UPDATE: Northern Star Resources Ltd (ASX: NST) shares have plunged 10% to $23.99 in morning trade, marking a significant downturn for the gold miner. This sharp decline follows the release of an operational update that has raised alarms among investors.
The December quarter report revealed that gold sales were adversely affected by a series of isolated negative events at its operations late in the quarter. Total sales reached approximately 348,000 ounces, bringing the first half FY 2026 sales to around 729,000 ounces. This performance fell short of market expectations, prompting the company to revise its annual production guidance down to between 1.6 million ounces and 1.7 million ounces, a decrease from the previous estimate of 1.7 million ounces to 1.85 million ounces.
Management disclosed that this disappointing operational performance is expected to negatively impact cost performance as well. Specific cost figures will be provided in the quarterly results release scheduled for later this month.
What caused the drop in production? The report highlighted ongoing challenges at the Jundee and South Kalgoorlie operations, which collectively reduced production by up to 20,000 ounces. Additionally, unplanned maintenance and operational difficulties further hindered output.
At the Kalgoorlie Production Centre, December gold sales totaled approximately 203,000 ounces, while the KCGM operation sold around 110,000 ounces. This decline was primarily due to reduced throughput in the processing plant caused by a primary crusher failure that impacted production for four weeks. Although the processing plant is expected to normalize in early January, throughput may remain variable during the second half of the fiscal year as the facility transitions to a new expanded mill, slated for commissioning in early FY 2027.
At the Yandal Production Centre, December gold sales were approximately 91,000 ounces, reflecting weaker performances at both Jundee and Thunderbox. The recovery efforts at Jundee have taken longer than anticipated, with normal operations expected to resume in the March quarter. Meanwhile, Thunderbox faced challenges due to lower mined grades from the Orelia open pit and unplanned downtime related to carbon-in-leach tank failures.
Finally, the Pogo operation reported gold sales of 53,000 ounces, affected by lower mined grades stemming from underground mining dilution. The Pogo underground mine and mill operated at an annualized run rate of 1.4Mtpa during the December quarter.
With the gold market reacting strongly to these developments, investors are left questioning the future performance of Northern Star Resources. As the company prepares to release its quarterly results later this month, all eyes will be on its revised cost guidance and production forecasts.
Stay tuned for more updates on this developing story as Northern Star navigates these operational hurdles.
