Northern Star shares hammered on another production downgrade
Australian gold miner Northern Star Resources saw its share price tumble on Friday after warning that achieving the lower end of its revised 2026 financial year production guidance will be challenging following weaker-than-expected operational performance over the past two months.
The company said its current “best estimate” is for 2026 production of above 1.5-million ounces, representing a further downgrade to expectations.
In January, Northern Star had already cut its original production guidance of 1.7-million to 1.85-million ounces to 1.6-million to 1.7-million ounces.
Gold sales for January and February totalled 220 000 oz, reflecting weaker-than-planned milling performance at the Kalgoorlie Consolidated Gold Mines (KCGM) operation and reduced mining productivity across several operating areas, particularly at the Jundee mine.
The company said maintaining required throughput levels at the existing mill at KCGM continues to present operational challenges, resulting in variable performance.
MD and CEO Stuart Tonkin said management was focused on ensuring the transition to new processing capacity was not compromised by efforts to meet near-term production targets.
“Front of mind for management and the board is that efforts to achieve the 2026 financial year forecast do not compromise the transition to the new plant and have negative implications for first quarter next year,” Tonkin said.
“Management’s focus over the next four months will be to set the company up to achieve its full potential from the start of the 2027 financial year and not on the achievement of short-term guidance above all else.”
The KCGM mill expansion project remains on track for commissioning early in the 2027 financial year, with about 800 contractors currently working on the plant and a further 400 on enabling works.
Until the expanded mill comes on line, operations will remain reliant on the existing processing facility, where throughput performance continues to fluctuate.
Mining volumes at KCGM remain strong, with run-of-mine stockpiles including about 100 000 oz of high-grade ore averaging 1.6 g/t at the end of February. This material is expected to be processed in 2027.
Meanwhile, Northern Star has launched an operational review at Jundee aimed at reducing costs and prioritising higher-margin ounces, including the potential redeployment of personnel and equipment to higher-margin operations during the June quarter.
Northern Star's stock traded 19% lower at A$21.75 a share.
