Northern Star Resources Ltd.: KCGM site visit takeaways

Research evidence excerpt

Northern Star Resources Ltd.: KCGM site visit takeaways

underwrite branko.skocic@jpmorgan.com

yet is the 12 months between here and steady state, and that is where the earnings J.P. Morgan Securities Australia Limited

risk sits. We retain Neutral. Zane Guo

(61-3) 9633-4020

• Built to remove operating cost; not minimise upfront capex. The plant is zane.guo@jpmorgan.com

exceptionally well built and deliberately designed for a multi-decade life. The J.P. Morgan Securities Australia Limited

capital is sunk; what matters now is how much future cost the design removes.

NST has gone from five mills to three larger units, replaced +30 pumps,

installed permanent cranes and monorails in place of mobile cranes and

contractor crews, and designed in rotatable crusher components, direct

maintenance access, dedicated belt-change facilities and dual-sided mill

relining. Management’s intent is to halve processing cost/t against FY26

(JPMe ~A$45/t) on a real basis at steady state from FY29. The denominator

matters, since FY26 was struck on a plant running at 79% of nameplate, and

we would frame the prize as costs better defended against inflation rather than

absolutely halved. But it is a larger opportunity than we had credited, and the

visit increased our confidence that it is technically credible.

• Power is material, but back-ended. NST targets roughly one-third lower

power costs through the Parkeston JV (110MW, 50%-owned), new thermal

generation and a renewables package with battery storage. Components

commission progressively, with the full system expected in place by late CY28.

Power sits inside the processing cost/t target, which makes the complete cost

reset an FY29 proposition rather than an FY27-28 earnings driver. Kalgoorlie's