Key Highlights

• For the quarter ended 30 September 2026, gold sales Revenue was A$1,819 million and net mine Cash Flow was A$210 million.

• Kalgoorlie sold 193,540 ounces at an AISC of A$2,919 per ounce.

• Group gold sold is guided at 1,500,000 to 1,650,000 ounces at AISC of A$3,050 to A$3,450 per ounce.

• In the September quarter the company spent A$221 million (A$141 million on the project and A$80 million on readiness).

What did Northern Star Resources (ASX:NST) tell investors about the balance between record-level gold prices, rising costs and heavy growth spending? The September 2026 quarterly activities report, released on 21 October 2026, shows a Business generating encouraging margins but absorbing large Capital commitments. The group sold 363,891 ounces at an All-In Sustaining Cost (AISC) of A$3,217 per ounce, realised an average A$4,999 per ounce, and recorded negative underlying free cash flow of A$31 million after A$113 million of corporate tax payments. FY27 guidance was left unchanged.

The central development: encouraging margins, negative free cash flow

For the quarter ended 30 September 2026, gold sales revenue was A$1,819 million and net mine cash flow was A$210 million. Group AISC was A$3,217 per ounce (US$2,244), all-in cost (AIC) was A$4,647 per ounce, and cash operating cost was A$2,460 per ounce.

Underlying free cash flow was negative A$31 million. The tax payments explain part of the shortfall, but the report also shows the scale of Investment under way. Cash and bullion at 30 September 2026 were A$1,200 million (cash A$968 million, bullion A$232 million), down from A$1,235 million at 30 June 2026. The company also drew A$500 million of bank Debt on 9 October 2026 to fund the FY26 final Dividend of A$0.30 per share, paid on 15 October 2026.

Operations by production centre

Northern Star operates three production centres. Kalgoorlie sold 193,540 ounces at an AISC of A$2,919 per ounce. It comprises KCGM (112,234 ounces at A$2,727), Carosue Dam (44,110 ounces at A$3,418) and Kalgoorlie Operations (37,196 ounces at A$2,911). Yandal sold 117,631 ounces at A$3,687 per ounce, made up of Jundee (48,998 ounces at A$3,670) and Thunderbox and Bronzewing (68,633 ounces at A$3,697). Pogo sold 52,720 ounces at A$3,260 per ounce (US$2,307).

FY27 guidance and capital intensity

Guidance is unchanged. Group gold sold is guided at 1,500,000 to 1,650,000 ounces at AISC of A$3,050 to A$3,450 per ounce. By centre, Kalgoorlie is guided at 850,000 to 970,000 ounces (A$2,800 to A$3,300), Yandal at 400,000 to 420,000 ounces (A$3,900 to A$4,200) and Pogo at 250,000 to 260,000 ounces (US$1,850 to US$1,950). KCGM is expected to sell 550,000 to 650,000 ounces. At 363,891 ounces, the first quarter is roughly in line with a mid-range annual outcome, though that is a simple run-rate comparison, not company guidance.

Capital spending is the swing Factor for free cash flow in FY27. FY27 sustaining capital is guided at A$850 to A$915 million, operational growth capital at A$1,150 to A$1,300 million, and total growth capital at A$1,700 to A$2,020 million. Total capital is A$2,550 to A$2,935 million, with exploration of A$230 to A$250 million; A$56 million was spent on exploration in the September quarter.

KCGM Mill Expansion and Hemi

The KCGM Mill Expansion is the main project to follow. In the September quarter the company spent A$221 million (A$141 million on the project and A$80 million on readiness). Total project spend to date is A$1,746 million against a forecast range of A$1.75 billion to A$1.81 billion. The legacy KCGM plants shut down on 21 September 2026 and the tie-in was completed on 28 September, about two weeks late. Stage II commissioning is scheduled for early in the second half of FY27 and is expected to add 1% to 2% to recovery. FY27 guidance for the project is A$350 to A$470 million.

Hemi remains at the decision stage, with a Final Investment Decision on track for late FY27. The company estimates Transaction Costs of A$200 million to A$250 million and expects cash tax savings of A$300 million to A$350 million in FY27 and A$200 million to A$250 million in FY28. FY27 Hemi growth capital is A$200 million to A$250 million.

Balance sheet, hedging and capital returns

Funding is substantial. The company has US$600 million of senior guaranteed notes due April 2033 at a 6.125% coupon, plus the A$500 million drawn facility. Undrawn corporate bank facilities were A$1,750 million at quarter end, rising to A$2,250 million with a new A$500 million tranche.

A A$500 million on-market buy-back announced on 2 April 2026 was in place, but no shares were bought in the quarter. At 30 September 2026 the company had 647,500 ounces of hedging outstanding at an average A$3,423 per ounce, and delivered 140,000 ounces in the quarter at A$3,278.

Sector position

Gold producers compete for labour, contractors and equipment. The company's own figures suggest the market will focus on whether growth capital converts into higher volumes and lower costs at KCGM over the next two years.

Risks and what to monitor

The main risks are the gold price and exchange rate, cost inflation, project delivery and operational disruption. Safety performance, measured by a 12-month Moving Average serious lost-time injury frequency rate of 0.5, is another operating indicator the report discloses. The late KCGM tie-in is a reminder that schedules can slip, and the report says Pogo's underground ore bin and haulage were expected back in service in late October 2026, so Pogo is worth watching. Ramone Mining is due to finish in the December quarter 2026.

Leadership has also changed: Suresh Vadnagra started as Managing Director and CEO on 5 October 2026.

Upcoming dates include the Annual General Meeting on 18 November 2026 at 1:30pm AWST, the December quarter report, KCGM Stage II commissioning and the Hemi decision. Investors can compare the second quarter's free cash flow with the first, after the tax payments fall away, to judge whether the capital programme is being funded comfortably.