The Northern Star Resources Ltd (ASX: NST) share price has sunk 9% after the ASX mining share gave a FY25 update and FY26 guidance.
Northern Star Resources is one of the largest gold miners on the ASX.
FY25 update
The business told investors that total gold sold for the June quarter was 444,000 ounces, bringing the FY25 gold sold to 1,634 ounces and within the revised group guidance range of between 1,630,000 ounces to 1,660,000 ounces.
Northern Star Resources also said its all-in sustaining costs (AISC – production costs) are expected to be within the guidance range of between A$2,100 to A$2,200 per ounce.
For the Kalgoorlie production centre, total gold sold was 832,000 ounces for the year, which was below the revised guidance range. Gold sold in the June quarter was 118,000 for the June quarter as mining productivity improved across both underground and open pit ore sources late in the quarter.
Yandal achieved 518,000 ounces sold, the mid-point of its revised guidance, while Pogo achieved 283,000 ounces of gold sold, which was above the top end of its revised guidance.
FY26 outlook
The company said it continues to advance major growth projects to achieve its goal of being a “long-life, high margin, returns-focused global gold producer”.
The Kalgoorlie mill expansion is one of the key enablers to achieve this goal. The commissioning of the mill is on track for early FY27.
Northern Star Resources said the positive change in performance during the June quarter, particularly with increased productivity at KCGM, led to the business providing FY26 guidance.
The company forecast itself to deliver between 1,700,000 to 1,850,000 ounces of gold sold in FY26. The September quarter production is expected to be the softest quarter, below the low-end of its guidance range because of planned major shutdowns at all three production centres.
The June 2026 quarter should be the strongest as growth projects complete, according to the gold mining company.
KCGM is forecast to deliver between 550,000 ounces to 600,000 ounces of gold. Pleasingly, open pit mining productivity is expected to increase throughout the year.
The FY26 ASIC guidance is forecast to be between A$2,300 to A$2,700 per ounce, notably higher than FY25, but improving throughout the year. This reflects broader sector inflationary pressure, of around 5%. There’s also an increase in sustaining capital, underground infrastructure and processing capital. Higher gold price-related royalties and Pogo tariffs assumptions have also contributed.
The company outlined more than A$2.3 billion of capital for FY26 across its projects and exploration.
Final thoughts on the Northern Star Resources share price
Clearly, investors didn’t like what they saw in this update. With how the gold price has soared over the last two years to more than US$3,300 per tonne, it’s a shame the gold miner can’t capitalise more from higher production.
The sell-off could be a short-term opportunity, if the gold price remains high. But, gold miners can come with operational risks, so it’s not the first commodity business I’d look to buy.
