Northern Star Resources Limited

Good morning, and thank you for joining us today. With me on the call is the Chief Financial Officer, Ryan Gurner; and Chief Operating Officer, Simon Jessop.

As previously announced in the December quarter, gold sold totaled 348,000 ounces at an all-in sustaining cost of AUD 2,937 per ounce. A number of one-off operational events across our assets resulted in this softer performance and required us to revise FY '26 production and cost guidance.

With these events behind us, our team remains firmly focused on driving productivity improvements and strengthening cost discipline to deliver a stronger second half for our shareholders. Our FY '26 outlook provides revised guidance of 1.6 million to 1.7 million ounces of gold sold at an all-in sustaining cost of $2,600 to $2,800 an ounce.

Today, we also provide further detail for production and AISC guidance by production center. In addition, we have updated our capital expenditure forecast across the portfolio.

Operational growth capital guidance remains unchanged at $1.14 billion to $1.2 billion. KCGM's growth in capital expenditure in FY '26 consists of several projects designed to prepare the operation for commissioning of the newly expanded mill from FY '27.

And 2 aspects, which I'd like to highlight are the KCGM mill expansion project FY '26 capital expenditure is now expected to be in the range of $640 million to $660 million, and this reflects targeted increases in labor to ensure the commissioning in early FY '27. Also, the KCGM tailings dam activity is ahead of schedule with FY '26 spend now expected to be to $240 million to $260 million.

While FY '27 forecast spend is lighter at $100 million to $120 million, which this represents approximately 10% reduced cost for the overall tailings dam project. And at Hemi, forecast spend is $165 million to $175 million, reflecting more optimization of engineering and design works there.

Northern Star continues to work closely with state and federal regulators, key stakeholders and the broader Pilbara community. With gold price now exceeding AUD 7,000 an ounce, is an outstanding time to be producing and discovering gold in stable low-risk jurisdictions of Western Australia and Alaska.

Our balance sheet remains in a net cash position and as our hedge book decreases, our growing exposure to spot gold, coupled with increasing production, positions us for a very strong increase in cash flows going forward. I'd now like to hand over to Simon Jessop, our Chief Operating Officer, to discuss our operational highlights.

Thank you, Stu, and good morning. The Kalgoorlie production center delivered a lower-than-expected quarter driven by 2 main issues.

The first issue was the previously announced partial suspension of mining at our Kalgoorlie operation. A new escape way was mined and installed over 9 weeks.

Mining at Kal [ ops ] from mid-December has returned to normal operations. The second major issue was a lower-than-expected processing outcome at KCGM.

The mill underperformed all quarter on throughput volume both rate and run time with the primary crusher failing in December. Since the fifth of January, the crushing circuit has performed in line with normal expectations and we have crushed over 700,000 tonnes in 20 days versus December's full month crushing performance of 600,000 tonnes.

KCGM's total mining performance was an outstanding result with 207,000 ounces mined in the quarter, a new record for the site and a Northern Star Resources ownership. Open pit total material movement was $22 million for the December quarter and $45 million for the first half at the top of the 80 million to 90 million tonne annual guidance range.

The open pit for Q2 mined 163,000 ounces at 1.5 grams per tonne, with Golden Pike's contribution of 117,000 ounces at 1.7 grams per tonne. The KCGM underground operation developed 8.7 kilometers for the quarter and mined 819,000 tonnes of ore.

For the first half, the underground ore mined was 1.55 million tonnes above the annualized target of 3 million tonnes per annum. Due to the processing throughput issues, KCGM finished the quarter end with 1.3 million tonnes at 1.9 grams per tonne and 81,000 ounces of high-grade ore on the ROM pad.

CDO performed -- sorry, Carosue Dam performed in line with expectations for the quarter and the half. Let me close on the Kalgoorlie production center by again sharing that the KCGM mill expansion continued well over the Christmas, New Year period with a workforce of around 350 people.

The project has ramped back up to 800-plus personnel and for the remaining 6 months for final ores on construction and transition into commissioning and ramp-up planning. With the project remaining on time for an early FY '27 ramp-up.

Turning to our Yandal production center, both Jundee and Thunderbox experienced a challenging quarter and first half. At Jundee, the previously announced localized structural failure of the crushing circuit works have progressed well.

It has taken longer than it, but it has taken longer than anticipated. The Coarse Ore Stockpile Tunnel has been excavated, rebuilt and reburried with ROM pad loaders feeding the bin again as normal.

The full completion of the tunnel works is on track to be restored by mid-February. The Jundee team has actioned these works safely and professionally for an extremely large job.

The Jundee Airstrip is also less than 2 weeks away from its first flight and remains on track for flight savings and less rain interruptions going forward. At Thunderbox, 2 issues prevailed for the quarter.

The first one, reduced throughput due to tank issues, which also impacted recovery by 5%. Less mined ore from Aurelia and the haulage of the high-grade ore to the mill.

On the processing impacts, all tanks were back in operation at the quarter end with rectifications planned for H2, which will see us cycle through the 7 tanks. Secondly, on Aurelia, the resource is not performing as modeled in mined in the high-grade areas of the ore body.

We have already reduced the mining fleet from 17 trucks to 11 trucks in order to manage the required mining practice changes, improved mining and cost efficiencies. The Aurelia open pit strip ratio reduces from here on in.

Aurelia has an estimated life of 21 months and will generate 215,000 ounces at 1.4 grams per tonne. Meanwhile, open pit mining at Bannockburn ramped up significantly with first ore being stockpiled ahead of milling in H2, providing another ore source close to the Thunderbox mill.

Finally, turning our attention to lower gold sales was impacted by lower head grade of approximately 0.5 to 1 gram per tonne due to a combination of stock dilution and ore loss. Volume of ore was also approximately 30,000 tonnes less due to East Deeps span constraints on scheduled high-grade areas of the ore body.

And we've also lost about 3 days in December due to extremely cold temperatures below 40 degrees Celsius. Early in January, we have seen an improvement in mine grades above 6 grams per tonne and an increase in stope ore volumes.

Processing performance for Q2 was very good, with availability averaging 92% year-to-date. The recovery was 86% during the quarter, 5% higher than expected.

Development continued to improve at Pogo with 5.2 kilometers achieved for the quarter, corresponding to a monthly average of 1,731 meters a month. The quarterly performance on Gold sold was impacted by a number of significant events across the portfolio, which has resulted in lowering our annual gold guidance between 1.6 million and 1.7 million ounces.

We are in a much stronger position as we enter the second half of the year. KCGM and South Kalgoorlie operations have returned to normal.

Jundee has some outstanding issues that are expected to be resolved during this quarter and Thunderbox is in improved shape and at Pogo, we are seeing the December improved head growth continue into January. I would now like to pass to Ryan, our Chief Financial Officer, to discuss the financials.

Thanks, Simon. Good morning all.

As demonstrated in today's quarterly results, the company remains in a great financial position. Our balance sheet remains strong as set out in Table 4 on Page 10 with cash and bullion of $1.18 billion, and we remain in a net cash position of $293 million at 31 December.

The company has recorded strong cash earnings for the first half of FY '26, which is estimated to be in the range of $1.06 billion to $1.11 billion. A reminder that our dividend policy is based on 20% to 30% of cash earnings.

Although Q2 was a challenging quarter, all 3 production centers generated positive net mine cash flow with capital and exploration fully funded. Figure 8 on Page 11 sets out the company's cash and bullion movement for the quarter.

The company recording $738 million of operating cash flow, which included the semiannual coupon payment on the notes of USD 18 million, approximately $30 million annual insurance premiums. Additionally, during the quarter, the company paid $370 million of income tax being the first half tax payments of $437 million, lower than the first half cash tax guidance.

Major operational growth or capital investments include -- our KCGM open pit development at great Boulder and underground development at Fimiston and Mt Charlotte, which will enable us to lead production over the coming years and its Thunderbox operations open pit development at Aurelia and Bannockburn. In respect of the KCGM growth project, $180 million was invested during the quarter with major progress in structural and mechanical installation, including SAG and ball mill installation progress.

Electrical and piping installation is advancing with final construction fit-outs to follow throughout the second half. The project remains on track for commissioning early FY '27.

And our Hemi project, $20 million was spent advancing process plant design, securing long-lead-time items and progressing on non-processing infrastructure. On other financial matters, T-2 group all-in sustaining costs included approximately $20 million of additional costs associated with the disruption events across Jundee cooperations and KCGM during the quarter.

Half 1 depreciation and amortization is at the top end of the guided range of $8.75 to $9.75 around and is expected to lower over the second half the forecast increase in production. Noncash inventory charges for the group in the December quarter are a credit of $93 million, driven by lower grade stockpile build and higher ore stocks at KCGM and stockpile build at Thunderbox.

From a tax perspective, the update to second half production, we lowered our second half group cash tax forecast to $230 million to $270 million. No change to our estimate quantum or timing for landholder duty for the De Grey and Saracen transactions.

And the company continues to unwind its hedging commitments with 158,000 ounces delivered during the quarter. At 31 December total commitments equaled 1.1 million ounces at an average price just over $3,300 per ounce.

I'll now hand pass back to the moderator for the Q&A session. Thank you.

Stu and team. A couple of questions, I guess, on the CapEx, KCGM and then Hemi.

Just so I understand the increase in CapEx at the mill expansion. Is that about more people?

Is it about better people? Or is it about paying more, just so we understand, I guess, where the industry is at?

Yes. Thanks, Levi.

Look, it's targeted and deliberate and it's to ensure we meet the commissioning timing of that FY '27. So it's more people.

And it's recognizing, I guess, the productivity we've got out of the team that are there today and is not saying they're good or bad. It's just saying when everyone's working in that congested space.

We haven't made the progress on some of those things. So we were targeting around 600 people throughout the build.

Simon just spoke to, we retained about 350 over Christmas, which would normally be in a shutdown. And then we've also run some back shift, night shift throughout the last 6 months and also we've come up with 800 head count working on that project.

So it's targeted deliberate. It's at a cost.

Obviously, there's an uplift of about $110 million throughout this year, of which a large part of it is being spent in the first half. So there's a second half kind of tail out of all the electrical and cable runs.

But really, it's important that we meet the schedule on time and get that commissioning and get the cash box working.

Yes. Got it.

Thanks for the extra detail. And so could we have a little bit more, I guess, on that guard chart -- so what is actually involved between, I guess, now and what activity specifically?

And then I guess, what is required to hit 23 million tonnes in 2027?

Yes. So really, the commentary is above that.

We talk about in the bullet points there, this is on Page 5 of the quarterly. Obviously, 90% of all the structural steel and 80% of all the mechanical installation is complete.

So we're back to the timing in electrical cable runs and sort of testing and powering those things up. Obviously, there's an element of putting it all in place before you do any of that live testing and it's really, basically the final coupling of all the pipe work.

So -- we're well through the bulk of it, and it's in the right order. Nothing, I guess, is behind, but we're recognizing the work ahead just needs that additional waiver, which we're working with the contractors to source, and we were doing just prior to Christmas.

So December, we started to increase numbers. We continue with what we can call it a skeleton crew, we certainly 350 people throughout the Christmas period.

But really, it gets down to that final tie-in all the pipe work, pressure testing the cables, dead testing cables until we're ready to energize things. So yes, it's -- it will be ready to power up in June.

The question is whether we want the disruption. In the back half of June, typically, you won't get the extra gold sold, because it all has to come through the float circuit now through concentrates, et cetera.

So we may be bringing up in parallel. But ideally, in July, the mill is running.

The 23 million tonnes represents a 27 million tonne per annum plant turned on and then deliberately turned off to do retalking of balls and just visual inspections on wear rates, et cetera. That's deliberate planned downtime throughout the year, which derates from 27 million tonnes to 23 million tonnes.

But when it's running, it will run at the 27 million tonnes per annum. I think that answered part of your question.

Yes, that's good. And just 1 more on Hemi.

So what permitting is still a pretty complicated subject for us. Can you just give us a bit more detail around what stages up to now, what happens next?

Yes. So essentially, you got approval is still going through their processes.

This financial year, we're expecting there's no real way to fast track those processes with the regulators, and it's prudent that they take the time. In parallel to that, we're working on the water trials and dewatering testing and that's the engagement we're having the traditional owners and the like presently, but all those things are progressing as normal.

It's very -- as you imagine, weather-wise, it's the hot season. So laying pipe and doing works is a bit of a derated activity as we used to do in the Northern Territory.

Northern Pilbara gets pretty hot this time of the year. So there's some of that activity, we just sensibly laying pipe and getting the balls ready for that throughout these months.

But fundamentally, we're working towards the end of this calendar year to be in a position to be putting numbers together for FID. The extra expenditure is about the optimization work, just continually testing the flow sheet and making sure we've got options and that when we put the data into the FID papers that we've thoroughly thought of all those combinations.

And one of the things you just keep looking at, you keep finding options and can find better work. So they were using the time wisely in that regard.

Simon. I just wanted to revisit the underlying reasons behind the recent changes to production, all-in sustaining costs and I guess, also CapEx guidance for the 3 consecutive downgrades over the past couple of weeks.

And maybe at the same time advocates some greater disclosure from the company as well. So one of the reasons, for example, that was given that the production downgrade was the underperformance of Thunderbox, which has now sort of pitched to the 250,000 ounce mining center rather than a 300,000 ounce mining center.

And specifically, those lower grades you're seeing originate from the Aurelia open pit, so I was just waiting for the 600-page resource and reserve report. And I just can't find anywhere like a simple tonnage, grade and strip ratio outline for those key ore sources like Aurelia, like Bannockburn for, et cetera.

And the same goes for like Carosue Dam, Jundee, like the actual ore sources that sit behind these mining centers. So the comments made by Simon in his introductory remarks are helpful, gives us some of the pieces, but just like to have a really basic outline of the ore sources that sit behind the actual mining centers or at the very least a detailed Investor Day, where we can do some deep dives on these assets as well.

I just think that would be helpful to better assess the predictability of this business and the reliability of the forecasting that we received just a bunch of numbers from you guys at the head office level, just to go deep on these assets. So am I missing anything in that 600-page resource report that sort of helped with these sort of basic metrics?

No, but I'll take that as a comment, not a question, Ben.

Yes. Okay, cool.

Okay. The question then you've got a fair bit of scrutiny on your continuous disclosure obligations.

Why wasn't the crusher failure at KCGM immediately disclosed to the market. I would have thought that was a significant event in itself.

To paraphrase your response to the ASX, it was basically -- we didn't get the data until the first of January. How regular are your updates from site to the head office in Subi.

I would have thought that you're getting daily updates on simple metrics like production and sales, but -- is it weekly? Is it monthly?

I'm sure it's not quarterly, sure, you didn't have to wait until the first of January to now you're going to downgrade?

Ben, there's a very comprehensive response to an aware letter from AISC. A very simple one-page disclosure around production on the second of January and a very thorough response to the AISC's in regards to the query.

I think that addresses it.

Yes. Okay.

I mean I've read it several times, but from my perspective, I don't think it's satisfactory like would have thought you get real-time data on sales at least weekly or monthly, not quarterly, but happy to go and have [indiscernible]. Thanks.

Ryan, just one on the updated cost guidance. Look, obviously, good to see the revised cost guidance coming in line with the prior top end considering the gold price increases and royalties associated with that.

But if I break that down nominally, you've effectively tightened the range and the midpoint of cost is pretty much unchanged despite highlighting earlier this month that the operational impact. So we're going to have a number of cost impacts.

So I guess the question is, what operational and sustaining costs, if you'd be able to defer into next year to be able to keep that cost guidance flat?

Yes. Thanks, Hugo.

I think the key thing is that the one-offs and the events are behind us, and we know the impacts and effects of those events, they'll finite, they're complete. Obviously, we've disclosed on some of the continuing things are in the week 1 of January that are behind us now.

So really, this is the reset and the view of the forecasting of where the sites are operating at and the cost base has allowed us to narrow the guidance range because we've got 6 months ahead, not 12. So that's really where that is at.

It's a much stronger second half. If you really look at the what the second half will deliver a significant step up from quarter 3 in production.

You're seeing our realized gold price, it's improving, but it's still a long way off spot because of the hedges, which are -- which are unwinding rapidly and then obviously delivering into a higher spot. So coupled with increasing production, the gold sales being the denominator or all-in sustaining cost the exposure to that spot by the cash generation over the next 2 quarters and the run rate exiting this financial year for another structural change of Fimiston being turned on, positions the company into a very strong position.

So it is -- yes, it is future telling, it's forecasting, it's looking at what's in front of us. We would ask people to isolate quarter 3.

We have provided a very detailed information around the events that were unforeseen or some are out of our control, some are, were risk balanced around maintenance events. And ultimately, they have been addressed.

The team have done an absolutely fantastic job managing through that period and working on those items. And that gives us the confidence to place the forecast.

On the full year, yes, there's a step-up in cost, there's a step down in production. But when you look at the second half run rate, it's a very, very strong healthy business in that regard.

And then it can't undo what's happened in the first half, but ultimately, we've got a very confident outlook.

Obviously, taking sort of first half and the unforeseen impacts as they were, but sort of just to dig into that further, I mean, your AISC range is sort of now $4.4 billion to $4.5 billion for the year. It was $4.25 billion to $4.6 billion.

You've highlighted $40 an ounce of that or roughly $64 million at the low end is from royalties. So where some of those other cost savings come from though, are sort of looking forward?

And should we expect those costs to end up into FY '27?

I think it's Ryan, Hugo. I think the costs are there, obviously, in the immediate term, all costs are fixed.

So you're right to do the math on the overall, I guess, checks written in the business. What we're saying is as Simon was talking to when he spoke, a lot of these disruption issues that cause production issues are behind us.

We're confident in the grade outlook at Pogo, Jundee, Simon spoke about the high-grade material sitting on the ROM pad at KCGM, you've seen the grade list there. So -- and then also the throughput confidence in the second half.

So they all contribute to keeping it aligned and narrowing that cost range even with those, as you say, expected royalties. We're confident that in that range, '26 to '28 land us with our lower production profile.

Any discretionary spend will be shaft and pushed because it's not only is it dollar millions, but as far as activity and distraction, ensuring that the team have a very clear simplified sort of activity list. That's what we'll do.

So does that go push away into FY '27, we'll assess it at the time. We'll assess the balance of risk around planned versus unplanned maintenance, et cetera.

But there were items that were budgeted that we will just strike off the list that likely will not get spent in the second half.

Yes. Got it.

I guess the question was what are those items and how much of that spend. But maybe I'll pick that up later.

Next one, just around the upward revision of Hemi CapEx. You've called out a more detailed review of engineering design work.

So why CapEx this year is $25 million higher, but studies were originally to support an FID by the end of FY '26. So is that just a bring forward of detailed engineering works that you would have otherwise had to do?

Or were those not initially detailed enough for an FID timing as originally planned? And I guess, how should we consider that in the context of, I think, market expectations for Hemi CapEx now sort of $2.5 billion.

And should we continue to expect maybe there's a bit of creep there?

Look, I would say reset on the capital -- the overall CapEx number, saying if we're spending extra this year, it comes off the overall CapEx number. It's certainly work that's progressing.

It would be required, and we would be doing, but I'd also consider work that may have been spent where we consider, okay, that's redundant, and we replaced a bit new study work that's got an improved operating outcome or an improved flow sheet outcome. So I think we've got to be a bit careful of saying extra money spent this year comes off the total.

There are certainly items that were long lead items invested in spend forward that we'd also say perhaps we'll resell and repurpose and replace with larger simpler kits. So that's -- that's been something we've done with the time.

That will all come in a final kit paper on explanations in that regard. There's not material structural changes to the overall flow sheet.

What we've looked at is synergies with the rest of our operations to have common parts, common spares, which wasn't considered, when that's a stand-alone asset in a single asset company. We have looked at it through the lens of Fimiston mill expansion.

Some items that could replicate, save, on the engineering because you've already done it, but we've actually got to spend for the parts to get common commonality, which will derisk us in the future running to sort of sister plants.

Stu and team. Happy New Year.

A couple of questions from me, please. Maybe firstly, can I take the thrust of Ben Lyons' comments and maybe turn it into a question that hopefully we can actually answer on this call.

In the release, you say you've reduced CapEx spend at Pogo and Kalgoorlie and increased spend at Yandal to support the regional hub strategy. Can I just ask what is the regional hub strategy at Yandal?

Can you summarize it in terms of production ounces, life unit cost and how much capital needs to be spent to deliver it because I'm not really clear on any of those things, and it sounds like maybe there's other analysts that aren't clear either. So that would be appreciated.

Okay, Matt. So there's a 3 million tonne per annum plant in the north called Jundee and there's a 6 million tonne per annum plant in the South called Thunderbox.

Higher grade ore will go to Jundee, lower grade ore will go to Thunderbox. Jundee will sit at around 300,000 ounces per annum.

Thunderbox will sit at around 250,000 ounces per annum. So the hub, which is called Yandal will produce at about 550,000 ounces per annum.

That's different to the 600,000 ounces we have set we've articulated that 550,000 ounces is probably the happy place that, that will be at. It might oscillate, where Jundee does 250,000 ounces and Thunderbox does 300,000 ounces.

But overall, that Yandal belt we're saying can operate at around 550,000 ounces. We've got the reserve statements.

It's got all the trades and ore sources, [indiscernible], Aurelias, Wonder, you've got all the data that sits behind that. That's fundamentally what more than what any company is providing and giving to the materiality of what that asset provides for the group.

As the key aspect of those assets, but we're not liking at the moment is the costs. So the aspect of the economies of scale from expanding Thunderbox was to materially improve the all-in sustaining costs as you see growth at Jundee was to keep the costs down.

And you can see the cost we handle in the quarter and the lower ounce profile are very high. So that's in our head to say, what's the overall outlook life.

We've got to improve this to ensure that its contributions as it has been for a decade in our business, foundation asset. We can provide more view and color on what those can be.

But we're still building new high-grade mines, and the development rates are still contributing towards that. So pulling out a really up and talking about decimal points of grade of something that's not even providing 1/3 of the feed to Thunderbox for a number of years is immaterial.

And I want to focus on that. It's immaterial in the...

I mean I didn't specify Aurelia and you've answered the question on -- in terms of ounces and life. But as you point out, I think probably the gap in understanding is really more around unit cost expectations and also I guess, the capital required to get there.

So I suppose the question that probably the market has is what's the quantum of capital are you going to spend in order to get the cost to a certain point? And I guess what does that look like?

And I suppose we want that out load how do you make those investment decisions, when it seems like we don't have a good visibility on what the target is around cost and total quantum of CapEx?

So we provided production and cost guidance on an annualized basis in July. That's what we've done for a long time, and that's what we keep doing at Yandal.

We put in a base plan that's getting into the higher grade at Jundee, but you'll see some of the grade restore. All the commentary that sits around this asset shows the growth of Wonder down South, giving better grade into Thunderbox as well as new Bannockburn operation you're going through the stripping at the moment, getting to primary ore.

Like the question you're not going to answer on a quarterly call, let's put it that way.

No, that's fine. I guess the theme there is that I appreciate that you guys give 1 year guidance, but clearly, the impact to the market's perception of the company from arguably some of these short-term disappointments from quarter-to-quarter.

Potentially that impact is exacerbated because we don't have a multiyear sort of longer-term picture for some of these elements of the business. So obviously, anything you can do over time to just shown a light on that is appreciated.

But I'll move on to that line of questioning.

Before you do that, the point is in KCGM in the half 1, it's really, really changed and it's the mill throughput has really impacted the overall ability to deliver. All the other sum of the small parts on a materiality threshold are negligible.

But the actual...

I agree to you that's why I'm making the point that maybe you only give 1 year guidance is exacerbated.

Please let me finish this answer. Everyone needs to focus on that asset KCGM and there's 82,000 ounces sitting on the ROM of high-grade ore ready to put through that plant.

And the plant -- the new expanded plant will be commissioned in less than 6 months' time. So if everyone wants to weave into smaller items across all the assets, we recognize that it was a poor quarter.

We understand the elements that contributed to that. There were meaning and we understand what we've done to rectify it and what the outlook is going forward.

I pick up the frustration from the questions, and I'll pick up the frustration from investors or from analysts, who can't model this. Quarter 2 is behind us, and the second half outlook is strong, and we will work very hard to deliver that and where we position ourselves into FY '27 in an excellent position.

So I just want to reinforce we're getting into minutia, which is behind us and doesn't matter on a materiality threshold. So think about the things that make KCGM is a key asset -- that's where the focus and effort is today.

It's not on the satellite small life short things that are also generating significant cash flow that are actually contributed towards spending the capital at our long life by margin assets.

Thanks for the answer. Apologize for cutting you off to you.

I mean I would say that the Yandal hub is still going to be 1/3 of your business. So I'm not sure that it's characterized as minutia, but anyway, thank you for your response.

The second question is just on the KCGM new expansion, I guess, increases to the capital guidance there. You talked through in some detail around where that's going and why it's important to, I guess, the schedule -- is there a risk there that, I guess, throwing more money and people doesn't really solve the productivity issue you're having?

I mean you talked about how it is a fairly condensed space there that your teams are working in, I guess, what the question is why are you confident that spending more is the right approach versus just taking longer to complete the project?

So it doesn't solve the productivity issue. That's why you add heads.

Add head count because you can't achieve with the 600 people, so you tried 800 at it. That's the answer of productivity and you're paying more to get the same thing done.

That's why there's $110 million extra spend in this year to deliver that. The most important part is that to plant on getting all through it and step changing the asset's cost base and its revenue.

That time is of the essence with KCGM, not capital sadly, at this point. It's not sensitive to capital.

We don't likely spend $110 million, unnecessarily. We want to see this plant operating and starting to contribute.

Just to add a little bit to that. So during the next -- really, the next 4 months is where we've got the peak banning.

So we've ramped up, as you've said, above what was originally the plan and that sort of progression started during Q2 in terms of accelerating the work. We've got still many work fronts at the moment.

So we still have that opportunity to put those people in there 3, 4 months from now, those work fronts start to wind down. And we're very, very focused on the critical path, which is Stage 1, which is first ore into the new mill.

So while we still got the opportunity, we've taken that and the project team has to put the extra people in there get the work actually completed. And that's the picture right now, which gives us the ability to remain on schedule for FY '27, or like, ready to go in sort of June.

So if we didn't put those extra then, the work front start to dry up, and then it genuinely will be delayed. So the project is in really good shape.

It's focused on Stage 1 and that is first ore into the mill. The Stage 2 is moving Gigi back down to KCGM.

That can happen in the months after we're milling ore.

So obviously, a key theme of the call has been throwing a lot more bodies at the project to keep it on schedule. I understand that makes sense given the gold price and the project you're trying to keep on schedule.

But -- do you still expect that July turn on? I mean is the Gantt chart, I imagine the critical path, the turn on date, is it not shifting back?

Is it not wise given recent guidance and market disclosures is not wise to maybe start to push market expectations of the schedule of the turn on back? Or is this the expectation that this extra budget will keep the schedule to July?

It's quarter 1. My expectation is early quarter 1, sales there will be parallel running up at the plant.

This isn't about market expectations. This is about our disclosures had a 3-year build on time to the budget we're saying and overrun on that expenditure because we're growing more labor at it.

We're not here trying to gain this, Dan. We're here explaining, where we're at 2.5 years into a 3-year build.

And as Simon has got the confidence in discussing as well, we're very, very pleased with the progress they've made. And we're working very closely the contract that it's constructing it and looking for any opportunity to get this done, not only on time, but earlier.

And part of that combined solution is around adding head count. And we don't just add it, so they're standing around holding stop signs.

There are people there doing productive work. That's contributing towards that deadline.

So yes, that's what we're working towards. It's pretty exciting.

I think the team that got around the plant at Diggers and Dealers saw a massive step change year-on-year, if you went there again today, you'd say, well, why can't you turn it on now? That's what you visually see and it's no different than you're building a house, wait for your carpets and your fly screens.

All the cabling, all the tiling, all the final elements of that. It looks like it's been finished, and it looks like it's sitting there doing nothing, but it's that fine or final finishing, we're sure that when we get it turned on, the quality is met and the work is done so that we don't have to bring it down or we don't have to have those lessons that we learned out of the Thunderbox expansion.

We endured 12 months of ups and downs and rectifying some of those things. We'd like to see all that addressed prior to turning and commissioning this on.

So that's the way it's underway for the second half.

And I guess, obviously, there's a lot of focus on the call and obviously, concern about various aspects. But maybe pivoting and changing tack a little bit like just over the last 6 months or so, what is changing in the business that you can see that from a very positive sense, like what is something you'd rather like to invest is where there's been a change a foot or something that's getting better or be it exploration, be it a site?

What is changing in the business in a positive sense that you could highlight to the market?

Yes. I mean, I'd recognize the underperformance in share price against the peers, global majors, we acknowledge that.

We acknowledge that there's reflection on short-term production misses -- cost misses, and we've been very clear on the events that have contributed to that and what we've done to rectify that. Just look at the run rate of second half in its own right, very, very strong uplift in production.

Look at the reducing hedge book and realized gold price that we're growing the exposure to spot. And the step change of the business as a KCGM mill expansion turns on in FY '27 and the uplift, again, step change in production profile for the group.

They are the things that are psychoses to us that the opportunity for investors now to get in and get positioned, that's the confidence in the outlook. And I see, to your point, people are focused on hearing our concerns, they're looking at relativities.

That creates the opportunity to understand the long-term value creation that all the stars doing.

Just a question on the Hemi permitting side of things. Can you provide maybe a little bit more detail as to how that process is progressing?

Has there been any issues specific issues that are being flagged by the indigenous and Asian groups in that area? Or yes, just wondering, if you can give a bit more color as to any concerns that might have been raised so far?

No, no major concerns there. Milan.

It's really the dewatering trial is something we've got to commence, which will likely be at the start of quarter 4. Ideally, we would have done -- started that in quarter 2.

but there was a delay in getting all that infrastructure in place through the hot season. So once that's in place, and we've got a plan that's acceptable, we'll commence that trial.

It takes about 3 months, and that feedback loop goes into our [indiscernible] license for dewatering of the pits preproduction. So that's probably something that has slipped.

It doesn't affect the overall state and federal EPA approval licenses, which are continuing. But ultimately, that's probably the operational part that we would have liked to have seen commenced pre-summer.

And that's going to start March, April, likely we start for the modified scheme that we've negotiated. We're negotiating with traditional owners there.

Yes. And just in terms of the work that you're doing on optimization, any major changes regarding mine plan sequencing, et cetera, that you could share that's kind of been different from how that project was initially envisaged to be?

Yes, it's the scheduling. So what we're going to look at is First Gold pour and that deadline, even though if there's a delayed timing of starting to understand, okay, what impacts through to that.

But the actual flow sheet generally, we've looked at lots of different scenarios and options and defaulted back to what that primary flow sheet is with the high-pressure grinding rolls at the start and to the SAG mills is still sound. Resizing some of the gear mills, et cetera, is probably something we've done, the ability to expand later on a more simplified plant.

But all the auto class and late already in trying to be built and long-lead items like that are constructed. So that's all sound.

Mining sequence, again, just around water management, our borrower kits and getting that prepared. That's -- we've just got options and scenarios there as opposed to the 1 plan that previous owners had -- we just got a number of scenarios there that could go different paths to get to the same results.

So that's just what the team is doing, while the approvals are underway, iterating what they do best as the engineers.

And maybe if I can just squeeze 1 more in on Jundee. To get it to 300,000 ounces, you have to get quite a sizable uptick in the grades compared to the last couple of quarters at least.

Can you maybe just shed a bit of light at how do you -- how are you getting that increase in grades? Are you moving into a high grade part of the ore body?

Or is there something else that we should be considering there?

A mix of primarily the throughput is not Jundee. So yes, the average grade delivered to the plant needs to be there.

It's been there before. We've certainly got isolated pockets that are there different grades and different mining sequences.

We've just added a base plant, which allows us to go back up to the upper levels, regional high-grade areas and take those high-grade zones that were sterilized because they just open voids. There was no paste in the mine in its history, 30 years.

It's never had any paste backfill, but we've got that base plant installed and starting to fill those voids. We can go back and take those high-grade pillars out of those upper levels.

So there's areas like that, new Cook-Griffin mining zones contributing better grade. So all of those things contribute, but overall, it is a grade focus rather than a throughput of focus.

Just 1 follow-up for me. Just on Hemi.

I noticed you -- you noted that in May '26, you're going to have the optimized resource and reserves. I'm just wondering is there anything that we could be saying to see a quantum change in the resources or the reserves noting changes like gold cost assumptions, et cetera.

And likewise, for reserves around cutoff grade, et cetera. With your work integrating this into the Northern Star reserve and resources?

Yes. Thanks, Adam.

Look, I won't preempt things with R&R, there's still a fair bit of work to occur in the coming months leading into that, but we're basically release Hemi in a Northern Star view of [ R&R ] with the group's [ R&R ]. I would say Hemi had a high gold price assumption in what was previously released.

So we'll try and align with the group overall, where we set those gold prices for resources and reserves. They're almost irrelevant in regard to where the current spot price is and watching what peers are doing in gold price assumptions around resource and reserves.

But it does in turn reflect back to cutoff grades and how these overall picture valued and can you actually merge, mold our pits together, take our saddles and make a bigger or larger overall lower-grade resource economic. That's what we've got to consider.

But I would just say that we've probably got a stricter more scrutinized view around what's in and what's out. So if anything, a more robust scrutinize on that resource is more likely than material growth.

If you think about the drilling and the data that's occurring there, all we've really done recently is redirect some drills to do some treating. We haven't done any real growth drilling, since we're taking control of that heavy region.

Stu, and team. Stu you made a couple of comments with regards to Hemi.

You called it a sister plant to KCGM, and you talked about taking the opportunity to resize mills. Can you -- does that potentially mean a change in the scope of mill size relative to previously disclosed [indiscernible] numbers?

Can you -- can you help us understand that?

Correct. Ideally, things like the crusher, things like the mills ideally are identical to what we have at Fimiston and that's been currently our thinking -- there's already some mills purchased they're already sitting in a shared package stuff in or Port Hedland, literally seen them unloaded off the truck.

I look at those and say they'll do the job of a 10 million tonne per annum plant to get to a 15 million tonne per annum plant, I need a third one. What I consider instead of doing that, having 2 large mills today that match Fimiston, answer is usually, yes.

So be the sort of considerations we're doing to say, irrespective of earnings and hardware that's sitting there in a shared, would we start again in, say, 2 large mills that match Fimiston, plus the logic of that. In the scheme of reselling these things.

There's options that are there in a scheme of redundant expenditure, you can repeat the costs because you haven't installed them and they're ready to freight. That's the type of thinking that if you're in a hurry to build the mill, they would have got built and then when you want to expand, you add a new mill.

When we look at that now with the time, so well, let's just not go build something because we have to parts. Let's consider what we can do, if we had a clean sheet that's the example.

One is the crushing circuit, absolutely take the replicate design from Fimiston and say, is that something you could install here that's oversized and matches parts, et cetera, as opposed to going through the -- something that's been designed specific for the throughput rate of Hemi. And we go to something that is -- this is a plant to Fimiston -- that means, if we have issues like Simon had in December at KCGM, we could be fast tracking the knowledge and the skills and the parts across the business every 3 or 4 years would happen at 1 of those large crushing units.

All right. Thank you for joining us on the call today.

And I appreciate the interest and it's been a busy day for everyone, but looking forward to a strong second half and growing from here. Appreciate it.

Thank you.