit of $93 million, driven by lower grade stockpile build and higher ore stocks at KCGM and stockpile build at Thunderbox. From a tax perspective, the update to second half production, we lowered our second half group cash tax forecast to $230 million to $270 million.

No change to our estimate quantum or timing for landholder duty for the degrade and Saracen transactions. And the company continues to unwind its hedging commitments with 158,000 ounces delivered during the quarter. At 31 December total commitments equaled 1.1 million ounces at an average price just over $3,300 per ounce.

I'll now hand pass back to the moderator for the Q&A session. Thank you.

; [Operator Instructions] Your first question comes from Levi Spry from UBS.

A Stuart Team. A couple of questions, I guess, on the CapEx, KCGM and then [indiscernible]. Just so I understand the increase in CapEx at the mill expansion. Is that about more people? Is it about better people? Or is it about paying more, just so we understand, I guess, where the industry is at?

Yes. Thanks, Liv. Look, it's targeted and deliberate and it's to ensure we meet the commissioning timing of that FY '27. So it's more people. And it's recognizing, I guess, the productivity we've got out of the team that are there today and is not saying they're good or bad. It's just saying when everyone's working in that congested space. We haven't made the progress on some of those things.

So we were targeting around 600 people throughout the build. Simon just spoke to, we retained a [ 3350 ] over Christmas, which would normally be in a shutdown. And then we've also run some back shift his throughout the last 6 months and also we've come up with 800 head count working on that project. So it's targeted delivery. It's at a cost. Obviously, there's an uplift of about $110 million throughout this year, of which a large part of it is being spent in the first half.

So there's a second half kind of tail out of all the electrical and cable runs. But really, it's important that we meet the schedule on time and get that commissioning and get the cash box working.

Yes. Got it. detail. And so could we have a little bit more, I guess, on that guard chart -- so what is actually involved between, I guess, now and activity specifically? And then I guess, what is required to hit 23 million tonnes in 2027?

Yes. So really, the contrary is above that. We talk about in the the bullet points there. is on Page 5 of the quarterly. Obviously, 90% of all the structural steel and until the mechanical installation is complete. So we're back to the timing in electrical cable runs and sort of testing and powering those things up.

Obviously, there's an element of putting it all in place before you do any of that live testing and it's really base the final company of all the pipe work. So -- we're well through the bulk of it, and it's in the right order. Nothing, I guess, is behind, but we're recognizing the work ahead just needs that additional waiver, which we're working with the contractors to source, and we were doing just prior to Christmas.

So December, we started to increase numbers. We continue with what we can call it a skeleton crew, we certainly 350 people throughout the Christmas period. But really, it gets down to that final tie-in all the pipe work, pressure testing the cables, dead testing cables until we're ready to energize things. So yes, it's -- it will be ready to power up in June. The question is whether we want the disruption.

In the back half of June, typically, you won't get the extra gold sold, because it all has to come through the float circuit now through concentrates, et cetera. So we may be bringing up in parallel. But ideally, in July, the mill is running. 23 llion tonnes represents a 27 million tonne per annum plant turned on and then deliberately turned off to do retalking of bolts and just visual inspections on wear rates, et cetera. that's deliberate planned downtime throughout the year, which day es are from 27% to 23%. But when it's running, it will run at the 27 million tonnes per annum. I think that answered part of your question.

Yes, that's good. And just 1 more on Hame. So like what permitting is still a pretty complicated subject for us. Can you just give us a bit more detail around what stages up to now, what happens next?

Yes. So essentially, you got approval is still going through their processes. This financial year, we're expecting there's no real way to fast track those processes with the regulators, and it's prudent that they take the time. In parallel to that, we're working on the water trials and dewatering testing and that's the engagement we're having the traditional owners and the like presently, but all those things are progressing as normal.

It's very -- as you imagine, weather-wise, it's the hot season. So laying pipe and doing works is a bit of a derated activity as we used to do in the Northern Territory. Northern Pilbara gets been offered on the year. So there's some of that activity, we just sensibly laying pipe and getting the balls ready for that throughout these months. But fundamentally, we're working towards the end of this calendar year to be in a position to be putting numbers together for it.

The extra expenditure is about the optimization work, just continually testing the flow sheet and making sure we've got options and that when we put the data into the Fed papers that we've thoroughly thought of all those combinations. And 1 of the things you just keep looking at, you keep finding options and can find better work. So they were using the time wisely in that regard.

Our next question comes from Ben Lyons from Jaden Securities.

Thank you to you, Simon. I just wanted to revisit the underlying reasons behind the recent changes to production, all-in sustaining costs and I guess, also CapEx guidance for consecutive downgrades over the past couple of weeks. And maybe at the same time advocates some greater disclosure from the company as well. So 1 of the reasons, for example, that was given that the production downgrade was the underperformance of funder which has now sort of pitched the 250,000 ounce mining center rather than a 300,000 ounce mining center.

And specifically, those lower grades you're seeing originate from you really open pit, so I was just waiting for the 600-page resource and reserve report. And I just can't find anywhere like a simple tonnage, grade and strip ratio outline for those key ore sources like really like Bannockburn for, et cetera. And the phone goes for like Caridad, Jundee, like the actual ore sources that sit behind these mining centers.

So the comments made by Simon in his introductory remarks are helpful, gives us some of the pieces, but just like to have a really basic outline of the ore sources that sit behind the actual mining centers or at the very least a detailed Investor Day, where we can do some deep dives on these assets as well. I just think that would be helpful to better assess the predictability of this business and the reliability of the forecasting that we received just a bunch of numbers from you guys at the office level, just to go deep on these assets. So am I missing anything in that 600-page resource report that sort of helped with these sort of basic metrics?

No, but I'll take that as a comment about the question, Ben.

Yes. Okay, cool. Okay. The question then you've got tescrutiny on your continuous disclosure obligations. Why wasn't the crush a failure at KCGM immediately disclosed to the market. I would have thought that was a significant event in itself. To paraphrase your response to the ASX, it was basically -- we didn't get the data until the first of January. How regular are you updates from site to the head office in Sobi. I would have thought that you're getting daily updates on simple metrics like production and sales, but -- is it weekly? Is it monthly?

I'm sure it's not quarterly sure, you didn't have to wait until the first of January to now that you're going to downgrade?

Ben, there's a very comprehensive response to an aware letter from ASX. A very simple one-page disclosure around production on the second of January and a very thorough response to the ASX in regards to the query. I think that addresses it.

Yes. Okay. I mean I've read it several times but from my perspective, I don't think it's satisfactory like boleto get real-time data on sales at least weekly or monthly, not quarterly, but happy to go and have another. Thanks.

Your next question comes from Hugo Nicolaci from Goldman Sachs.

Ryan, just one on the updated cost guidance. Look, obviously, good to see the revised cost coming in line with the prior top end considering the gold price increases and royalties associated with that. But if I break that down nominally, you've effectively tightened the range and the midpoint of cost is pretty much unchanged despite highlighting earlier this month that the operational impact. So we're going to have a number of cost impacts. So I guess the question is, what operational and sustaining costs if you'd be able to defer into next year to be able to keep that cost guidance flat?

Yes. Thanks, Hugo. I think the key thing is that the one-offs and the events are behind us, and we know the impacts and effects of those events, they'll finite, they're complete. Obviously, we've disclosed on some of the continuing things are in the week 1 of January that have on us now.

So really, this is the reset and the view of the forecasting of where the sites are operating at and the cost base has allowed us to narrow the guidance range because we've got 6 months ahead, not 12. So that's really where that is at. It's a much stronger second half. If you really look at the what the second half will deliver a significant step up from quarter 3 in production.

You're seeing our realized gold price, it's improving, but it's still a long way off spot because of the hedges, which are which are unwinding rapidly and then obviously delivering into a higher spot. So coupled with increasing production, the gold sales being the denominator or all-in sustaining cost the exposure to that spot by the cash generation over the next 2 quarters and the run rate exiting this financial year for another structural change of Fimiston being turned on, positions the company into a very strong position.

So yes, it is future telling it's forecasting, it's looking at what's in front of us. We would ask people to isolate quarter 3. We have provided a very detailed information around the events that were unforeseen or some are out of our control, some are, we're risk balanced around maintenance events. And ultimately, they have been addressed. The team have done an absolutely fantastic job managing through that period and working on those items.

And that gives us the confidence to place the forecast. On the full year, yes, there's a step-up in cost, there's a step down in production. But when you look at the second half run rate, it's a very, very strong healthy business in that regard. And it can't undo what's happened in the first half, but ultimately, we've got a very confident outlook.

Obviously, taking sort of first half and the apatinimpacts as they were, but dig into that further, I mean, your ACE range is sort of now $4.4 billion to $4.5 billion for the year. It was $4.25 billion to $4.6 billion. you've highlighted $40 an ounce of that or roughly $64 million at the low end is from royalties. So where some of those other cost savings come from though, are sort of looking forward? And should we expect those costs to end up into FY '27

I think it's Ryan, Hugo. I think the costs are there, obviously, in the immediate term, all costs are fixed. So you're right to do the math on the overall, I guess, checks written in the business. What we're saying is as Simon was talking to when he spoke, a lot of these disruption issues that cause production issues are behind us.

We're confident in the grade outlook at Pogo, Jundee, Simon spoke about the high-grade material sitting on the road KCGM, -- you've seen the grade list there. So -- and then also the throughput confidence in the second half. So they all contribute to keeping it aligned and narrowing that that cost range even with those, as you say, expected royalties. We're confident that in that range, '26 to '28 land us with our lower production profile.

Any discretionary spend will be shaft and pushed because it's not only is it dollar millions, but as far as activity and distraction, ensuring that the team have a very clear simplified sort of activity list. That's what we'll do. So does that go push away into FY '27, we'll assess it at the time. We'll assess the balance of risk around pain versus unplanned maintenance, et cetera. there were items that were budgeted that we will just strike off the list that likely will not get spent in the second half.

Yes. Got it. I guess the question was what are those items and how much of that spend. But maybe I'll pick that up later. Next one, just around the upward revision of HamiCapEx. You've called out a more detailed review of engineering design work. So why CapEx this year is $25 million higher, but studies were originally to support an FID by the end of FY '26.

So is that just a bring forward of detailed engineering works that you would have otherwise had to do? Or were those not initially detailed enough for an FID timing as originally planned? And I guess, how should we consider that in the context of, I think, market expectations for Hemy CapEx now sort of $2.5 billion. And should we continue to expect maybe there's a bit of creep there?

Look, I would say reset on the capital, the overall CapEx number, saying if we're spending extra this year, it comes off the overall CapEx number. It's certainly work that's progressing. It would be required, and we would be doing -- but I'd also consider work that may have been spent there would consider, okay, that's redundant, and we replaced a bit new study work that's got an improved operating outcome or an improved flow sheet outcome.

So I think we've got to be a bit careful of saying extra money spent this year comes off the total. There are certainly items that were long lead items invested in spend forward that we'd also say perhaps we'll resell and repurpose and replace with larger simpler kits. So that's -- that's been something we've done with the time. That will all come in a final pit paper on explanations in that regard.

There's not material structural changes to the overall flow sheet. What we've looked at is synergies with the rest of our operations to have common parts, common spares, which wasn't considered when that's a stand-alone asset in a single asset company. We have looked at it through the lens of Fimiston mill expansion. Some items that could replicate, save, on the engineering because you've already done it, but we've actually got to spend for the parts to get common commonality, in sole derisk is in the future running to sort of sister plants.

Your next question comes from Matthew Frydman from MST Financial.

Stuart and a couple of questions from me, please. Maybe firstly, can I take the thrust of Ben Lines' comments and maybe turn it into a question that hopefully we can actually answer on this call. In the release, you say you've reduced CapEx spend at Pogo and Calgary and increased spend at and to support the regional hub strategy. Can I just ask what is the regional hub strategy at Yandal?

Can you summarize it in terms of production ounces, life unit cost and how much capital needs to be spent to deliver it because I'm not really clear on any of those things, and it sounds like maybe there's other analysts that aren't clear either. So that would be appreciated.

Okay, Matt. So there's a 3 million tonne per annum plant in the north called Jundee and there's a 6 million tonne for an implant in the South for Thunderbox. Higher grade ore will go to Jundee, lower grade ore will go to Thunderbox and you'll sit at around 300,000 ounces per annum. Thunderbox will set at around 250,000 ounces per annum. So the hub, which is called Gander will produce at about 550,000 ounces per annum.

That's different to the 600 we set we've articulated that 550 is probably the happy place that, that will be at. You might also late, we Jundee does 250 and Thunderbox does 300. But overall, that Yandell we're saying can operate at around 550, we've got the reserve statements. It's got all the trades and ore sources, panic burns, relies, Thunder, you've got all the data that sits behind that.

That's fundamentally what more than what any company is providing and giving to the materiality of what that asset provides for the group. As the key aspect of those assets, but we're not liking at the moment is the costs. So the aspect of the economies of scale from expanding Thunderbox was to materially improve the all-in sustaining costs as is the growth at Jundee was to keep the costs down.

And you can see the cost we handle in the quarter and the lower ounce profile are very high. So that's in our head to say, what's the overall outlook life. We've got to improve this to ensure that its contributions as it has been for a decade in our business, foundation asset. We can provide more view and color on what those can be. But we're still building new high-grade mines, and the development rates are still contributing towards that.

So pulling out a really up and talking about decimal points of grade of something that's not even providing 1/3 of the feed to Thunderbox for a number of years is immaterial. And I want to focus on that. It's immaterial in the...

I mean I didn't specify earlier and you've answered the question on -- in terms of ounces and life. But as you point out, I think probably the gap in understanding is really more around unit cost expectations and also I guess, the capital required to get there. So I suppose the question that probably the market has is what's the quantum of capital are you going to spend in order to get the cost to a certain point?

And I guess what does that look like? And I suppose we want that out load how do you make those investment decisions when it seems like we don't have a good visibility on what the target is around cost and total quantum of CapEx?

So we provided production and cost guidance on a nice basis in July. That's what we've done for a long time, and that's what we keep doing at agenda. We put in a base plan that's getting into the higher grade at Jundee, but you'll see some of the grade restore. All the commentary that sits around this asset shows the growth of under down South, giving better grade into Thunderbox as well as new Bankinter operation you're going through the stripping at the moment, getting to primary ore. Like the question you're not going to answer on a quarterly call test.

No, that's fine. I guess the theme there is that I appreciate that you guys give 1 year guidance, but clearly, the impact to the market's perception of the company from arguably some of these short-term disappointments from quarter-to-quarter. Potentially that impact is exacerbated because we don't have a multiyear sort of longer-term picture for some of these elements of the business. So obviously, anything you can do over time to just shown a light on that is appreciated. But I'll move on to that line of questioning.

Or you know that. But the point is in KCGM in the half 1, it's really, really changed and it's the mill throughput has really impacted the overall ability to deliver. All the other some of the small parts on a materiality threshold are negligible. The actual.

I agree to you 885 That's why I'm making the point that maybe you only give 1 your guidance is exacerbated.

Please let me finish this answer. Everyone needs to focus on that asset KCGM and there's 82,000 ounces sitting on the room of high-grade ore ready to put through that plant. And the plant -- the new expanded plant will be commissioned in less than 6 months' time. So if everyone wants to weave into smaller items across all the assets, we recognize that it was a poor quarter. We understand the elements that contributed to that. There were meaning and we understand what we've done to rectify it and what the outlook is going forward.

I pick up the frustration from the questions, and I'll pick up the frustration from investors or from analysts, who can't model this. Quarter 2 is behind us, and the second half outlook is strong, and we will work very hard to deliver that and where we position ourselves into FY '27 in an excellent position. So I just want to reinforce we're getting into minutia, which is behind us and doesn't matter on a materiality threshold.

So think about the things that make KCGM is a key asset -- that's where the focus and effort is today. It's not on the satellite small life short things that are also generating significant cash flow that are actually contributed towards spending the capital at our long life by margin assets.

Yes. apologize for cutting you off to you. I mean I would say that the Andhubis still going to be 1/3 of your business. So I'm not sure that characterized as Manisha, but anyway, thank you for your response.

The second question is just on the KCGM new expansion, I guess, increases to the capital guidance there. you talked through in some detail around where that's going and why it's important to, I guess, the schedule -- is there a risk there that, I guess, throwing more money and people doesn't really solve the productivity issue you're having? I mean you talked about how it is a fairly condensed space there that your teams are working in I guess what the question is why are you confident that spending more is the right approach versus just taking longer to complete the project?

So it doesn't solve the productivity issue. That's why you add heads. -- add head count because you can't can't achieve ever 600 people, so it's 800 at it. That's the answer of productivity and you're paying more to get the same thing done. That's why there's $110 million extra spend in this year to deliver that -- the most important part is the plant on getting all through it and step changing the asset's cost base and its revenue.

That time is of the essence with [ Cosan ], not capital sadly, at this point. It's not sensitive to capital. We don't likely spend $110 million, unnecessarily. We want to see this plant operating and starting to contribute.

Just add a little bit to that. So during the next -- really, the next 4 months is where we've got the peak banning. So we've ramped up as [ she ] said, above what was originally the plan and that sort of progression started during Q2 in terms of accelerating the work. We've got still many work fronts at the moment.

So we still have that opportunity to put those people in there 3, 4 months from now, those work fronts start to wind down. And we're very, very focused on the critical path, which is Stage 1, which is first ore into the new mill. So while we still got the opportunity, we've taken that and the project team has to put the extra people in there get the work actually completed.

And that's the picture right now, which gives us the ability to remain on schedule for FY '27, ready to go in sort of June. So if we didn't put those extra then, the work front start to dry up, and then it genuinely will be delayed. So the project is in really good shape. It's focused on Stage 1 and that is first ore into the mill. The Stage 2 is moving gig back down to KCGM. That can happen in the months after we're milling ore.

Your next question comes from Daniel Morgan from Barrenjoey.

So obviously, a key theme of the call has been throwing a lot more bodies at the project to keep it on schedule. I understand that makes sense given the gold price and the project you're trying to keep on schedule. But -- do you still expect that July turn on? I mean is the gun chart, I imagine the critical path, the turn on date, is it not shifting back? Is it not wise given recent guidance and market disclosures is not wise to maybe start to push market expectations of the schedule of the turn on back? Or is this the expectation that this extra budget will keep the schedule to July?

It's quarter 1. My expectation is early quarter 1, sales there will be parallel running up at the plant. This isn't about market expectations. This is about our disclosures had a 3-year build on time to the budget we're saying and overrun on that expenditure because we're growing more labor at it. We're not here trying to gain this, Dan. We're here explaining, where we're at into a 3-year build.

And as Simon has got the confidence in discussing as well, we're very, very pleased with the progress they've made. And we're working very closely the contract that it's constructing it and looking for any opportunity to get this done, not only on time but earlier. And part of that combined solution is around adding head count. And we don't just add it so they're standing around holding stop signs. There are people there doing productive work.

That's contributing towards that deadline. So yes, that's what we're working towards. It's pretty exciting. I think the team that got around the plant at bigger than dealers saw a massive step change year-on-year, if you went there again today, you'd say, well, why can't you turn it on now? That's what you visually see -- and it's no different than you're building a house, wait for your carpets and your fly screens. All the cabling, all the tiling, all the final elements of that. It looks like it's been finished, and it looks like it's sitting there doing nothing, but it's that fine or final finishing, we're sure that when we get it turned on, the quality is met and the work is done so that we don't have to bring it down or we don't have to have those lessons that we learned out of the Thunderbox expansion.

We endured 12 months of ups and downs and rectifying some of those things. We'd like to see all that addressed prior to turning and commissioning this on. So that's the way it's underway for the second half.

And I guess, obviously, there's a lot of focus on the call and obviously, concern about various aspects. But maybe pivoting and changing tack a little bit like just over the last 6 months or so, what is changing in the business that you can see that from a very positive sense, like what is something you'd like to invest is where there's been a change a foot or something that's getting better or be it exploration, be it a site? What is changing in the business in a positive sense that you could highlight to the market?

Yes. I mean I'd recognize the underperformance in share price against the peers, global majors, we acknowledge that. We acknowledge that there's reflection on short-term production misses -- cost misses, and we've been very clear on the events that have contributed to that and what we've done to rectify that.

Just look at the run rate of second half in its own right, very, very strong uplift in production. Look at the reducing hedge book and realized gold price that we're growing the exposure to spot. And the step change of the business as a KCGM mill expansion turns on in FY '27 and the uplift, again, step change in production profile for the group. They are the things that are psychoses to us that the opportunity for investors now to get any yet positioned, that's the confidence in the outlook.

And I see, to your point, people are focused on here and our concerns, they're looking at relativities. That creates the opportunity to understand the long-term value creation that all the stars doing.

Your next question comes from Milan Tomic from JPMorgan.

It's -- just a question on the permitting side of things. Can you provide maybe a little bit more detail as to how that process is progressing? Has there been any issues specific issues that are being flagged by the indigenous and Asian groups in that area? Or yes, just wondering, if you can give a bit more color as to any concerns that might have been raised so far?

No, no major concerns there. Milan. It's really the dewatering trial is something we've got to commence, which will likely be at the start of quarter 4. Ideally, we would have done -- started that in quarter 2. but there was a delay in getting all that infrastructure in place through the hot season.

So once that's in place, and we've got a plan that's acceptable, we'll commence that trial. It takes about 3 months, and that feedback loop goes into our Fiesta license for dewatering of the pits preproduction. So that's probably something that has slipped -- it doesn't affect the overall state and federal EPA approval licenses, which are continuing.

But ultimately, that's probably the operational part that we would have liked to have seen commenced presummer. And that's going to start March, April, likely we start for the modified scheme that we've negotiated. We're negotiating with traditional owners there.

Yes. And just in terms of the work that you're doing on optimization, any major changes regarding mine plan sequencing, et cetera, that you could share that's kind of been different from how that project was initially envisaged to be?

Yes, the scheduling. So what we're going to look at is First Gold Pool and that deadline, even though if there's a delayed timing of starting to understand okay, what impacts through to that. But the actual flow sheet generally, we've looked at lots of different scenarios and options and defaulted back to what that primary flow she is with the high-pressure grinding rolls at the start and to the SAG mills is still sound.

Resizing some of the gear mills, et cetera, is probably something we've done, the ability to expand later on a more simplified plant. But all the auto class and late already in trying to be built and long-lead items like that are constructed. So that's all sound. Mining sequence, again, just around water management, our borrower kits and getting that prepared. That's -- we've just got options and scenarios there as opposed to the 1 plan that previous owners had -- we just got a number of scenarios there that could go different paths to get to the same results. So that's just what the team is doing there, while the approvals are underway, iterating tera is what they do best as the engineers.

And maybe if I can just squeeze 1 more in on Jundee. To get it to 300,000 ounces, you have to get quite a sizable uptick in the grades compared to the last couple of quarters at least. Can you maybe just shed a bit of light at how do you -- how are you getting that increase in grades? Are you moving into a high grade part of the ore body? Or is there something else that we should be considering there?

[

A mix of primarily the throughput is not Jundee. So yes, the average grade delivered to the plant needs to be there. It's been there before. We've certainly got low pockets that are there different grades and different mining sequences. We've just added a base plant, which allows us to go back up to the upper levels, regional high-grade areas and take those high-grade zones that were sterilized because they just open voids. There was no past in the mine in its history, 30 years.

It's never had any at factory, but we've got that base plant installed and starting to fill those voids. We can go back and take those high-grade pillars the upper levels. So there's areas like that, new Cook Griffin mining zones producing better grade. So all of those things contribute, but overall, it is a grade focus rather than a throughput of focus.

Your next question comes from Adam Baker from Macquarie.

Just 1 follow-up for me. Just on Hanmi. I met you noted that in May 2016, you're going to have the optimized resource and reserves. I'm just wondering is there anything that we could be saying to see a quantum change in the resources or the reserves noting changes like gold cost assumptions, et cetera. And likewise, for reserves around cutoff grade, et cetera. With your work integrating this into the Northern Star reserve and resources?

Yes. Thanks, Adam. Look, I won't preempt things with R&R, there's still a fair bit of work to occur in the coming months leading into that, but we're basically lease heavy Northstar view of radar with the group's R&R. I would say Hemi had a high gold price assumption in what was previously released. So we'll try and align with the group overall, where we set those gold prices for resources and reserves.

They're almost irrelevant in regard to where the current spot price is and watching what peers are doing in gold price assumptions around resource and reserves. But it does in turn reflect back to cutoff grades and how the overall picture valued and can you actually merge mold our pits together, take our saddles and make a bigger or big larger overall lower-grade resource economic.

That's what we've got to consider. But I would just say that we've probably got a stricter more scrutinized view around what's in and what's out. So if anything, a more robust scruitny your eyes on that resource is more likely than material growth. If you think about the drilling and the data that's occurring there, all we've really done recently is redirect some drills to do some treating. We haven't done any real growth drilling since we're taking control of that heavy region.

Thank you our next question comes from Mitch Ryan from Jefferies.

Stu, and team, you made a couple of comments with regards to Hemi. You called it a sister plant to KCGM, and you talked about taking the opportunity to resize mills. Can you -- does that potentially mean a change in the scope of mill size relative to previously disclosed on numbers? Can you -- can you help us understand that?

Correct. Ideally, things like the crusher, things like the mills ideally are identical to what we have at Fimiston and that's been currently our thinking -- there's already some mills purchased they're already sitting in a shared package stuff in or headline let's say the unloaded off the truck.

I look at those and say they'll do the job of a 10 million tonne per annum plant to get to a 15 million tonne per annum plant, I mean a third one. What I consider instead of doing that, having 2 large mills today that match Fimiston answers usually, yes. So be the sort of considerations we're doing to say, irrespective of earnings and hardware that's sitting there in a share, would we start again in, say, 2 large mills that match Fimiston, plus the logic of that.

In the scheme of reselling these things. There's options that are there in a scheme of redundant expenditure, you can repeat the costs because you haven't installed them and they're ready to freight. That's the type of thinking that if you're in a hurry to build the mill, they would have got built and then when you want to expand, you add a new mill. When we look at that now with the time, so well, let's just not go build something because we have to pass. Let's consider what we can do, if we had a clean sheet that's the example.

One is the crushing circuit, absolutely take the replicate design from Fimiston and say, is that something you could install here that's oversized matches parts, et cetera, as opposed to going through the -- something that's been designed specific for the throughput rate of hemi we go to something that is this is a plant to Fimiston -- that means if we have issues like Simon had in December.

At KCGM, we could be fast tracking the knowledge and the skills and the path across the business every 3 or 4 years would happen at 1 of those large crushing years.

Thank you -- there are no further questions at this time. I'll now hand back to Mr. Tonkin for closing remarks.

All right. Thank you for joining us on the call today. And I appreciate the interest and it's been a busy day for everyone, but looking forward to a strong second half and growing from here. Appreciate it. Thank you --

That does conclude our conference for today. Thank you for participating. You may now disconnect.

Thank you for standing by, and welcome to the Northern Star operational update. [Operator Instructions]

I would now like to hand the conference over to Stuart Tonkin, Managing Director and CEO. Please go ahead.

Good morning, and thanks for joining us on the call. With me today is our Chief Financial Officer, Ryan Gurner; and Chief Operating Officer, Simon Jessop.

On Friday, we provided an operational update on the back of a soft December quarter. And subsequently, we have revised down our annual production guidance to now 1.6 million to 1.7 million ounces from 1.7 million to 1.85 million ounces. The full year reduction has been necessary due to a number of isolated operational events late in the December quarter, which have largely now been rectified, and Simon will talk to these shortly. This positions the group to deliver second half production of 871,000 to 971,000 ounces.

We will be providing December quarter costs with the quarterly results published on Thursday, 22nd of January as well as any outlook to the full year cost guidance.

I'd like to reinforce our confidence in the underlying asset portfolio and thank our teams who worked to address the recent operational impacts promptly and safely.

Our long-term value creation strategy is sound, and we're excited at the prospects of commissioning the new Fimiston plant in 6 months' time, which will deliver a step-change in production and costs for the business.

I appreciate investors' understanding of the near-term volatility of a growing business, and we will continue to prudently manage risks and liberate opportunities for the company. We remain in a strong financial position currently with net cash and are comfortably delivering into our reducing hedge commitments.

We continue investing capital for the long term to increase production whilst improving cost profile to generate superior returns from our assets.

I'd now like to hand to Simon to cover the operations. Thank you.

Thank you, Stu. The Kalgoorlie Production Centre delivered a lower-than-expected quarter driven by 2 main issues. The first issue was the previously announced partial suspension of mining at our South Kalgoorlie operation. Post a significant rainfall event in October, a pit wall slip occurred, impeding the escapeway into the mine. A new escapeway was mined and installed over 9 weeks with normal mining resuming around mid-December. Kal Ops has since returned back to normal operations with a total sales impact of 10,000 ounces as previously disclosed.

The second main major issue was a lower-than-expected processing outcome at KCGM. The mill underperformed all quarter on throughput, volume, both run rate and time. The lack of throughput was primarily due to the Fimiston primary crusher faults impacting plant stability. This resulted in a shortfall of around 650,000 tonnes of throughput over Q2.

Due to the ongoing impacts from the crusher not performing, a major Q3 shutdown was brought forward into Q2 with multiple elements changed. This shutdown took over a week. And unfortunately, the crusher failed 12 hours later, resulting in another 2 weeks of downtime over the Christmas period up until Monday, the 5th of January, when recommissioning has started.

The primary crusher replacement similar to current works last occurred in February 2021 with a previous failure in August 2017. Due to the Christmas break, sourcing specialist labor to rebuild the unplanned crusher failure took longer than expected. This crusher is required as part of the expanded mill circuit.

KCGM mining performance was similar to that achieved in the first quarter. Open pit total material movement was 22 million tonnes for the December quarter and 45 million tonnes for the first half at the top of the 80 million to 90 million tonne annual guidance range. The open pit mined in Q2 alone unreconciled approximately 150,000 ounces with Golden Pike's contribution 110,000 ounces.

The KCGM underground operation developed 8.6 kilometers for the quarter and mined 780,000 tonnes of ore at an annualized run rate of 3 million tonnes per annum for unreconciled approximately 42,000 ounces in the quarter.

KCGM total mining achieved approximately 190,000 ounces mined for Q2 and due to processing throughput issues, finished the quarter end with 1.1 million tonnes at 1.9 grams per tonne for approximately 70,000 ounces on the ROM pad. CDO performed in line with expectations for the quarter and the half.

Let me close on the Kalgoorlie Production Centre by sharing that the KCGM mill expansion continued well over the Christmas period with a workforce of around 300 people working on the project. The project will ramp back up to 800-plus personnel working on the mill in January, and it remains on time for an early FY '27 ramp-up.

Turning to our Yandal Production Centre. Both Jundee and Thunderbox experienced a challenging quarter and first half. At Jundee, the previously announced localized structural failure of the crushing circuit works have progressed well, but it has taken longer than anticipated. The coarse stockpile tunnel has been all excavated with all materials on site to finalize the repairs. The impact to the quarter was around 170,000 tonnes of processing at 40 to 50 tonnes per hour throughput or around 15,000 ounces.

The crushing circuit is set to be restored to normal operations around mid-February. The Jundee team has action these worked safely and professionally for an extremely large job. The Jundee strip was also being upgraded over Q2, which had already commenced before the crushing circuit failure occurred, compounding the Jundee results with reduced operational time. The air strip project will be completed in late January with flight savings and less rain interruptions from the site going forward.

At Thunderbox, 2 issues prevailed for the quarter: one, reduced throughput due to tank issues, which also impacted recovery by 5%. Secondly, less mine grade from Orelia and the haulage of the high-grade ore to the mill. On processing impacts, all tanks were back in operation at quarter end with rectifications planned for H2, which will cycle through 7 tanks.

Secondly, on Orelia, the resource is not performing as modeled and mined in the high-grade areas of the ore body. We've already reduced the mining fleet from 17 trucks to 11 trucks in order to manage the required mining practice changes, improved mining and cost efficiencies and the fact that the strip ratio reduces from here on in. Orelia has an estimated life of around 21 months and will generate 215,000 ounces at 1.4 grams per tonne on the current forecast.

Meanwhile, open pit mining at Bannockburn ramped up significantly with first ore being stockpiled ahead of milling in H2, providing another ore source closer to the Thunderbox mill.

Finally, turning our attention to Pogo. At Pogo, the lower gold sales was impacted by lower head grade of approximately 0.5 to 1 gram per tonne due to a combination of stope dilution and ore loss. Volume of ore was also approximately 30,000 tonnes less due to some East Deeps fan constraints on scheduled high-grade ore and about 3 days lost in December due to extreme cold temperatures below minus 40 degrees Celsius.

Processing performance was very good at Pogo with availability averaging 92% year-to-date. Recovery was also 85.8% during the quarter, 5% higher than expected.

Development continued to improve at Pogo with 5.2 kilometers achieved for the quarter, corresponding to an average monthly run rate of 1,733 meters per month, above the 1,500-meter target.

The quarterly performance on gold sale was impacted by a number of significant events across the portfolio, which has resulted in lowering our annual guidance between 1.6 million and 1.7 million ounces. We are in a stronger position as we enter the second half of the year. KCGM and SKO have returned to normal operations. Jundee has some outstanding issues that are expected to be resolved during the quarter. Thunderbox is in improved shape, and we continue to work through the various factors that may be contributing to the lower-than-expected grade of Pogo.

I would now like to pass on to Ryan, our Chief Financial Officer, to discuss the financials.

Thanks, Simon. Notwithstanding the challenging operational quarter, the company remains in a great financial position entering the second half of financial year '26. At 31 December, the company's preliminary cash and bullion holdings are expected to be approximately $1.17 billion. And with the company's $1.5 billion credit facilities undrawn, total liquidity is approximately $2.7 billion.

Q2 will realize a negative free cash flow result driven primarily by the softer production outcome and a $250 million tax balancing payment for the FY '25 year, which was made during the December quarter as previously guided. Other cash outflows include annual insurance premiums and the semiannual coupon payment on the notes.

Despite the lower-than-planned sales during the quarter, the company comfortably delivered its hedging commitments as planned. The second half of FY '26, there are 330,000 ounces committed, which is comfortably within the forecast production outlook.

Finally, as outlined in the operational update, cost guidance at the group and production center level will be revised at the results call later this month following finalization of the quarterly results due to all-in sustaining cost per ounce will be higher than Q1 due to lower production and higher sustaining capital invested during the quarter. Year-to-date sustaining capital spend is tracking to plan.

I will now hand pass back to Ashley for the Q&A session. Thank you.

[Operator Instructions] Your first question today comes from Daniel Morgan with Barrenjoey.

First question is just what is embedded in guidance for the remainder of the year for the Super Pit mill throughput? And what are your thoughts about the risks around achieving that?

Yes. Thanks, Dan. Look, we'll give the detailed asset-by-asset breakdowns, particularly for the second half at the quarterly. So that will be full transparency on the breakdown of each of those. I think risk really on KCGM is that mill throughput. Simon has spoken to the crushing circuit is now commissioned and rerunning from that shut. There's obviously a lag of a couple of weeks of gold in circuit through there. But pleasingly, the open pit and underground mining volumes have been maintained and at high levels such that, that material is stockpiled adjacent to the existing mill.

So for half 2, the risk of mining is reduced because the stockpile is there, it comes back to throughput through the existing plant that we are obviously persevering with until the middle of this calendar year when we commissioned the new plant. So it's really the 6 months remaining to get that going.

That crushing circuit is part of the expanded plan circuit. So that's why I got extra retention investment and a birthday to get that upgraded. So yes, they're the risk, but we'll give asset-by-asset breakdown on that in the quarterly.

And it sounds like if I got this accurate, you've built I mean, the mining productivity has been fine during the quarter. And so you build the stockpile, if I got the numbers right, 1.1 million tonnes at 1.9 grams for 70,000 ounces on the ROM pad. I imagine that you'll shuffle that through during the March quarter.

Yes. Not necessarily, Dan. We'll make sure we keep it being because you don't want to give a spike of gold and have a dip on recovery. So we just want to make sure that we are blending accurately and get the best outcome for the long term. So yes, confident it will come through in the second half. Don't necessarily need to flood it in this quarter, and that's why we talk about the full year guidance, not quarter-by-quarter.

Yes, sure. That makes sense. And just the Pogo dilution, is there any reason to be for any longer-term concern? Or is this a short-term issue. Pogo's obviously been operating very well for quite a period of time. And just wondering how far this dilution travels do you think.

Yes. Thanks, Daniel. Simon. Look, it is -- we did have a challenging quarter on dilution mainly in the first 2 months of the quarter. December, we certainly saw grade come back to 6 grams in that particular month. And really, late in December is when we saw much better results from Pogo.

So we've still got more work to do around stoping. It is ongoing at that particular operation. But we don't see that as a long-term impact. It was certainly lower than we had planned. The reserve grade is about 7.2 grams. We were sort of planning on about 6.5 grams for the quarter with a better second half in front of us from just what the schedule shows, but we certainly copped dilution than we normally planned for Pogo during Q2.

And just last question, Jundee, the materials handling system. Did you outline when you expect that to be fixed in the quarter? Is that January this quarter? Or is it -- is there still some outstanding items that have risk to that time line?

Yes, Daniel, the coarse ore stockpile fix is well progressed. We've got all the materials on site. We've excavated the whole area, and we're starting to form up some concrete plants now, and it should be rectified by mid-February at the latest, and we cut back when we do the mill shutdown. So certainly, well in hand understood. We're past the worst of it. Now it's just rebuilding it, and it's back to normal materials handling for that asset.

So the other part of that, Dan, is the current format is a bit of rehandle and redigging to move -- use the e-feeder. So the throughput is being managed. But getting back to that normal efficient cone through the feeders through that coarse ore stockpile, which has currently been bypassed, is where we'd like to be by absolutely midway through this quarter.

Your next question comes from David Radclyffe with Global Mining Research.

My question is a little bit more high level. So given a number of the outages reported are maintenance related, could you perhaps give us some more color, I guess, on your approach to proactive maintenance if this has changed and whether these events point to maybe an increased focus is required across the group? Or would you just characterize this as just a period where all the unplanned events just happened to come at one time.

Yes. Thanks, David. And it's an interesting approach. I guess we're always trying to manage and manage the sustaining capital balance to capital investment and returns. So if you kind of appreciate mines like Fimiston, multi, multi-decades in operation, Jundee just turned 30. Kanowna Belle just turned 30. If you were driving a 30-year-old vehicle around the roads, there's a balance here between breakdown maintenance and sustaining maintenance.

This is the eternal balance. You can see the hundreds of millions dollars we're spending in sustaining capital. We're not under doing it, but we're equally trying to be -- to not overdo expenditure in this regard. So it is a balance. With the knowledge of Fimiston upgraded plant imminently coming into commissioning, it was always a risk and a concern around the overall Fimiston plant, which motivated us 2.5 years ago to commit to the expansion fundamentally. So the crushing circuit is part of the new circuit, hence, why we do a great job on that, but they are just examples.

All the other elements are probably twice their designed life. Obviously, built this factors of safety at the time. And we've often done audits assessed and upgraded as we've gone annually. It's just around balancing that because the alternative is things shut down and you spend hundreds of millions of dollars on a brand-new piece of capital kit. We have not done that at these assets over a decade.

We have looked at resources, reserves, mine lives and appropriately invested in capital into the assets to match the tenure of the assets, and they're all different. There's not a standard across everything. There's no point putting 10 years investment into an asset that has 2-year mine life. Equally, something like Fimiston, it's worth doing it right upfront because you know you've got multi-decades in front of us.

Your next question comes from Levi Spry with UBS.

Just a question on the second half guidance. Can you just talk us through the assumptions behind the high end there? Maybe it's a process question. Or how would you get to a million ounces in the second half?

Look, we're going to give you an asset by asset breakdown in the quarterly. It's only 2.5 weeks away, Levi. So I'll leave that today is really just events to discuss the quarter that's been. What I'd say is we've adequately modeled and see the outlook on the assets ahead. The mining risk has been reduced and the mining volumes are done. It's really around this throughput, and that's probably been the primary issue across the quarter has been around throughput and/or the recoveries grade through those elements, and we believe we've got really good confidence in the outlook for half 2.

So the biggest lever really is KCGM. And hence, where Simon highlights in his spiel around the mining volumes, Golden Pike volumes stockpiled, the underground progress on development and stope tonnes at 3 million tonne per annum rate means that the ounces are being moved up the chain and then it's really around that throughput to deliver that.

Yes. Okay. And then obviously, it's too early talk about FY '27, but the big value driver here is the plant. So can you just expand a little bit more on the commissioning in the first quarter?

Yes. So we've said and things are progressing. The quality of the build is excellent. Simon spoke about there's still people working through Christmas, 300-odd back to the full team of nearly 800 people over that plant this month. So we're very impressed with the progress. To be able to start that commissioning, we said early in FY '27. So talking July '27, not risk any impacts in June in this financial year. And we will provide guidance as we would midyear at -- usually, at the quarterly in July.

So yes, FY '27 has to be with the comfort around the mining, the processing throughput, which was already tapered. It's 23 million tonnes for the FY '27 through that new plant, and that's already designed around lower uptime. So it's still a 27 million tonne per annum plant, but it's designed down planned downtime to commission. And that's probably the biggest lever. All the rest of the assets we've already talked to Thunderbox being a bit lighter, but the rest of the assets pre steady state throughout FY '27.

And maybe just one quick last one for Ryan. So you mentioned the cash tax catch-up payment. What else is outstanding there? Is it just the gray stamp duty? And when does that fall?

Yes, that's right, Levi. When does it fall? Hard question. Could be this financial year. Might tip into early next financial year, but yes, it's a hard one to give absolute timing. I'm forecasting that it will probably fall in this financial year, but we have to wait and see.

The next question comes from Adam Baker with Macquarie.

Just firstly, on costs. I know you're still working on optimizing the cost guidance on the 22nd of January. But do you have a general sense as to where the new all-in sustaining cost guidance will be sitting versus the current $2,300 to $2,700? Just trying to take this one through, just given the first quarter was around $2,522. You've indicated the second quarter is going to be simply higher. But I'm just wondering if the second half of FY '26 will really be that bad given the strong projected uplift in production.

Yes. Thanks, Adam. I think Ryan's comments, you talked we'd be revising. I think we're reviewing that now. So we'll report the quarter results in 2.5 weeks, and we're modeling and considering what the second half looks like.

It's one thing we're pleased with that is -- there's multiple things we're pleased with, but it is something we're pleased with in the cost control even in a low ounce quarter, the ability to remove discretionary spend and manage those dollar millions closely. And then obviously, the weight of the second half or the denominator of the second half, it's probably got the most lever on what the base could be. But we have ability perhaps to even stand at those current cost guides rails. We need to do the multi-manager the work. We'll update the market accordingly in 2.5 weeks, and it will be based on that modeling of the outlook and those assumptions. But it doesn't necessarily mean it needs to change, but we will have -- it gets more challenging given the first half has delivered.

Makes sense. And at KCGM, mill grade of 1.6 grams, slight uplift there versus the year-to-date around 1.3 to 1.4 grams. Just wondering, was there any preference to high-grade material this quarter offset the crusher failure? Or was that just a natural grade variation coming through this quarter?

Yes. Adam, it's Simon here. The grade was always going to lift Q2 on, and we've seen the start of that lifting. With the stockpile ending with that sort of 1.1 million tonnes at high 1.9-ish grams per tonne, we finished with a huge stockpile of very high grade. So -- but that will continue to flow through. So Golden Pike mining is going extremely well ahead of plan. So very happy with that piece. And you'll see better grades going forward because, a, we've got the stockpile. And secondly, the volumes keep coming out of Golden Pike North.

So really happy position where mining is sitting at the moment, and both the underground and the open pit bang on volumes of where we need to be or if not above, at the halfway point of the year. So it's really just the grade coming later in the quarter. We put the best grade we could through. But when we had the crush go down, it's been juggling around material movement and grade available to be fed through for the back of December.

The next question comes from Mitch Ryan with Jefferies.

Just wanted to have you elaborate, please, on just the grade dilution in Pogo. Just trying to understand the factors that led to that. Was it ground conditions? Was it blasting practices? Can you help us understand what it was?

Yes, Mitch, it's a combination of different areas that we're mining in plus the variability that we get between some stopes. We might get 25% dilution. Other stopes you might get 70% or 80% dilution. We plan on 50%, and we're pretty close to that on average. We had a couple of areas in the first 2 months, as I mentioned, in the quarter 2, where we got excessive dilution, more than we had planned for in those particular areas. So really, that's what dragged down the average grade for the quarter.

The other impact is some volume variance for quarter -- for Pogo, sorry. And yes, that was really down to December. It's very, very cold over there at the moment. We had to close up the mine on and off for about 3 days lost production during the quarter just when grade was starting to kick in. So that didn't help our final situation there.

[Operator Instructions] Your next question comes from Hugo Nicolaci with Goldman Sachs.

Look, first one on the production outlook, and apologies for later the point. I know you said you'll give that split of guidance in a few weeks. But given that you already put out the updated guidance for the rest of the year at the group level to market, is there a way maybe we can talk through that getting specifics, just what gives you confidence in achieving that range for the second half in terms of what to be factored into further operational disruptions. We've seen a lot of weather impacts previously in March quarters. Is there a disruption for that and sort of the scope of the variability at KCGM? If you could give us some more color there, please?

Thanks, Hugo. I think it's the emission of these events that are finite discrete one-off and rectified. So our normal go-forward business, the performance in that half 2 guidance and the way the assets are performing, we're confident with that's not outside of the plan.

We're calling out the anomaly of quarter 2. I mean quarter 1 was on largely on plan. It was building out through quarter 2, 3, 4. We've had a setback in quarter 2, and that is due to the descriptions we have given, and they are largely rectified behind us and finite not continuing. And that's, if anything, gives us the confidence of the outlook on half 2. So we'll give that asset breakdown.

As we said, at the quarterly it is still largely hinged on throughput at KCGM. And why we have greater confidence is what Simon speaks about is that the large stockpile of high-grade material sitting on the ROM because Golden Pike is performing and the volumes are there, plus the underground grade that's been delivered and stockpiled and then the backup of the overall stockpile when the Fimiston mill turns on and [ sprint ] capacity increases there, that asset really hinges the group.

So yes, the culmination of multiple sort of smaller setbacks in every asset could all be managed, all occurring at once means that the quarter we delivered is what we delivered. But the absence of those, the omission of those is really what gives us the outlook going forward and how we've managed those risks.

Great. Just so just to clarify on any further throughput issues at KCGM, that should still be 500,000 ounces plus for the full year then?

That's the view. And look, that crusher fundamentally, yes, that's the main crusher for the main cone for the main feed. So it will be part of -- we're building a new one, but the 2 of them will be there for the new expanded plant, but the works to not just link that along, bringing that shutdown earlier and refurbishing every element of the wear packages and the motor and [ pins ] of things on that is to make sure that is not a setback on the new expanded plant.

So that is -- that's not an overall element -- an ongoing element of the current plants over the next 6 months. And Simon spoke to, it's been years since that thing has had issues. And I think it's 2017 and then '21. So it's rare. Just happened to happen to be in our quarter 2, very unfortunately.

Got it. That's helpful. And then just coming back to the cost piece as well and obviously moving some of these costs around and these sorts of work, and I appreciate again, you'll give the cost guidance in a couple of weeks. But I guess when I think about it from a dollar million perspective, have these disruptions meant that you will be spending more in aggregate in terms of sustaining capital this year. And so maybe there's a bit of upside risk to that $750 million for the year number that you previously talked to?

No. We think the dollar millions would be pretty close. There's a couple obviously -- we're saying 5s and 10s related to things like the Jundee stockpile or some of these things that have just been the one-offs to get this quick rapid response and uptime on as the crusher works. But overall, ability to knock on a deferral or delay other expenditure within that. We think the full dollar millions is still well in hand.

Now does that mean we're at the higher end of the current cost band or slightly over? We'll provide that with assessment of modeling with quarterly.

Got it. So yes, just to confirm. And so basically, it's really more denominator impact with a little bit here and there on the spending piece.

We think so. Yes.

There are no further questions at this time. I'll now hand back to Stuart Tonkin for closing remarks.

Okay. Thank you so much for joining us on the call today. We will speak again at the quarterly in a couple of weeks' time. And I think we're still buoyed by the outlook of '26 and a reset, and we're pleased with where we're positioned to date. So thanks again. We'll speak to you in a couple of weeks.

Thank you for standing by, and welcome to the Northern Star September 2025 Quarterly Results Call. [Operator Instructions] I would now like to hand the conference over to Mr. Stuart Tonkin, Managing Director and CEO. Please go ahead.

Good morning, and thank you for joining us today. With me on the call is our Chief Financial Officer, Ryan Gurner; and our Chief Operating Officer, Simon Jessop.

As we confirmed this morning, for the September quarter, we sold 381,000 ounces of gold at an all-in sustaining cost of AUD 2,522 an ounce. The quarter delivered a mixed performance across the portfolio, but our Kalgoorlie production hub performed very well, led by KCGM, where we maintained elevated production and development rates. Also pleasingly, costs for the quarter were better than forecast, reflecting our efforts on containing spending and continued focus on capital discipline. Despite the mixed production results for the quarter, we remain well positioned to deliver our full year guidance of 1.7 million to 1.8 million ounces of gold sold at an all-in sustaining cost of AUD 2,300 to AUD 2,700 an ounce.

The KCGM mill expansion remains on track for commissioning in early FY '27 and significant progress is underway for this exciting step change to the operation. This week, we received ministerial approval from the WA government for the Fimiston South project and associated infrastructure, which supports higher future throughput and long-term cost efficiency at KCGM to deliver sustainable, high-margin ounces. We've also seen a consistent uplift in production rates from both the open pit and underground operations at KCGM, which Simon will talk to you shortly. With consistent primary ore feed and the significant 3 million ounces of stockpiles ready for processing, we're on track to maximize mill utilization and deliver on our production growth targets there.

The group underlying free cash flow of AUD 14 million reflected investment outflows relating to the KCGM mill expansion project, returns to shareholders of AUD 416 million in dividends and AUD 67 million in tax installments. Our investment-grade balance sheet remains strong with a net cash position. And as the KCGM mill expansion is in the final build year, we're poised for increased production and lowering spending. Whilst our hedge delivery schedule also declines and provides greater leverage to spot gold prices. This outlook is very favorable towards growing cash flows in the near term.

To operations, earlier this month, 2 separate events occurred at our Jundee and South Kalgoorlie operations that will see an estimated impact to December gold sales of up to 20,000 ounces. The effective volumes will be scheduled for processing across the remainder of the year, and Simon will provide further detail on both these events shortly. And I'm proud for the team's swift response to safely restore the operations as soon as possible. As I've already said, the company remains well positioned to deliver our full year guidance with stronger grades expected at KCGM in the second half, along with improved volume and grade performance across the broader portfolio. Combined with growing leverage to gold prices and ongoing cost focus, we are firmly aligned to our purpose of delivering superior returns for our shareholders.

And I'd now like to hand over to Simon Jessop, Chief Operating Officer, to discuss the operational highlights.

Thank you, Stu, and good morning. The Kalgoorlie Production Center delivered a strong quarter. At KCGM, our largest asset, production met expectations while costs came in significantly lower, reflecting the team's disciplined approach to cost and capital management. Underground ore volumes reached an annualized run rate of 2.9 million tonnes with lower grades attributed to a step-up in development activity.

Our Northern Star Mining Services team delivered 8.7 kilometers of development for the quarter, up from 7.5 in the June quarter, an outstanding effort by the team. Open pit ore volumes and grades were in line with expectations and ahead of last year. Productivity is set to further improve with Golden Pike North returning to one level -- one mining level ahead of schedule, reinforcing our confidence in achieving KCGM's FY '26 production target of 550,000 to 600,000 ounces.

KCGM mill tonnes delivered an annualized run rate of 11.6 million tonnes, notwithstanding a major planned shutdown during the quarter. For FY '26, mill throughput is forecast to be 12 million tonnes with mill grades expected to lift for the remainder of the year. As Stu mentioned, we had an event at South Kalgoorlie earlier this month. After 60 millimeters of rain, a wall slip occurred in the historic open pit, temporarily affecting infrastructure for the underground mine. The main portal to the underground operations remains unaffected a return to normal stoping is expected during the quarter.

Let me close on the Kalgoorlie production center by sharing how pleased I am with the progress on the KCGM mill expansion. Over recent months, construction has advanced significantly, and the project is now moving into electrical and piping installation. Through the remainder of FY '26, we'll transition into the final stages of construction, including finishing works, fit-outs and commissioning and testing.

Turning to our Yandal production center. The highlight for the September quarter was the milling performance at Thunderbox, achieving an annualized record throughput of 6.7 million tonnes per annum, exceeding the 6 million tonne per annum nameplate capacity for a second consecutive quarter. The cost environment across Yandal remains challenging, and we continue to pursue cost initiatives wherever possible to mitigate pressures.

At Jundee, gold sales of 55,000 ounces came in below plan due to lower stope grade ore at both Jundee and Ramone, which was also impacted by lower recovery. We expect similar grades through the December quarter with improvement anticipated in the second half. Development at Griffin is progressing ahead of schedule with first ore now underway, unlocking future access to higher-grade stope tonnes, a great effort by our Northern Star Mining Services team. As Stu mentioned, earlier this quarter, a localized structural failure occurred in the crushing circuit at Jundee. The team has acted swiftly, enabling operations to resume within 2 weeks.

At Thunderbox, I am very pleased with the mill's performance, exceeding nameplate for the second straight quarter. This strong throughput helped offset lower grades from the Orelia open pit, which are scheduled to improve in the second half. Meanwhile, open pit mining at Bannockburn ramped up significantly with first ore expected to feed the mill in the second half of FY '26.

Finally, turning our attention to Pogo. At Pogo, the underground mine and mill operated at an annualized run rate of 1.4 million tonnes per annum during the September quarter despite a planned major mill shutdown, a fantastic effort by our U.S. team. Mine grade was affected by sequencing, but is expected to improve over the remainder of the year. The mill continues to focus on recovery optimization, achieving 87% recovery despite lower head grades. Development of the 2 new portals is progressing well, unlocking access to the Central Veins and Goodpaster systems. Most supporting infrastructure is nearing completion with the portals also set to improve ventilation and haulage efficiency across other areas of the mine.

Mine development averaged 1,664 meters per month, exceeding our 1,500-meter target. Let me finish by reaffirming that we are on track to deliver our group production guidance of 1.7 million to 1.85 million ounces. The June quarter is forecast to be the strongest as key growth projects reach completion. Across the business, our team remains and continues to have a sharp focus on cost and capital discipline.

I would now like to pass on to Ryan, our Chief Financial Officer, to discuss the financials.

Thanks, Simon. Good morning all. The company is in a great financial position. Our balance sheet remains strong in a net cash position of AUD 616 million with cash and bullion of AUD 1.5 billion at 30 September. On a net mine cash flow basis, the business generated AUD 183 million, thanks to higher gold prices and prudent cost discipline.

Figure 8 on Page 10 sets out the company's cash and bullion movements for the quarter, with key elements being the company recording AUD 751 million of operational cash flow, net of AUD 67 million in income taxes paid. After deducting CapEx of AUD 614 million relating to plant and equipment and mine development, AUD 59 million in exploration and AUD 64 million in equipment finance and lease costs, quarterly free cash generation was AUD14 million.

Looking ahead, operational free cash flow is expected to rise with increasing production at KCGM from Golden Pike North and ramp-up of underground production. Continued solid throughput at TBO with increasing grade planned and increased throughput and grade at Pogo. Also during the quarter, the company paid its FY '25 final dividend totaling AUD 416 million. Our growth projects and exploration plans are tracking well.

Major operational growth capital investment includes at KCGM, open pit development at Great Boulder and underground development at Fimiston and Mount Charlotte, which will enable us to lift production over the coming years. And at Thunderbox, open pit development at Orelia and Bannockburn. In respect of the KCGM growth project, AUD 196 million was invested during the quarter with major progress in structural and mechanical installation. As Simon mentioned, electrical and piping installation is now underway with final construction fit-outs and commissioning to follow throughout this year. The spend profile is forecast to decline over the financial year with the completion of procurement with forecast personnel and plant and equipment demobilizing commencing in the second half.

At our Hemi project, AUD 41 million was spent advancing process plant design, securing long lead time items and progress on nonprocessing infrastructure. On other financial matters, Q1 costs tracked to plan with our teams remaining disciplined with cost and capital decisions. Q1 depreciation and amortization is within the full year range provided of AUD 875 to AUD 975 per ounce and noncash inventory charges for the group are a credit of AUD 34 million, driven by low-grade stockpile build and higher ore stocks and golden circuit at KCGM and higher ore stock value at Jundee.

From a tax perspective, we maintain our full year cash tax guidance range of AUD 700 million to AUD 835 million, with 2/3 expected to be paid in the first half. Landholder duty for the De Grey and Saracen transactions are estimated at AUD 200 million to AUD 300 million. Payment is expected over the next 6 to 18 months. And a reminder, the company will pay its semiannual coupon payment and annual insurance premiums in the next quarter.

Finally, the company's committed hedge position at 30 September is 1.275 million ounces at an average price just over AUD 3,300 per ounce.

I will now pass back to Harmony for the Q&A. Thanks very much.

Your first question comes from Daniel Morgan from Barrenjoey.

My first question relates to costs, really. You've said costs were lower than planned, and it looks like lower than market expectations. How much of this is lumpiness of spend, noting that sustaining CapEx, you're run rating $576 million versus $750 million guidance.

Obviously, CapEx can be lumpy. Yes, just wondering how much -- what initiatives really drove this cost outcome? How sustainable it is? And how much is it just lumpiness?

Yes. Thanks, Dan. What we want to be careful to do is to not defer important sustaining capital that creates any future issues. So there's a fine balance there. But what it means is really very strict focus on expenditures, necessary expenditures that obviously also support the full year guidance. So yes, pleasing to see that work and pleasing to see where even on a low ounce quarter, where the cost came in, and we see that they just -- those unit costs improved throughout the year, helped with just maintaining that cost, but also growing the production base. We see ability to sustain the unit costs and improve on them. There is a big structural change in that cost base as we turn on Fimiston next financial year, but it's important this year is another investing year. So it's very important we keep that discipline focus optimization across them.

And then just with the production plans, I mean, you flagged this 20,000 ounce impact in the December quarter. I mean, reading the notes, it appears that you think some of this will be caught up through the year? Or can you just, I guess, expand on the production impacts and whether they can be caught up?

Yes. So essentially, the impacts of the operations meant sort of downtime, we're able to do other productive work and just resequence mine plans. The team has been fantastic at being able to do that. Mining activities continued. So it's really just mill disruption at Jundee, which we can absolutely catch up on. So hence, we've sequenced that into the second half of the year. Down in South Kalgoorlie, its contributions low volume, high grade and some development activity, ground supports continuing whilst we get the second egress reestablished and then production turns back on. So at this stage, we've said up to 20,000 in this quarter, but essentially, it just gets deferred, not lost.

And last question is just looking at the key drivers across the business in terms of production outcomes in the quarters ahead. What are the key drivers? And what is the expectation towards the December quarter, key drivers being tonnes grade. Obviously, you're not going to have any mill outages apart from what you flagged at Jundee this quarter. Can you just run through that?

Yes. Thanks, Daniel, Simon here. So the biggest -- the big key driver is getting the Golden Pike North down to the 1 bench. So it's taken us the Q1 to get us down to the 600 bench at Golden Pike North. So now we've got the East side and the West side all at one level. We're on top of where all the ounces really kick and that low strip ratio for the rest of the year. So even KCGM down in Golden Pike, we averaged a strip ratio of 5:1, and that will just decrease over the rest of the year. But the hard work has really been done. So we are set for the jump.

What I'm really pleased about is that the team has done it earlier than planned. So that sets us up really, really well for the jump for the next few years, not just the quarter for increased gold production at KCGM. So that's the biggest lever. Across the rest of the group, it really is Yandal has some higher-grade ore coming in from open pit sources in the second half as well as increased grade contribution at Thunderbox from the undergrounds.

And over at Pogo, it's returning to around the average of the reserve grade. So if you average quarter 4 and quarter 1, we're bang on the reserve grade. Q1 was lower. So it's really getting back into some better areas at Pogo, primarily in the second half. So they're the key levers across the business that we see.

And sorry, I imagine Golden Pike is going to be skewed or weighted to the second half of this financial year.

Well, Golden Pike now, we're slightly ahead of plan in terms of -- we're on the mining level. So the large ounce contribution from Golden Pike North, which we spent numerous years getting to, we're there now, which is positive.

Your next question comes from Levi Spry from UBS.

Maybe I could just pick up on that Golden Pike North piece, Simon. So will we see materially higher grades start coming through from the open pit at KCGM this quarter? Or are you seeing them now?

Yes, correct, Levi. We're seeing the grades increase, but it's not just the grade, it's the volume. So the grade has always been there, but we haven't had the volume piece with it. So we now see that strip ratio just declining. We're back on one efficient bench on both sides of the pit. And yes, you'll see the grade climb at KCGM. I think we guided at the site visit for Q1 grade process to be 1.2 to 1.4 grams per tonne, and we averaged 1.4 for the quarter. So you're starting to see that grade jump up at KCGM.

Yes, nice one. And could I just ask a question around Hemi. Maybe just sort of reiterate sort of time lines that you're expecting. And I think maybe there's been some comments around a sort of 2.5-year build. Have I picked that up correctly? Just how do we think about the next steps forward there later in the financial year?

Yes. Thanks, Levi. Yes, the 2.5-year build essentially is I guess the commentary from the DFS and accurate, we basically say the 6 months of engineering and work and then really 2, 2-plus year construction. The -- what's happening right now, obviously, is the approvals are still pending, working with all stakeholders to advance any needs that are there. We expected that in the March quarter, approvals could be met, then we were going to refresh pricing to make sure that we update all the pricing with all the counterparties and put that in front of our Board for a final investment decision during this end of this financial year.

So I think what I'd explain was that the build likely, we want to see KCGM turned on contributing, production increasing there, sort of seamless ramp-up and without the CapEx spend and then neatly dovetail in the commencement of Hemi construction. Things can overlap as far as approvals, long lead items, expenditure, preparations, design, et cetera. But it's probably important that the transfer of knowledge from KCGM goes with the Hemi build. So yes, it's the second half -- late in the second half updates on that. But really, we still need approvals before we can advance on turn and earth and doing things up there.

Your next question comes from Matthew Frydman from MST Financial.

A couple of questions on various undergrounds. Maybe firstly, at Jundee, Simon mentioned the disappointing grades during the quarter, running at about 2.5 grams a tonne, whereas I think your reserve grade is closer to 4 grams a tonne. That asset seems to have fairly consistently underperformed the reserve grade, at least in most of the recent quarters. Can you point to any perhaps recent grade control drilling or otherwise, I guess, what gives you confidence that those grades are going to improve in the second half of the year, as Simon alluded to?

Yes. Thanks, Matt. So where we're seeing the grades start to increase back to a higher number at Jundee really is from the Griffin area to the north and the development in that part of the mine is actually ahead of plan. So that's really pleasing. That gives us access to some better stope grade. So it's mainly the average stope grade in Q1. We just didn't have access to the right areas to get that typical pickup in grade that we get in Jundee. So that's one area. And the other area really is a place called Plutus, which we've been drilling for the last few years, has some very good grade that we're accelerating our mine plan out to. So it's a combination of a number of different areas across Barton, [ Nimary ] and Gateway. And it's just that it's getting those average grades up from some of those higher-grade sources coming in. So everything else was fine in terms of development plan. Ramone is on plan. That's coming to the end of its life. So we'll finish that project over the course of FY '26. But it's just timing of where those higher-grade stope tonnes come through to lift the average back up.

Got it. That's pretty clear. And then maybe a similar question then on the KCGM underground. You talked about the circa 3 million tonne per annum run rate being achieved in the quarter, but obviously, the grade a little lower due to the proportion of development. When does that sort of mix shift? Or in other words, when do you reach that inflection point on development where you're sort of hitting both the tonnage and the grade coming out of the KCGM underground?

Yes. With -- look, what I was really pleased about was the 8.5 kilometers of -- or 8.7 kilometers of development that we got for the quarter. So that's right in the rails of what our plan is for the 36 to 40 kilometers of development for the year. It is -- the grade will increase as Fimiston starts to produce more stope to it. So it's still heavy development focus, waste and ore. But as the stoping contribution starts to increase, which it did throughout the quarter, you'll see that grade -- that average grade start to come up. And then it's just a function of where we're mining at Mount Charlotte. So there's a lot of different areas there. But fundamentally, it's -- it will return back to the average grade with volume, but it's the stoping contribution and the ramp-up at Fimiston is the main area that will start to lift.

Any particular timing around that? I mean, obviously, you've said 3 million tonnes of volume this year, 4 million tonnes next year. Is that at something close to reserve grade? Or yes, what's the sort of timing around that?

It's just incremental because as the mine keeps growing, that production is not going to be 3 exactly and then a jump exactly to 4 and a jump again exactly to 5. So as the stoping areas and the mine starts to really be unlocked, then you'll just see an incremental growth in production as well as grade with more stoping. End of the day, it's the stope dirt, which is what we're chasing at KCGM.

Your next question comes from Mitch Ryan from Jefferies.

Firstly, can we spend a little time at Jundee? Can you help me understand the impact on the crushing circuit? So you've reconfigured it into the SAG mill. What's the cost and time frame to return it back to the sort of design flow sheet?

Yes. Thanks for that. The processing is back running at Jundee again. So we've had around 2 weeks where we've had to pause stop. It's the access to the infrastructure has failed for the conveyor belt that feeds the SAG mill. So we've now got going again in terms of feeding that and isolated the coarse ore stockpile area. And now we can take our time to get that rectified over probably the remainder of this quarter. It will probably take a couple of months to actually fix that. But in terms of crushing, we can still crush crusher material at the front end of the circuit, and we can still mill the material through a revised change on the conveyor set up at the back of the circuit. And now we've isolated that particular area, and we'll work on the fastest fix we can for that infrastructure.

Okay. So sort of that's the 10,000 ounce impact and then potentially a little hit to operating costs as well over the same time period.

Yes. It's the operating cost at the moment is that engineering rectification remediation work on the coarse ore stockpile infrastructure that will be a bit of an unknown, but it's talking $5 million and $10 million, you're not talking 50s and hundreds, right?

Yes. Yes. Cool. And then my second question just relates to Hemi, and you've given us obviously a bit of an update there. But specifically on the negotiations with the traditional owners, how are they progressing? Do you have a rough time frame of when you would expect those to be concluded?

Well, there's engagement with all stakeholders. Again, traditional owners absolutely continuing and working well together, but equally across all stakeholders there. And we set out that in the March quarter, it was essentially all of the feedback loops have occurred to regulators to consider all those things and any conditions related to approval. So yes, that's all on track and being pretty patient with all that to make sure it's done well.

Your next question comes from Hugo Nicolaci from Goldman Sachs.

I just want to dig into the cost at KCGM a little bit more. It looks like the open pit mining costs have started to normalize back to about $8 a tonne. The underground costs sort of tracking around that $40 million a quarter in terms of spend. Are you able to just comment sort of directionally what those rates should be going forward for the rest of the year? Should we see the open pit continue to improve and the underground sort of just pick up as you do more development?

Hugo, it's Ryan here. Yes, look, overall operating costs per tonne are a bit lighter than that. They're around currently $6 a tonne, just under actually, $5.95. Probably expect, as Simon said, as we -- on that one bench at GP North, we expect efficiencies to improve there. And then as we get into Ivanhoe with the approvals now, the cost per tonne out there is even lower again. So we expect those to improve. And as Simon said, with the incremental with the ramp-up on the underground, which I think the costs are going pretty well there, should see some improvement there, too.

Yes. Hugo, it's Simon. I think the -- what you'll see is the run rate has stabilized in the open pit, and we've had 2 quarters at 22.5 million tonnes mined. So it's getting more efficiencies into that, but that's a 90 million tonne annualized run rate. So we see that as around the -- where we're going to sit. And now as we -- now we've got the approvals from Section 38, we're going to gradually get more volume from Ivanhoe, which is obviously a shorter haul, less powder factor, et cetera. So the volumes will stay around that $90 million, but we see positive momentum in the efficiencies at KCGM.

And with the underground, it's a little bit like the previous discussion. As the stoping dirt increases the contribution, you'll certainly start to see the average cost per tonne for the underground start to come down because we're getting cheaper tonnes from the stope dirt across Fimiston in particular. So pretty pleased with where we're sitting at the moment.

Fantastic. It's all positive from a cost piece. And then just on the processing side, it looks like the processing costs have sort of stayed at that $41 a tonne from last quarter. I think sort of 6, 12 months ago, that was more like low to mid- $30 a tonne. Is that just the rate now going forward as the mill sort of approaches end of life? And how should we think about as the expansion comes online? I think historically, you've talked to a $7 a tonne reduction. Should we be thinking that number potentially then bigger?

Yes, it's a really good point. We averaged about $33 to $34 a tonne at KCGM for the quarter. But certainly, as we're getting to the end of that life, the mill and the process plant from a structural perspective has had a day. So I'm really, really looking forward to getting the new processing plant. And I absolutely do feel that gap has significantly widened from when we put out the original KCGM feasibility final investment decision. So we've seen things like cyanide and other things costs increase across the group. But in terms of the maintenance cost and operating the 30-year-old plant at KCGM, that gap has widened as it's coming into the last year of its life.

Yes. It sounds like potentially some significant room there. But one more, if I could, just on the corporate overhead piece, that just seems to have increased across most of the assets versus the run rate over the last 12 months. Can you just comment on what's driving that and we should expect that to normalize going forward from this quarter?

Yes, Hugo, Ryan here. Look, obviously, we've picked up our De Grey teams is probably part of that. And then there's been a little bit more addition around the technical and some of the operational piece here in the business. It will -- from a per ounce perspective, it will reduce because this is our lowest ounce quarter. But from a fixed cost perspective, it's probably -- it will probably continue throughout the quarters ahead, but on a cost per ounce reduced.

[Operator Instructions] Your next question comes from Andrew Bowler from Macquarie.

Just one on costs for me. From memory, Northern Star has a gold price linked staff incentive scheme. I was just wondering if the recent gold price lift is something that can be accommodated in the current guidance for this year? And if so, is there any sort of lumpiness to expect in those payments over the year that might be meaningful for us?

Yes. Thanks, Andrew. The -- it did stale as the gold price ripped up $3,000, $4,000, $5,000, $6,000 an ounce. So that's been pretty full at a full rate for a number of years. So there's not compression, I guess, or bounces as a pullback in gold price at the moment. So it's fairly sticky and embedded into -- but it is a very strong reminder of what we're enjoying at levels still above $6,000 an ounce. But yes, it's not something that's a spring related to any of these pullbacks. But what we're enjoying is still -- if we look back to our resource reserve pricing and overall cost structure, it's really around our productivities, our production increases, the capital wind down and the structural change with KCGM that's going to make the big difference to migrate us down the cost curve. It's not going to be chips and savings on unit labor costs. It's going to be on efficiency from that labor, productivity from that labor as opposed to unit cost of it.

Understood. And maybe just one more on the labor force. I mean, obviously, there's been some articles written about the strength of the gold sector in Western Australia, but obviously, some other resources industries are suffering a little bit as well. Is there any broad comments you can make about the state of the industry at the moment, how you're finding availability of skilled staff? Is there another level of tightness coming? Or is it very much being offset by some weakness elsewhere?

Yes. I don't see that tightness of the tightening of those labor markets putting pressure on wages. What I see is cost of living put expectations and pressure on what people are feeling generally, and that's not just here, that's also in Alaska. It's pleasing to see, obviously promoting ties to the U.S. to get new metals business growth. That will take a lot of time before there's any kind of pressure from those new markets if there's growth and investment in that phase. But what we need to do is turn around attractiveness of investment back into Australia. So that's very promising in that regard. But equally, at the moment, we're not gold in the same lane, and we're focused on the things that are in our control.

There are no further questions at this time. I'll now hand back to Mr. Tonkin for closing remarks.

Great. Thank you all for joining us on the call, and I appreciate your interest in our company today on a -- what is a very busy day. So thank you, and have a good day.

Thank you for standing by, and welcome to the Northern Star FY '25 Financial Results. [Operator Instructions]

I would now like to hand the conference over to Mr. Stuart Tonkin, Managing Director and CEO. Please go ahead, sir.

Thank you, and good morning, and thanks for joining us to discuss our FY '25 financial results today. We'll be referring to the presentation as published on the ASX this morning. And with me on the call is our Chief Financial Officer, Ryan Gurner.

The company has delivered another record-breaking financial performance on the back of a dedicated team effort in a favorable gold price environment. For FY '25, we reported record group underlying free cash flow of $536 million, which equates to $328 per ounce, which demonstrates the value of our profitable growth path we have been on for the past 4 years to delivering sustaining superior returns for shareholders.

What is very clear is that the FY '25 results again just demonstrates the strength and value creation that we are embedding in our business. EBITDA and the ROCE metrics have shown consistent improvement over the last 3 years, while our investment-grade balance sheet remains strong and in a substantial net cash position, notwithstanding the capital investment in growth projects such as the Fimiston mill expansion at KCGM.

True to our company purpose of delivering superior returns to our shareholders, the Board has declared a record final fully franked dividend of $0.30 per share, resulting in a total FY '25 dividend of $0.55 per share. Including the share buyback proceeds in FY '25 to successfully conclude that $300 million program, this represents Northern Star returning over $840 million to shareholders for the year.

During FY '25, we successfully added the Hemi development project to our portfolio following the completion of the acquisition of De Grey Mining. The acquisition is strongly aligned with our business objectives, and we are excited to progress this significant project. the final investment decision for Hemi is subject to the final -- to securing final permitting and approvals and Northern Star continues to advance state and federal permitting processes as well as working closely with all traditional owners in the management of heritage protection.

Northern Star continues to gain strength from the simplicity of our gold-only portfolio with globally significant scale in the low-risk jurisdictions of Western Australia and Alaska. I'm proud of our deliberate strategy to profitably and safely grow the company from 1 mine and 200 staff when I joined in 2013 to now with over 8,000 sustaining jobs and growing international significance, capable of delivering substantial financial results published today as well as the health and strength of our balance sheet going forward.

With that context, I'd now like to hand over to Ryan Gurner, our Chief Financial Officer, who will discuss the FY '25 results in more detail.

Thanks, Stu, and good morning, all. I'm pleased to present to you our financial results for the year-end 30 June 2025. Firstly, to Page 4, which provides an overview of the key financial highlights achieved during the year with the business generating $536 million in underlying free cash flow and $3.5 billion in underlying EBITDA, which is up 60% year-on-year.

This EBITDA has translated into record full year cash earnings of $2.9 billion. With the strength in our cash earnings, a fully franked dividend of $0.30 per share has been declared today, bringing the total payout to $0.55 for the full year. And during the financial year, the company completed its $300 million on-market share buyback program.

As illustrated on Page 5, we remain well positioned to deliver our organic growth projects with our strong balance sheet, which is in a net cash position of $1 billion at 30 June. We have access to flexible long-term funding options with an investment-grade credit rating, reflecting the strength of our business and the positive long-term outlook underpinned by the company's significant reserve back production profile within Tier 1 jurisdictions. The strength of our balance sheet reflects the disciplined approach we maintain through the cycle. It provides flexibility to fund opportunities to enhance our portfolio of assets to deliver long-term returns.

As illustrated on Page 6, the company continues its demonstrated history of returning funds to shareholders. As I mentioned earlier, our final fully franked dividend of $0.30 per share declared today takes our total declared dividends to $0.55 per share for the full year. This represents a payout of 25% of full year cash earnings, equating to $715 million in dividends for the financial year. Following payment of the FY '25 final dividend, the company will have returned $2.5 billion in dividends to shareholders and bought back $300 million of its shares. This total of $2.8 billion in capital returns over the history of the business, and we believe there is much more to come.

Over to Page 7, which highlights EBITDA margins achieved for the group and each production center. All 3 production centers have performed strongly and achieved healthy EBITDA margins with the group recording a 55% EBITDA margin for FY '25, up from 45% in the prior year. Pleasingly, and as illustrated, all production centers improved margins in FY '25.

I'd like to point out a reconciliation of statutory NPAT to underlying EBITDA and cash earnings has been provided in the appendix of this presentation on Page 17 and Page 16 outlines the abnormal items to reconcile from statutory profit to underlying NPAT.

Over to Page 8 now. It's pleasing to see our return on capital employed lifting since the merger with Saracen, increasing by 33% in FY '25, which reflects progress in our profitable growth strategy and focus on allocating shareholder funds to generate returns. This also highlights the strength of our FY '25 underlying earnings before interest and tax, which is up 102% from the prior year to $2.1 billion. Notwithstanding the important capital investments being undertaken across the portfolio to generate superior returns in the medium and long term, record underlying free cash flow was generated in FY '25, which totaled $536 million.

Over to Page 9 now. The company is now 4 years into its 5-year organic growth strategy. Over this period, we have completed major operational milestones to strengthen our future production profile, generated $3.2 billion in cumulative net mine cash flow and returned $1.7 billion to our shareholders following payment of our final dividend.

This year, the major milestones was completion of the East Wall remediation project at KCGM, which has been one of the most significant projects undertaken by the company. With this project now complete, coupled with the mill expansion, which remains on track for early commissioning in early FY '27, free cash flow is expected to significantly step up at KCGM.

Page 10 sets out the key elements of how we deliver value and manage our capital allocation, which is through owning world-class assets in Tier 1 locations and applying our DNA of operational excellence to deliver value to our stakeholders. We do this in a safe and responsible way with a demonstrated track record. Our portfolio of long-life assets in their locations provides us with flexibility and optionality to extract value. And as a foundation, we maintain a strong balance sheet, which enables the execution of our strategic framework through the cycle.

I'll hand back now to Stu to finish the presentation. Thank you.

Thanks, Ryan. So turning to Slide 11. Northern Star has completed the first 2 years of the 3-year build for the Fimiston mill expansion project, which will see plant throughput increase to 27 million tonnes to average 900,000 ounces of gold sold from FY '29. It was great to display the significant progress that has been made over the past 2 years to analysts, investors and media who joined our site visit earlier this month. And pleasingly, the project remains on time and within budget.

To Slide 12 reiterates our FY '26 guidance, which has commenced the year well with major plant shutdowns now completed. For the year, our production is forecast at 1.7 million to 1.85 million ounces at an all-in sustaining cost of AUD 2,300 to AUD 2,700 an ounce, averaging production output remains second half weighted. We have also included further financial guidance on depreciation and amortization, tax and dividends at the bottom of that slide.

To Slide 13, Northern Star's exploration program remains a highly attractive strategy to value creation and to support our purpose to deliver superior shareholder returns. For the year ending March '25, our cost of resource addition is a compelling $20 an ounce, and 70.7 million ounces of mineral resources and 22.3 million ounces of ore reserves, which excludes our recently acquired Hemi development project. This corresponds to a 10-year reserve back production profile.

To Slide 14, we have released the company's annual report as well as today, the FY '25 environment and social responsibility reporting suite. The collection of these quality publications led by Hilary Macdonald and the corporate team aim to highlight the extensive efforts across the business in responsible and sustainable operations, and we are proud to showcase the results in these reports. I'm also exceptionally proud of our industry-leading safety performance. The safety and well-being of our people is integral to our success with critical risk controls remaining a significant focus for our team during the year, and we are maintaining a sector-leading outcomes for our significant workforce.

Looking ahead, our focus remains on unlocking the full value of our production centers and advancing the newly acquired Hemi project that aligns with both our portfolio and strategy to responsibly deliver superior returns for our shareholders.

And that concludes the formal part of the presentation, and I would now like to hand back to the moderator for question and answers. Thank you.

[Operator Instructions] And our first question today will come from Mitch Ryan with Jefferies.

During the period, you completed a $300 million buyback. Just can you talk to the Board's decision not to renew that at this point in time? And how does that interact with the fact that you -- the franking on the dividend over at least the next 12 months?

Thanks, Mitch. Well, look, we always look at all the options for capital management. Obviously, buybacks are included in that. We ultimately see very compelling returns on our current organic investments. So I think it's important to understand the recurring and the multiplier effect of investing back in the business with those funds, and we're getting those superior returns. You've seen ROCE metrics lifting year-on-year. And I think they're the considerations that we'll have from time to time when we look at all these capital management tools.

The next question will come from Kate McCutcheon with Citi.

If I can start with the production question, and then I do have a financial question for Ryan. So thank you for the updated Yandal's medium-term outlook earlier in the month. I guess in February, we still had the 600,000 ounce expectation for that hub versus the 500,000 to 550,000 now. What were the key catalysts for that change? Or what is different now?

Thanks, Kate. So just for clarity, you talked about the February 600,000 ounces. What we've -- I guess, we spoke about Yandal generally is 500,000 to 550,000 this year and fundamentally, that 550,000 is a pretty steady state go-forward number for Yandal, largely driven by around 250,000 from Thunderbox now 300,000. And fundamentally, that's grade. We've shown in the last quarter run rate even for last year of 6 million tonnes per annum. The grade has been about that 1.4 million. Obviously, the recoveries is 89%, 90% gets you close to that 250,000 than the 300,000.

So unless the throughput goes up, grade comes up through higher underground feed, unless we can get a 1.7 million, 1.8 million grade through the plant, 250,000 is it's happy place. And we've looked at this trading off against the all-in sustaining cost. So growing just for ounces is we've really been looking carefully with the pressure in costs, quality over quantity in this regard. So not just pushing the 7 million tonnes, really looking at the higher-grade feed. So Bannockburn is in development, the Wonder underground is building its volumes. We're still pulling the Orelia material back down from Bronzewing. They're all contributing feeds to that plant. But you've seen in the quarter, we've achieved 1.4 grams, and that's a steady state at about 240,000 to 250,000 ounces.

Okay. That is crystal clear. And then for Ryan, you've guided the cash tax of $700 million to $835 million in the quarterly, you noted that you may be eligible to use De Grey's tax losses, which I think were about $440 million gross, but correct me if I'm wrong, but that needed to be confirmed post implementation. The deal has been implemented. So when do you expect to have clarity over those tax losses? And then secondly, can I just confirm when you expect to be able to start to amortize that 50% of the tax depreciable value for De Grey?

Yes. Thanks, Kate. Yes, so you're right. So the tax losses, we will be able to use. So from a, I guess, a cash perspective, that equates to about $150 million. They will be probably used over a shorter period of time, probably 3 years. And then if you think about the actual acquisition value, that's $1.5 billion. And we said before, roughly 50% of that will be amortized over 5 years. So that's the math.

Now how does it then impact our actual cash tax? What I'd probably say is you're not really going to see much of it until the second half of FY '27, because we bought it at May this year or this financial year, there's only really 2 months of that shield. So you're not really going to see that until we do the tax return again for FY '26, which won't be until December of calendar year '26. And then we'll pick up, I guess, that shield from that second half of financial year '27.

Okay. Cool. And so those De Grey tax losses, you can use them this year or not?

We can. Yes, we will, but it won't be much. It's based on a fraction of what those losses are to our market cap. So we won't see them that much this year. We'll see them in FY '26. If you're saying this year, I'm probably thinking '25. So we'll see a little bit of through '26, but you won't see the large shield until, as I said, that second half of FY '27.

Yes. on Page 3 of that release today under the De Grey section, integration section. So it highlights the interim assessment still 12, 24 months away. And then you've got the D&A doesn't come until commercial production from Hemi, which is obviously plus the 3 years. So that's the utilization of those.

The next question will come from Daniel Morgan with Barrenjoey.

I guess the question is more directed to Ryan as it's a financial one. Just on the cash tax guidance you've paid, I mean, there's a range that's been given. Can you just talk about some of those assumptions that might be embedded in that range? And I presume that it's going to be at roughly current gold and currency assumptions.

Yes, that's right, Dan. Yes, that's right. I mean, yes, so we're trying to -- we don't know yet exactly because we pay an installment rate per month, which is just a percent of our revenue. We don't know exactly what that second half percentage will be. We have an idea. And then, of course, as you say, gold price dependent will impact some of that actual dollar value.

[Operator Instructions] Our next question will come from Matthew Frydman with MST Financial.

A couple from me. Firstly, apologies, but you probably get asked this on every call. But can you give us an update on your expectations around Hemi, the process there, in particular, any kind of dates or expectations around the state and federal approval process that you're expecting over FY '26? And also any dates we should be thinking about in terms of your next study update?

Yes. Thanks, Matt. Look, probably not different to what we've probably articulated early calendar year, we put in the scheme implementation date saying that's the likely timing around those approvals. It's still iterative, and we're still working with all stakeholders at the moment to find solutions to things we're dealing with. So I think that's the process for the next sort of 4, 5 months. But yes, it's tracking as, I guess, we expected.

But what we said was once we see those approvals, that's the time to really refresh the pricing around capital. And then that's what will be put to our Board for that final investment decision. So we still think that fits later in the financial year, potentially for an inclusion in next financial year, which neatly fits with the conclusion of the Fimiston mill expansion capital off and revenue up is probably a neat timing all going well.

Okay. I understand. And then maybe pivoting over to KCGM and obviously, some great detail provided in the site visit presentation earlier this month. I'm interested in the regional and I suppose, satellite deposit opportunities, in particular, you called out Red Hill and Hercules. Can I just understand the 4-year production profile that you've given at KCGM, the 10 years at 900,000 ounces, is any of that dependent on bringing some of those regional and satellite opportunities into the mix? And if so, how do you think about sort of timing of capital and quantum of capital on those projects and where they fit in?

Yes, good point. Look, all that guidance through to that 900,000 ounces by FY '29 forward is we term KCGM. So it is the open pit, super pit is the undergrounds of Fimiston and Charlotte growing volumes to that 8 million tonnes per annum, and it's then supplemented with that large 140-plus million stockpile that's there. That's the net that delivers that guidance and that production. When you sort of start to zoom out, and that's where we're putting our thoughts to that more regional contribution, and it's a grade displacement now. So any higher grade coming out of Red Hill or Hercules or other sources into that Fimiston plant gives us ability to displace 0.6 gram material with high-grade material and therefore, get that ounce kicker.

So absolutely, we'll start talking less about KCGM and maybe more about the Fimiston mill as a cash engine and the supplementing feeds. But we still haven't talked about timing. We haven't talked about CapEx or the -- when that starts to come into the plan, but we're absolutely considering the power of that plant once it's operating. It's going to be the lowest cost mill in the region. And we've got a lot of tenure sitting in and around it that we own and deposits and discoveries that are being proved up just now.

Yes. Okay. Understood. So hypothetically, potentially something like a Red Hill or a Hercules could come in at a higher grade than the stockpiles, then it would obviously displace lower-grade material and potentially provide upside to that 900,000 ounce production profile, but obviously, at a capital cost and an operating cost.

You think about -- to give you an example today, HBJ, it's 100,000 ounce, it's one of our lowest cost mines. It's being trucked up to Kanowna Belle at probably twice the milling cost of what Fimiston will land at. It is free milling, not refractory ore. So recoveries through that circuit are better. But that's the sort of scenario as we look at all the economics of trucking cost, milling cost, overall recovery performance. Is it better to concentrate it, put it through the circuit and you're putting that high-grade 100,000 ounces instead of low-grade material. So we'll assess all that stuff at the right time.

[Operator Instructions] There are no further questions at this time. I would now like to hand the call back over to Mr. Tonkin for closing remarks. Please go ahead, sir.

Thank you very much. And look, thanks, everyone, for joining us on the call and a pretty busy reporting day. I appreciate your continued interest in our company, and thank you, and have a great day.

Thank you for standing by, and welcome to the Northern Star June 2025 Quarterly Results. [Operator Instructions]

I would now like to hand the conference over to Mr. Stuart Tonkin, Managing Director and CEO. Please go ahead.

Good morning, and thank you for joining us today. With me on the call is Chief Financial Officer, Ryan Gurner; and our Chief Operating Officer, Simon Jessop.

As we confirmed this morning, for the June quarter, we sold 444,000 ounces of gold at an all-in sustaining cost of AUD 2,197 per ounce. This enabled us to meet our revised production and cost guidance with FY '25 delivering 1.634 million ounces at AUD 2,163 per ounce all-in sustaining cost. I'm very proud of the team for safely delivering a record in terms of gold sold for the full year, which has driven record annual underlying free cash flow.

I also want to acknowledge that it's been a challenging 12-month period as we have faced productivity and cost headwinds, particularly at KCGM, our largest asset. This led us to confirm that we will not reach our ambitious 2 million-ounce per annum group target in FY '26. And primarily because KCGM is not yet able to deliver the 650,000 ounce a year run rate.

But let me emphasize, with the mine life exceeding 20 years KCGM remains a cornerstone of our medium- and long-term value proposition. And 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. Notwithstanding the challenges of the past year, record gold sold combined with an elevated gold price, resulted in the generation of strong net mine cash flow of AUD 1.189 billion for the year.

All 3 production centers contributed positive net mine cash flow with Yandal and Pogo delivering record cash flows for FY '25. Our investment-grade balance sheet remains strong and in a net cash position, and I'm pleased that we were able to complete our on-market share buyback, which has delivered significant returns for our shareholders at an average price of just over $11 per share.

Meanwhile, our KCGM mill expansion project is well advanced and tracking to plan, and this has allowed the company to formally revise its hedging policy with a decision to wind down our hedge book because of our confidence in our outlook and our balance sheet. I also would like to mention the successful acquisition of De Grey during the quarter. Since then, we have welcomed the team into our group and continue to advance the Hemi development project.

Now let me touch on FY '26 guidance that we released to the market earlier this month. The company is forecast to deliver 1.7 million to 1.85 million ounces, gold sold at an all-in sustaining cost of AUD 2,300 to AUD 2,700 an ounce. We continue to advance major growth projects to achieve our goal of being a long-life, high-margin returns-focused global gold producer.

Our CFO, Ryan Gurner, will elaborate on the increase in spend across our business shortly. But first, I'd now like to hand over to Simon Jessop, our Chief Operating Officer, to discuss our operational highlights.

Thank you, Stu, and good morning. As Stu mentioned, FY '25 has been a busy but challenging year. Safely improving productivity remains our key focus across all 3 of our production centers. Pleasing leans, Pogo delivered a strong June quarter to exceed the full year guidance. At Yandal, the June quarter was also strong to enable us to meet guidance.

The Kalgoorlie production center proved more challenging and missed guidance because of KCGM mining efficiency was below expectations and access to the high-grade Golden Pike North area was delayed. At Kalgoorlie, total gold sold for the year was 832,000 ounces, which included 419,000 ounces at KCGM. In the June quarter, KCGM delivered 118,000 ounces gold sold. During the quarter, open pit mine grades was impacted by ore source variation despite an increase in Golden Pike North contribution.

Total open pit material movement was 22.7 million tonnes, up 48% compared to the March quarter. As productive mining commenced restoring to business as usual. Total material movement for FY '25 was 74 million tonne versus a planned of 80 million to 90 million tonnes.

June quarter underground ore mined volumes were 871,000 tonnes, up 78% compared to the March quarter, with mine grades also increasing. Northern Star Mining Services, NSMS, increased development meters to 7.5 kilometers for the quarter and commenced development at the newly established Drysdale portal. KCGM milled grades were lower than planned due to open pit ore sourcing.

What really excited the team during the quarter was the commencement of the new Drysdale portal. Drysdale is 400 meters below the surface and allows for future drilling and a lower linked drive to the Fimiston underground work area. This platform will commence the journey of delineating the many mineralized systems at depth and is exciting for KCGM's long-term growth.

Looking ahead to FY '26, KCGM is forecasted to deliver 550,000 to 600,000 ounces. Underground mine volumes are planned to be around 3 million tonnes, while open pit mining productivity is forecast to increase throughout the year as mining in Golden Pike North returns to 1 mining horizon of the second half of FY '26. Milled grades are expected to stabilize in the September quarter and then left for the remainder of the year.

Just briefly, Stu touched on the KCGM mill expansion project, which remains on track. We remain very pleased with the on-ground construction activities as the project advanced to structural and mechanical installation.

Let me finish off with the Kalgoorlie Production Center by highlighting that Carosue Dam and Kalgoorlie operations generated net mine cash flow of $657 million for FY '25, a fantastic performance.

Turning to our Yandal production center. The highlight for the quarter, in fact, the year was the milling performance at both Jundee and Thunderbox. This enabled Yandal to meet FY '25 guidance, although as we experienced across our entire portfolio, the cost environment remains challenging. At Jundee, record mill tonnes were achieved to deliver an annualized run rate of 3.4 million tonnes per annum above nameplate capacity. Griffin continued to ramp up with the transition into stoping planned in the second half of FY '26. Pleasingly, development advanced increased to a new record of 8.5 kilometers for the quarter.

At Thunderbox, strong mill performance achieved a record 6.3 million tonne per annum run rate during the quarter, bringing total of FY '25 mill throughput to nameplate at 6 million tonnes. The Wonder underground mine continued to increase volumes as development with one jumbo averaged 603 meters per month for the quarter. At Bannockburn, the team continued to ramp up open pit activities in preparation for the first ore feed in second half of FY '26.

Finally, turning our attention to Pogo. Pogo has had an excellent quarter to finish off an excellent year, especially H2. For the quarter, the Pogo mill delivered a record performance on multiple fronts: monthly throughput, quarterly throughput, availability and utilization, operating at an annualized run rate of 1.6 million tonnes per annum. Higher grades and increased recovery also contributed to Pogo delivering 85,000 ounces of gold sold at USD 1,154 an ounce.

During the quarter, the development lifted 12% quarter-on-quarter to an average of 1,650 meters per month. Late in the quarter, we started work on 2 new portals to access and develop Central Veins and Goodpaster deposits. The resource for these areas is 5 million tonnes at 10 grams for 1.5 million ounces with only 50,000 ounces in reserve and hence, this is a critical long-term strategic development. The mill also achieved a new quarterly record of 395,000 tonnes of throughput as the availability was 97% for the quarter.

It is worth noting that for the full FY '25, Pogo sold 283,000 ounces and generated AUD 463 million of net mine cash flow. In U.S. dollar terms, this corresponds to USD 301 million, which is greater than the $260 million purchase price paid for back in 2018.

Let me finish by reiterating group guidance -- production guidance we provided to the market earlier this month. We guided FY '26 gold sold to be in the range of 1.7 million to 1.85 million ounces, including September quarter production of approximately 400,000 ounces at the high end of the all-in sustaining cost guidance range. As planned mill shutdowns will be carried out across all 3 production centers this quarter. The June quarter is forecast to be the strongest for the year due to access to increased volumes of high-grade ore sources as they become available.

I would now like to pass over to Ryan, our Chief Financial Officer, to discuss the financials.

Thanks, Simon, and good morning, everyone. As demonstrated in today's results, the company is in a great financial position as we enter FY '26. Our balance sheet remains strong with cash and bullion of $1.9 billion, and we remain in a net cash position of $1 billion at 30 June. This includes the $663 million of cash acquired following the acquisition of De Grey.

The company has generated record full year cash earnings. We expect the final figure to be in the range of $2.8 billion to $2.95 billion. A reminder that our dividend policy is based on 20% to 30% of cash earnings. Importantly, as Stu has already mentioned, all production centers delivered strong net mine cash flows, which totaled $1.2 billion year. As Simon mentioned, Pogo stand out delivering a record contribution.

The company continues to deliver on its key growth projects across the portfolio. Growth capital was $40 million above the full year group forecast of $1.63 billion. The additional spend related to $21 million for previously committed long lead time items and project development progress at Hemi, and $22 million at the KCGM mill expansion, which remains on budget. The company's committed hedge position at 30 June is 1.4 million ounces at an average price of $3,286 per ounce, with no further commitments added during the quarter.

Let me touch on the company's cash, bullion and investment movements for the quarter. The company recorded $922 million of operating cash flow which included $37 million advancing the Hemi project, which included the $21 million I referenced earlier and $18 million in corporate tax payments. Quarterly free cash generation was $211 million, bringing the full year underlying free cash flow to $536 million.

Now turning to our FY '27 outlook. As Stu mentioned, we expect to deliver 1.7 million to 1.5 million ounces at an all-in sustaining cost of AUD 2,300 to AUD 2,700 per ounce. We forecast cost per ounce to improve throughout the year. The higher cost base in FY '26 reflects inflationary pressures of 5%, corresponding to a year-on-year increase of approximately $100 per ounce. Higher gold price related royalties and Pogo tariff assumptions have also contributed.

Sustaining capital of AUD 750 million, corresponding to $420 per ounce or on a year-on-year increase of $130 per ounce, primarily from higher development advance and associated underground ventilation, power and pumping infrastructure investment across underground operations; processing plant capital across all facilities to underpin asset availability and reliability; additional lease payments for open pit fleet at Yandal and KCGM, underground fleet at Pogo and midlife rebuilds of the haul truck fleet at KCGM; and allocation of mine operating and development costs, including deferred stripping to all-in sustaining costs for assets expected to reach commercial production during the year. These included Griffin underground at Jundee, Wonder underground at TBO, United Consoles at Fim Underground and Bannockburn and Orelia open pit operations at Yandal.

FY '26 operational growth capital, excluding the mill expansion project, operational readiness and Hemi development is guided at a midpoint of $1.17 billion. At the Kalgoorlie production hub, the majority of the investment is allocated to projects will deliver the mill feed and the infrastructure for the KCGM plant expansion. These projects include development and ramp-up of Mount Charlotte and Fimiston Underground mines and infrastructure requirements and continuation of the Fimiston South cutback.

At Yandal, investment primarily relates to Thunderbox open pit development, infrastructure and required equipment for Bannockburn and the Orelia Stage 2 cutback. These 2 operations underpin future mill feed to Thunderbox. And at Pogo, USD 70 million to USD 80 million for underground development and infrastructure associated with the increasing mining volumes along with accessing new areas, as Simon mentioned, and further mill optimization works focusing on throughput and recovery.

Growth capital expenditure guidance for the mill expansion project remains unchanged at $500 million to $530 million. KCGM Mill operational readiness capital of $315 million to $370 million includes spend for new tailings and a new central power plant and transmission infrastructure. Capital for the additional tailings capacity was included in KCGM's base case life of asset plan and included in the returns assessment of the expansion project. This capital has been brought forward to cater for the increased throughput rate from the expanded mill from FY '27.

At our Hemi development project, we are guiding $140 million to $150 million spend, which includes ongoing engineering and design as well as commitments for long lead time items. And our FY '25 exploration program is guided at $225 million. Importantly, with the company's strong liquidity position of $3.4 billion at 30 June, our capital investment and exploration activity is fully funded.

I'll now pass back to the moderator for the Q&A session.

[Operator Instructions] Your first question comes from Kate McCutcheon with Citi.

Good to see KCGM underground above 3 million tonnes. So I guess we've had sell-side expectations for CapEx for FY '26 missed the mark, like $1 billion a year ago, close to $3 billion today, and attach to that is Hemi, which is new. So I guess, moving forward, can we expect some guide rails in terms of the CapEx band for a few years ex Hemi? Or what are the key things to think about in terms of dragging right or not on CapEx for the medium term, both that 400 ounces sustaining and growth capital?

Yes. Thanks, Kate. Yes, I appreciate that, that has definitely been an uplift to what's been included in consensus. But I think if we kind of break it down into whether it's price or activity, there were some activities there that really need to be captured and understood. So the tailings facility is a big chunky piece at KCGM. I appreciate that if the mill expands, we need to bring that capital forward. So it was in the life asset plan, but it's bringing that capital forward. And we've guided what the saddle of that expenditure is this year and next year.

Other items that may not have been picked up and we hadn't guided a year ago, things around the thermal power station and the transmission lines and the readiness for the renewable power projects in Kalgoorlie is $80-odd million this year and then flows into $70 million in the next year. Those are items that we had forecast and predicted. But I can assure people that with a multi-decade project, these are a very strong return capital investments to ensure that we have power security, we have lowest cost of power availability and we're not held to the grid, held to ransom and Jundee is a great example where we've got lowest cost energy across the group because of that investment earlier.

Other big items, obviously, the continuation of the Fimiston mill this year, but that hasn't changed. That $500-plus million and then a tail of $100 million in FY '27. That's the same on track number for the FID for that growth project. And then the mining volumes are probably one of the things that's lifted a bit and it's on you get something for the money, it's not just a price escalation. It's the underground mining volumes at Fimiston and KCGM because of -- the 3 million tonnes is the production number, but there's still a significant amount of development. You see in the quarter, 7.5 kilometers, we're seeking to keep lifting that development lead indicator to build and expose big tonnes per vertical meter there for future production.

So this is something where we'll work hard to get that development done, which will translate into capital expenditure. So there are some of those lumpy things. I'll throw it to Ryan on some of the other capital items, but the sustaining capital as well is something which we feel has lifted up, but there's still an approach that is not a final 1-year investment. There is multiyear benefit from some of that uplift in the sustaining cost at the moment.

Yes. Just to add, Kate, look, just to call one out. I mean, the midlife truck rebuilds at KCGM. So there's $20 million just there on some of those trucks. So that's one item just to pull out that, yes, we're spending it this year, but they're 5-year effectively investment cycles on those types of trucks. So we are incurring it this year in sustaining capital, we won't see that next year.

Look, we are spending a bit of money on plant in terms of capital that I think we will have to spend in the next few years. So we're doing tank relines. We're doing refurbishments. We're doing some steel remediation on some of the -- we've got aging infrastructure. It's one reason why Fim expansion as well and that plant is going to be very beneficial for the company is that its capital requirements from the processing plant structure is going to be much less.

And then as Stu mentioned, the underground infrastructure piece, we are having to put a bit in there this year, again, particularly around KCGM. Just to that multiple years investment around primary fans and infrastructure and things like that. It will still have a requirement going forward, but it's a bit heavier this year. So I do expect some fall away on some of these items going forward from a sustaining perspective.

Okay. But there's no plans to sort of give the market some medium-term guide rails?

It's very difficult, as we've shown, to predict and show what. We can tell you the projects. We can tell you what's approved and the actual commitments that are out there tended locked, which is what we've done. And we've shown the tail of some of those projects, which are multiyear projects. But rounding up and giving multiyear guidance, we've not done that previously, and we don't intend to do that today.

Okay. Got it. And we didn't get that new outlook to FY '29 today, sorry, I'm sticking on the guidance phase. Is that pending Hemi or will that come with a Super Pit site visit? I guess I'm looking to understand the business after next year?

Yes. So look, with the Kalgoorlie site visit, we'll give some more color on both on progress on Hemi, but Hemi is still pre-approval. So the timing, we can tell you what it looks like in space, but ultimately, when this commencement is at our control on the hinge to approvals date. But overall, we'll give you the view of what the assets are doing at the Kalgoorlie site visit.

Okay. That would be great. And then finally, just removal of the hedging policy, that's great. Is it fair to assume that Hemi will be funded without any new hedging?

Yes. So to be clear on what that is, is we've just brought the minimum -- we've taken away a minimum hedging commitment, which was important to us whilst we were giving capital -- long-life capital projects investment. So basically taking that floor away. In the last 3 quarters, we've added no hedges and that's been the attitude because we've got confidence in the outlook on our balance sheet. So the policy is basically removing the minimum and allowing us to essentially unwind and deliver into the current hedge book.

So we're not accelerating it. We're not delivering early. We're just not adding to it. And the attitude, you just asked about Hemi, the attitude would be we've got well capacity to deal with that within our current balance sheet without looking at hedges.

Your next question comes from Hugo Nicolaci with Goldman Sachs.

And congrats on a record free cash flow for '25. I just want to pick up on Kate's question around the CapEx piece and sort of looking at what that ongoing spend is. If we try to break out what that ongoing cash cost versus all-in sustaining costs, are you able to give us a bit more color in terms of that $750 million for FY '26. What the rough breakdown is between the production centers?

They're probably all sort of going -- Hugo, it's Ryan. They're probably all increasing at similar, I'll say, rates. I guess, Kalgoorlie is probably lifting -- this is Kalgoorlie's operations probably lifting $100 an ounce. Yandal's $150 to $170, and then Pogo is probably lifting USD 70 an ounce that's probably the ranges, Hugo.

I'd say to the point saying it's a bit of a wave of investment. So we've moved from, say, $280 an ounce to sort of $420-odd an ounce. So it's sort of hanging between 13% of all-in sustaining cost of sustaining capital to up to sort of 17%. Now a midpoint there is probably the happy place, and it will go in cycles. Some of that fleet last 3 years, the ground stuff, some of it is 5 years for the open pit stuff, big investments like capital, vent, power at Fimiston at one-offs.

So it's about saving and going between those bands throughout the year, the sustaining capital number on a per ounce basis, may sit around about that 15% of all-in sustaining costs. So that's probably how it relates through to the dollar millions. So that $700 million plus this year is probably a bit of a peak.

Great. Got it. And then sort of also picking up on the other point, when do you expect to be in a position to give that medium-term outlook to market? I think historically, you've talked to later this year. Do you need to get more certainty around the timing of Hemi before you can give that update and feel comfortable there? Or can you give a portfolio outlook on an ex-Hemi basis and maybe give the market something a bit earlier?

Look, the Kalgoorlie site visit we'll provide as much as we can on visibility of these assets. I think we're just in the tail end of that 5-year strategy that's stabilized Pogo, it stabilized Yandal. You've still got that last step change piece at KCGM with the mill expansion. And then the sliding piece is the introduction of Hemi. So it's quite a simplified look-forward business. So we'll try to show what that looks like. But if you're asking us for a decade, CapEx and production outlook, we just never going to give it out in that regard because it's a moving beast.

Yes. No, understood. And then on Hemi just in the press this week around appeals on native title and water discharge concerns. No doubt that probably would have come up in your DD. What got you comfort there in terms of water or alternative water treatment options? And how much work is left to go to either study those or recast? And just sort of any comments on how those discussions are progressing?

Thanks, Hugo. The question, the second one, I thought I was expecting that from the media. A couple of clarities. One, it was misreported that the EPA had approved Hemi. So starting with that, all the EPA has done is put out for public comment, the appeals window. So let's sort of stick to the process that is there and that attracts the appeals. We are very aligned with the thinking of all stakeholders up there, and there are lots of options. So yes, we don't see anything different to what we've done through the due diligence and just basically, we'll continue to look at those options going forward. So, yes, what's being reported is to sell papers, not to deal with facts at the moment.

Your next question comes from Daniel Morgan with Barrenjoey.

Stu and Ryan, just on the Super Pit, it's fair to say FY '25 physicals were below plan. But just looking at the June numbers, looks like a big lift in underground ore mining, open pit material movements. Can you just expand a bit more on rectifications to the plan and whether these early wins look like they're sustainable?

Yes. Thanks, Dan. I'll let Simon just go through because there's some huge highlights in the quarter that show confidence of why we set the plan forward. So I'll turn it to Simon.

Yes. Thanks, Daniel, Simon here. So in terms of the step change in the underground, we've been building with the development for that for a while. So the Fimiston underground itself delivered nearly 200,000 tonnes in the quarter. So that was the step change as it moves into the stoping side of mining there. So saw a step change in Fimiston, which will be sustainable and ongoing and continue to lift as we go forward. And then also at Mount Charlotte, just bigger bulk stopes starting to come through. So really, really pleased with the step change we've seen in the underground.

We knew that was coming, probably a little bit later than we wanted in FY '25, but you can't unsee that number now, 870,000 tonnes, great step change. It will continue to build with the development as a lead indicator, you'll see that build out as we go forward. But underground's in grade really going forward. In terms of the open pit, 22.7 million tonnes for the quarter. That's back where we need to be. And we've also seen with that extra volume, about a 37% reduction in the cost per BCM. So going really well in terms of the open pit volumes coming up and those costs starting to come down. So going forward, really comfortable in that 80 million to 90 million tonnes.

And just a couple of clarifications on that. When you were saying Fimiston did 200,000 tonnes underground in the quarter, you're just defining the area that's not Mount Charlotte, I presume? And then just a clarification on the open pit material movements. I imagine in the quarter, you were more near the top of the pit, and so you got different -- you've got shorter shuttle distances and whatnot, whereas later in the year, you're planning to be in Golden Pike where you're deep in the pit. Just wondering if you could talk about sustainability once you have to go down to the bottom of the pit?

Yes. Good question. The Fimiston side of the business has just seen that step change in the stoping. So no issues in going forward with that. In terms of the open pit, yes, the haul distance gets a bit longer, but we've already started moving that. So we've got all the equipment, all the gears, it's really just simple mining versus what we're dealing with in FY '25, which was dealing with a lot of big rocks in the east wall. That's all behind us now. So we're just seeing the productivities lift overall.

And the plant at the Super Pit. I know it's denoted often as a 13 million tonne plant per annum. Did 11.8 million tonnes, I think, in the year. So there's some -- is it -- what's the confidence of the throughput before you turn on the big mill expansion?

Yes. We've factored it at 12 million this year, Dan, for that reason. So there's this sort of balance. Simon and Steve and myself will be looking closely at. We're about to turn on a new plant in 12 months, how much maintenance investment in an old plant or limp it along. So there's a bit of a balance there. We've allowed a buffer. So we're not sweating that plant to get 13 million tonnes per annum this year. So we've come back to the 12 million, allowing for some of that breakdown and some of that proactive sort of -- reactive maintenance because of the age of it. And this is that balance for not spending capital on something that you're not going to get the benefit from in future years with the new mill switchover. It's something that will be used in concert with the new plant, Absolutely, we'll invest, but it's this bit of a balance where we wanted to run confidently up until the day we switch over and then be done.

Your next question comes from Matthew Frydman with MST Financial.

A couple of questions from me. Firstly, can I just continue the thread of the prior questions on the medium-term outlook and your CapEx guidance. And you talked about the thermal power station and tailings dam at KCGM. Obviously, reasonably material items, which were likely already in your capital works plan for the year and really arguably part of the total budget and the economics for the mill expansion, but obviously hadn't really been clearly spelled out to the market.

So again, just picking up on some of those prior comments. Do you think differently maybe about how you approach some of the more forward-looking outlook on those sorts of items? And then particularly as you come to building Hemi or maybe other major projects, I mean, I know you said it's not going to be practical to give a 10-year outlook for the business as a whole. But certainly, I think from a market perspective, probably something we're considering if those sorts of capital works are already kind of in the budget?

Yes. I appreciate that. Look, the $1.5 billion mill expansion, we were very clear on the boundaries and ring-fence of what that was, and we're very clear that it did not include the tailings facility and the tailings facility is related to the total tonnes of the life asset but the relativity is it's got to be established and built earlier so that your mill throughput can pick it up, right? So it was -- the economics and the returns were based on that stockpile going through the expanded plant and they are still true and robust. There's nothing missing from any of those articulated returns metrics.

But yes, the visibility of multiyears to get these things done, I appreciate we still had the Section 38 approvals for that extra footprint for the advancement and all those things. So they're all in train to be approved and put there. But our ability to either get hard tendered numbers, internal, external contractors or owner-operator activities, all the pricing around all that. Two years ago, we were not in a position to give forecast on capital, hard capital numbers or if we had, they'd be different today. So I think I appreciate that we're -- I'd rather give you no numbers than wrong numbers. We give you the foresight of what type of activities or what projects are in front of us.

And so when we talk about near term, you're asking for multiyear detailed capital and sustaining cost guidance and we're giving you the elements of the big projects that are being approved and being budgeted. But as far as the stitch up together, we can give our waiving guidance to production outlook. But you look where we are 5 years on, 2 million-ounce target, which is still a project where the company assets can deliver. However, FY '26, when we projected this 5-year plan to get there. We're not there. And you can see the impact that the markets had on us because we haven't delivered to the decimal point.

However, all those projects and the viability and the returns of them are still very significant, very important and still in train. And so we're a bit gun shy of really giving granularity that then we get held to why isn't it that number. So it's a bit of a balance here, we're going to try and tell you as much as we can tell you to what we're looking at working on but give us a bit of grace to say, look, there's still some hard numbers. No doubt to Hemi. Hemi's CapEx numbers are stale. So once we get that refreshed and renewed and we know when the approvals are, we will be able to articulate what those numbers are with confidence. But right now, we're stuck on the DFS plan and numbers that are out there.

Yes, I understand. Thanks for the additional commentary there. I mean, we're all pretty simple beasts as analyst or at least I am. So anything you can spell out for us obviously is quite helpful in terms of the medium-term outlook. So I appreciate that. Maybe secondly, on capital management and shareholder returns. I mean, I think probably sound like a bit of a broken record on these quarterly calls at the moment. But as you alluded to there, your share price performance has disappointed relative to the peer group and gold price.

You've picked up arguably a bit of excess cash with the De Grey acquisition, now sitting at $1.9 billion cash and bullion. If I do the math on your dividend policy in the second half, you're probably only likely to return up to maybe $500 million of that with the final dividend. So can you comment on the attractiveness of potentially a new buyback program in FY '26? And how do you think about weighing that up as in weighing up a new buyback against maybe closing out some of the out-of-the-money hedges given your revision to the hedging policy?

Yes. Good. I'll work in reverse, there's really no benefit in closing out hedges. It's far many -- far more better returns investments for that one. And it's really -- I know it's a big overall number, but relative to our business and relative to the unhedged ounces, we've got really good exposure and leverage to gold price. So the hedge one is a lower priority, but you're seeing that our commitments are to not add hedges and not compounded. Then you come back to all of the organic projects that we're investing in have very strong returns, and they are taking the priority.

We were very pleased with $300 million buyback that we got in at $11, and we see that as a valuable tool in capital management. And I think the board in time will assess the opportunity to do that again. But at the moment, looking at surplus cash flow we see the greatest returns in order and ranking back into these organic projects that we are there. It doesn't mean a buyback is not compelling when we're at a discount to NAV. But the returns out of these organic investments are significant. So we want to make sure that we complete those in good order.

Our next question comes from Al Harvey with JPMorgan.

Apologies to look back at some of the guidance and outlook you put in some of your early presentations. But I guess just in the context of the sustaining CapEx discussion at KCGM and cost more broadly. Do you think -- I think the target in there was for the project to do about $1,425 an ounce all-in sustaining costs once you reach that 900,000 ounces per annum steady state rate. So is that still achievable? And might we get a little bit of an update on that at the site that's coming up?

Yes. Good. Thanks, Al. Look, it's a stale number. And what we're really looking at is the overall step change improvement to the cost base once that new mill comes in and the savings on the cost per tonne for that new expanded efficient plant plus all the other good stuff Simon's got in hand with productivity gains and improvements in growth in the underground. So yes, hard again to circle right back to a firm number, but why that number was relevant was when we costed up the FID for that $1.5 billion investment, we protested it at AUD 2,700 an ounce. We've got a pretty solid IRR with a significant 200,000 plus, 250,000 ounce uplift for a $250 reduction in AISC. All these things were relative to the decision at the time, including the hedges.

Right now, as we know, all of those numbers have moved. But directionally, this is the investment and the improvement on the overall operating cost of that asset, which will be half our business is still very compelling. And I think it's on a percentage basis, will surpass the investment case on the day. So yes, that $1,425 is perhaps a stale number, albeit this asset will be a top 5 global gold mine, and it will be setting inside the third lowest quartile global cost curve, and that's been the investment case. So relative it will generate as much cash flow as anything globally. And so that's been the continuation of the remit of what we've been trying to achieve out of that building.

And maybe just one on the Yandal Hub, I think 5-year plan. You did know that it has stabilized there, but probably at a bit lower level, I think you've been targeting about that Hub to do about 600,000 ounces per annum longer term. So I think you kind of alluded to it, maybe it's just a timing issue. But how do we think about the time frame that we might end up getting there to that 600,000 ounce per annum, right?

Yes. Look, that's one -- and I look at Thunderbox particularly, that's one that we're jury is out on, and we're road testing its capacity to do that [ 300,000 ] consistently. We've got the 6 million tonne per annum nameplate that Simon has demonstrated but really, this is a grade blend. And so what we tested and why we really didn't push hard to this total 2 million ounces in urgency is at what cost. When you start looking at some of the ounces we can grab and drag in perhaps you're changing cutoff grades, perhaps you're changing -- which in turn change space.

We don't want to chase a number at any cost. We want to look at margins. We want to look at the happy place that these assets produce at. So well spotted, but that's something that I would retest what is the happy state for Yandal generally, which demonstrated what Jundee could consistently do. But the Thunderbox region, we want to make sure that we're not just trying to sweat it to get around number. We're getting the best overall margin and the best AISC that we can achieve out of that.

Your next question comes from Hugo Nicolaci with Goldman Sachs.

I just wanted to round back on the power station CapEx. I mean obviously, it looks like an upfront CapEx hit near term, but we haven't really talked too much to the benefit you expect to extract out of that one. So maybe just with the reference, you mentioned Jundee and the power works there, what sort of operating cost savings you expect to get out of putting in new power infrastructure at Kalgoorlie?

Okay. So the -- to clarify what it is, we've obviously got the thermal, the joint venture with the thermal for the Parkeston Power Station presently, which is quite aged infrastructure, and we know the cost of that. We know the cost of the grid. And I'm not going to use commercial and confidence numbers, so I'm not going to be giving you a hard cents per kilowatt hour. But we've got the grid costs that we've got in front of us right now that we know. And then we look at absolute capacity that the site needs, and we're saying we would prefer to have renewables. We prefer to have the lowest cost thermal generation that we can have.

So this investment at the moment is saying, "I could generate all the power from Parkeston and feed KCGM, the expanded case, but it would probably be some of the highest cost energy. And we cannot rely on the state grid. It cannot provide the power that we need in Kalgoorlie. So we've got to go alone here, and it will be the highest cost as well on staying on the grid. So what we're doing in the first instance is the thermal backing for new gas-fired power station, nearly 120 meg of power installed. It will underpin the baseload for a large renewables, wind, solar battery system, which in time will be through a PPA, through a third party likely. But this foundation investment is a joint venture with the thermal power station and all the connectivity distribution to KCGM to give us power security and give us confidence of price.

So we know that we'll be some of the best pricing that we can ever achieve in Kalgoorlie and it will be probably on par with Jundee, but it still relates to the gas price we get to the gate there. So yes, I'm not going to give you hard commercial confidence numbers. But we've weighed up the -- our adage is we'll get the lowest cost that we can get out of the gold fields.

Fantastic. And then just another one around the divestments piece you've historically talked to the potential to rationalize the portfolio. Any updates there in terms of timing or sort of high level what you're thinking of where those could come from?

Yes. I mean good question. Look, we -- the outlook is probably around who are the buyers and what are they prepared to front out because what we've guided for here, all the assets we have are all contributing. Simon and Ryan spoke about the cat contribution that each of these assets are doing. Nothing is holding us back. In fact, they're helping fund the growth. So unless we're paid, paid well for those assets, they're in the fold at the moment. You've seen some minor things like the Central Tanami project. We still love and believe in that ground and see that opportunity. But as far as the scale for Northern Star is probably not going to get there. But there's an example there where we can do small divestments to, say, simplify but put it in the right hands of people that can advance the project. But on the other side, is we're not here running processes and putting things out for shop. We're investing in our projects, and they're contributing well.

[Operator Instructions] Your next question comes from Levi Spry with UBS.

Maybe just rounding back to some of these questions. So on the CapEx, thanks for the extra lead on the sustaining piece. Just on this operational growth CapEx line. What percentage of that is a go-forward number, in my mind, a sustainable number, repeatable, whatever the terminology you want to use, particularly FY '29?

FY '29, it's a long way out. Look, I think, look, at the end of the day, the majority of the -- if we just break it down by the majority of the spend is in relation to the growth of Mount Charlotte, Fim underground and then the cutback. So I would suggest and we've guided that $500 million to $550 million. That will likely continue for a few more years until we get some steady state, particularly in the underground. So that's going to be in the business for a few more years. And that, as you know, gives us that long-term feed source.

Across the other assets, you've got Bannockburn and Orelia make up a large chunk of the sort of the Yandal growth. It's about $220 million, I think we've guided. Again, those 2 assets are coming into productive years, I'll say. So I'd probably say those -- that CapEx would drop there. But then there's other satellite pits opening up that then will take the place of those 2. So I probably see some drop off, small. But again, there'd be capital for other projects coming in for the open pit feed source there. And then across the assets else, there's sort of smaller targets and smaller projects that we're delivering. Might well be Hercules comes into the plan around the South Cal region to feed KCGM or KB as well in the years going out. Again, I can't give you a number of what that's going to be, but it's not going to be a large, large chunky bit of capital for that to come online.

Yes. The key thing is any capital investment growth projects, I mean, comes commensurate with the production growth. It's just the timing of the lag of when that actually comes in. So with investments that were previous years, you still haven't really seen a step-up in the production coming from that historic investment. And we're trying to align -- the CapEx this year is aligned with the growth this year. We don't see a lot of growth. It's coming in future years and any investment in capital going in '27, '28, '29 comes with further production growth after that.

So to Ryan's point around, if you start a new underground or a new pit and do a cutback for $100 million, it will kick in extra ounces on the back of that, which will either fill a hole of a dip or it will add to the ounces of that operation. But the big structural CapEx events, Fimiston mill expansion is complete and falls away as its tailings facility is built for a decade. The Hemi is the big lump that's to come that then comes with commensurate 500,000 ounces years later.

I think a view of Pogo, it's doing great. It's generating good U.S. dollars. What else can it do? So people say, how much CapEx is that? Well, what's the price and what's the payback and the investment? We'll do some thinking around that, that could occur before '29. But other things in or out, these are really just working and every ounce that lifts up, attracts that dollar per ounce sustaining capital. So it might be a case where some of this CapEx growth slides across and is called sustaining because it's attached to the ounces that are being maintained. So yes, we'll probably point to big lumpy projects to not scare people with the renewables Kalgoorlie. It's a big number, but it's likely to be outsourced to a third party and embedded in a lower operating cost through a PPA as opposed to Northern Star paying for that capital for that big renewables project.

The capital at the moment with the thermal and we want control of the connectivity and the head end of the connection through to the grid as part of our owned infrastructure. So we're not, I guess, held ransom on that. That is like we have the power at the moment. We've got retail, wholesale generation in Kalgoorlie. We want to maintain some ownership of those things, that's why we're really to put that capital up. We could have outsourced that capital, given it to a third party but then we're paying rent on it forever.

Yes. I appreciate the extra detail. And maybe just a second one around the KCGM ramp-up. So it looks like you've reiterated 900,000 ounces in '29 and the processing sort of throughput. So it's really just a question around the grade. Can you just remind me around the underground ramp-up? So the really good quarter you've just had 3 million tonnes now. I think previously, you've said 8 million tonnes at some point in time. Can we just help us sort of work out that profile of the grade that matches this throughput?

Yes, not today, Levi. I recon we'll give you that color at the Kalgoorlie site visit with the operation. But yes, what we've said is 3 million tonnes per annum from the underground this year, and we've showed a run rate above that for the quarter. So it gives people confidence in that.

So our next question comes from Mitch Ryan with Jefferies.

Just want to dig into KCGM mill expansion CapEx a little bit. You sort of -- I know we're not talking about [ step stations ] in quantum, but CapEx spend for the year was $544 million versus guidance of $500 million to $530 million. It's only gone up a little, but then you've maintained the profile into '26 and '27? Can you talk to how much of that was just timing of capital spend versus how much was inflation? And do you see any risk at all to the upside on that capital number?

Mitch, it's Ryan. Look, there was a couple of items that were expedited in that last couple of months, and there were some choices around doing some structural modulation of steel, which just meant that basically we had to upfront some of that cost. So nothing in relation to an overrun or inflation, it's all tracking as we plan right now.

There are no further questions at this time. I'll now hand back to Mr. Tonkin for closing remarks.

All right. Well, thank you very much for joining us on the call, and I appreciate your interest in our company and what is a very busy reporting day. And I look forward to catching up many of you at our annual visit to Kalgoorlie. So thanks, and have a great day.

That does conclude our conference for today. Thank you for participating. You may now disconnect.