Citi questions Northern Star investor communications as shares shed $2.2 billion on disappointing update

Northern Star Resources’ investor communications have been called into question after its shares plunged as much as 10.6 per cent on the back of higher costs and development spending tipped for the 2026 financial year. The gold miner disclosed on Monday it was tipping weaker-than-expected sales of between 1.7 million and 1.85 million ounces for the new financial year, and at substantially increased production costs of $2300 to $2700 an ounce. That compares to expected costs of $2100/oz to $2200/oz for the 1.63 million ounces sold in the 2025 financial year. Northern Star blamed the weak guidance on inflationary pressures, increasing development investment at its WA and Alaskan operations, and higher gold royalties. Northern Star’s expected capital development costs for 2026 are now forecast at as much as $2.2b. Jefferies analysts said this figure was about $1b more than they expected, while Citi analysts said Northern Star “needs to work” on keeping investors better informed. “In our view, NST needs to work on guiding the market,” Citi said, in particular citing the increase in capital expenditure. They said the addition of an $85m thermal power plant to KCGM’s mill upgrade that was discussed in Monday’s update “is news to us”. The update included a disappointing end-of-year performance by its Kalgoorlie Consolidated Gold Mines business, which is centred on the famed Kalgoorlie Super Pit. KCGM’s performance undershot revised guidance issued barely two months ago. While group gold sales met forecasts updated in late-April, KCGM contributed just 832,000 ounces for the 12 months to the end of June — short of the 850,000 ounces to 860,000 ounces projected on April 29. Shares in the Perth-based group lost 8.7 per cent to close at $16.80, giving up more than $2.2 billion in value. A number of other local gold miners joined Northern Star on Monday in lifting the lid on their FY2025 production numbers. Ramelius Resources produced 301,000oz for the financial year to edge past its upgraded guidance of between 290,000oz and 300,000oz. Costs were in line with guidance, marking the fifth consecutive year production and cost targets have been met, Ramelius stated. But investors were not satisfied, with the Mark Zeptner-led company’s shares losing 0.4 per cent to finish at $2.37. Fellow mid-tier Regis Resources said it produced 373,000oz for FY2025 to finish within the upper-half of its 350,000oz and 380,000oz guidance range. But costs and and outlook for the current financial year were not disclosed. It shares took a 1.6 per cent hit with the stock last changing hands at $4.40. Embattled producer Bellevue Gold, which had been losing money throughout the year despite gold’s record price, generated $67m of cash for the June quarter compared to losing $30m of cash during the March quarter. Bellevue’s shares finished up 1.6 per cent at 94¢. Its value has more than halved over the past year while the vast majority of its peers have recorded significant share price gains over the same period.