Key Highlights

  • KCGM output for the 2027 financial year is expected near the lower end of guidance of 550,000 to 650,000 ounces.
  • In October, KCGM produced 15,300 ounces from 766,000 tonnes processed.
  • Intermittent problems with the mill's motor-control systems have been addressed, with minor rectification work on other equipment continuing.
  • Group guidance of 1.5 to 1.65 million ounces sold has been retained.

Northern Star Resources (ASX:NST) said on 9 November 2026 that it expects gold production from its Kalgoorlie Consolidated Gold Mines (KCGM) operations to finish near the lower end of guidance for the 2027 financial year. The company blamed commissioning issues at the expanded processing plant.

KCGM's guidance remains 550,000 to 650,000 ounces, with the final outcome depending on how quickly the plant ramps up. In October, KCGM produced 15,300 ounces from 766,000 tonnes processed, which Northern Star said was below plan.

What went wrong

Plant availability and throughput were affected by intermittent problems with the mill's motor-control systems, which the company says have since been addressed. Minor rectification work on other equipment is continuing.

Northern Star said plant performance showed greater stability in early November, with improved availability and higher average throughput, although it did not provide updated production figures for the month.

Chief Executive Suresh Vadnagra said specialist technical teams and equipment suppliers were working through the remaining issues. He said commissioning had not progressed as smoothly as the company would have liked, but that it did not consider the remaining issues to be fundamental and was focused on establishing stable, reliable operating performance.

Why KCGM matters

KCGM, centred on the Fimiston Super Pit in Kalgoorlie, is one of Australia's largest gold operations and a major part of Northern Star's portfolio. The expansion is designed to lift processing capacity from 13 million tonnes a year to 27 million tonnes a year by the 2029 financial year.

When a plant of that scale underperforms, the effect on group output can be significant. A month at 15,300 ounces is well below the run rate needed to reach the guidance range, which implies that production will need to rise substantially over the remainder of the year.

Mining is not the constraint

Northern Star said Mining at KCGM's open-pit and underground operations remained in line with plan, and that higher-grade ore inventories continued to build. That suggests the problem lies in processing rather than ore supply, and that stockpiled ore could support higher output once the plant stabilises.

Group guidance retained

The company kept its group guidance for the 2027 financial year at 1.5 to 1.65 million ounces sold, with production weighted towards the second half. Retaining group guidance despite KCGM's slow start indicates confidence in other operations, including the Yandal and Pogo production centres, and in KCGM's recovery.

Vadnagra became chief executive on 5 October and, as previously reported, has flagged potential asset sales as he reviews the portfolio.

Hemi progress

The update also covered the Hemi Gold Project in Western Australia, which has received primary federal and state environmental approvals. Secondary approvals, groundwater licences, management plans and land-access arrangements remain outstanding, and a final Investment decision is targeted for late in the 2027 financial year.

Risks

Commissioning problems can persist longer than expected, and a second-half weighting leaves less room for further setbacks. The absence of November production figures means the improvement remains qualitative for now.

The KCGM expansion is one of the largest gold processing projects in Australia. Plants of this size typically take months to reach design throughput, and commissioning problems with control systems, mills or conveyors are not unusual. What matters to investors is whether the issues are resolved quickly enough to keep annual output within guidance and whether operating costs rise as a result. Northern Star has not changed its cost guidance, but slower throughput usually lifts unit costs because fixed costs are spread over fewer ounces.

What comes next

Northern Star's December quarter report will show whether KCGM's throughput has recovered and whether the low end of guidance remains achievable. Progress on Hemi's secondary approvals is the other milestone to watch.