Northern Star Resources Limited

Good morning and thanks for joining us. With me today is Chief Operating Officer of Australian Operations, Simon Jessop; and Chief Financial Officer, Morgan Ball.

I am pleased to report quarter one production was 386,000 ounces at an all-in sustaining cost of A$1,54 an ounce. This stemmed from simplified portfolio with the divestment of Kundana assets completed during the quarter.

At the same time, our growth projects are preceeding well at our long life key production centers of Kalgoorlie, Yandal and Pogo. During the quarter, we outlined a clear five-year strategy of active portfolio management, designed to deliver superior shareholder returns by growing production to 2 million ounces per annum, lowering costs and extending mine lives in a responsible and sustainable way.

During the September quarter, we delivered a continued sector leading safety performance with our lost time injuries at below half the industry index. We have set a net zero greenhouse gas emission by 2050 target and we will provide greater detail of near-term decarbonization progress in a sustainability report published in the coming March quarter.

We maintained strong quarterly cash earnings of approximately A$170 million and our balance sheets sits at net cash of nearly A$500 million, which demonstrates the strength of the business and capacity to deliver consistent dividends and fund organic growth. We are on plan to deliver our full year guidance of 1.55 million ounces to 1.6 5 million ounces at an all-in sustaining cost of A$1,475 to A$1,575 an ounce.

As we grow production throughout the year and in future years to deliver 2 million ounces per annum by 2026. We highlighted in our guidance that this year is second half weighted, as we increase grades at Yandal and volumes at Pogo.

Simon will provide some detail on the Australian operations, but first at Pogo, we saw a softer quarter -- production quarter with 44,000 ounces sold. As scheduled in quarter one, we completed and commissioned the expansion works at the processing plant at Pogo to enable 1.3 million tonnes per annum throughput, which is key to delivering growth to 300,000 ounces per annum.

It was important that we continued this expansion work despite COVID impacts with labor. But we experienced extended unplanned downtime with failure at the primary conveyor and commissioning ramp up.

The total impact of planned and unplanned works was 24 days no downtime during the quarter. Now with this work complete, our focus is on ramping up mining development and stoking volumes throughout FY 2022 and I extend my thanks to the Pogo team who continue to manage the associated impacts of COVID, whilst adjusting to the challenges to make the growth plan.

I would now like to pass to Simon to cover the Australian operations.

Thanks, Stuart. For the Kalgoorlie production center, including KCGM, Carosue Dam, Kanowna Belle and South Kalgoorlie, we sold 232,000 ounces of gold at an Australian all-in sustaining cost of A$1,533 an ounce, which reduced the mine operating cash flow of A$212 million and net mine cash flow of A$155 million after spending A$57 million on significant growth capital projects.

Of this mine growth capital total, A$40 million was spent on open pit mine development. Specifically at KCGM, the largest operating assets in the Kalgoorlie production center, open pit material movement was 18 million tonnes or an annualized movement of 72 million tonnes and a new quarterly record.

The first two new open pit mining trucks 793F Class were delivered and successfully commissioned, with further deliveries and commissioning to continue throughout FY 2022 as the entire open pit fleet is replaced. We look forward to the new haulage fleet having a positive impact, driving at lower open pit costs and improve productivity.

Underground mining delivered 1.6 million tonnes at an average price of A$2.6 grams per tonne per 134,000 ounces. The production centers processing capacity of 20 million tonnes is unlocking previously mine constrained resources and stranded high value stockpile ore.

KCGM underground operation at Mt. Charlotte is continuing to ramp up production as drilling is accelerated to understand these large opportunities.

Kanowna Belle also have mining improved tonnes at lower unit growth maximizing the already installed new infrastructure. The KCGM previously non-approved platform is on track to be finished in Q2, with drilling in this area to commence at the same time.

This is an exciting area to develop away from the mine pit and to the South of Mt. Charlotte.

KCGM processing volume was lower in quarter one, with planned grade volumes of the Fimiston and Mt. Charlotte service.

I will point out the Carosue Dam processing also achieved a new quarterly record 970,000 tonnes, which is a full 20% above mine grade capacity. Also in Carosue Dam a Stage II of solar farm was successfully commissioned, total solar power generation to 4.3 megawatts or approximately 8% of the site’s total power usage.

This is providing more than style with invaluable data for the long-term group direction in the green energy space. Moving on to the Yandal production center, including Jundee, Thunderbox and Bronzewing, we sold 110,000 ounces of gold at an Australian all-in sustaining costs of A$1,345 an ounce, which produced the mine operating cash flow of A$97 million and a net mine cash flow of A$62 million after spending A$35 million on growth capital projects.

The Thunderbox mill expansion is the key driver of the Yandal 600 to increase production to 600,000 ounces per annum and lower all-in sustaining costs. During the quarter, A$25 million of major growth capital was spent on expansion.

At Jundee operation continue with the strong performance and achieve the new record quarterly development advance of 6.6 kilometers during a quarter, providing future areas to exit ore. The open pit of Julius as part of Jundee’s satellite ore feet minded impressive 18,000 ounces of gold during the quarter.

At Thunderbox operation continued to invest in growth capital to pre-strip D Zone and the underground ramp up in production. I can say that the new price plan has now been fully commissioned and is pouring pace as part of normal underground production operation.

The Thunderbox mill expansion project saw the mobilisation of GR Engineering Services with the completion of major bulk earthworks including deploying of the SAG mill raft, approximately 780 cubic meters of concrete and it’s on track for commissioning in December of calendar year 2022. We’re very pleased for the commencement of this material growth project.

I would now like to pass on to Morgan Ball, Chief Financial Officer to discuss the financials.

Thanks, Simon, and good morning to all. As demonstrated in today’s quarterly, Northern Star remains an extremely robust financial solution.

As set out in table three on page six at 30 September, cash and bullion of A$756 million. Further, as noted previously, during the quarter, we utilize the funds from the sale of the Kundana assets to pay down our corporate bank debt.

As such, our net cash position at quarter end was a healthy A$494 million after ending the corporate bank debt of A$262 million. Bigger part on the same page, details of the company’s cash movements for the quarter.

Total cash bullion and investments of A$771 million, reflected a decrease of A$55 million following the payment of FY 2021 final dividend totaling A$110 million. After adjusting cash flow and one-off items, the company’s normalized operating cash flow for the quarter was in excess of A$100 million.

You will recall that following the finalization of our FY 2021 account, including the impact of the merger accounting, the company updated its dividend policy, which is now based on 20% to 30% of cash earnings generated. For this quarter, estimated cash earnings within the range of A$165 million to A$175 million.

From a consolidated group perspective, both production and costs are in line with expectations and we will see all-in sustaining costs reduced in the second half of the financial year as production increases. Gold sales for the quarter included 24,000 pre-commercial production assets, predominantly from the Thunderbox underground and data and open pit operation.

Pre-production ounces will decrease throughout the balance of the year as these operations achieved commercial production. As mentioned with the release of our FY 2021 accounts, you will note that fair value uplift relating to the merger accounting is reflected in the increased D&A and non-cash inventory charges to the group.

Table four on page seven sets out the company’s updated hedge position. The overall hedge book now stands at roughly 840,000 ounces with an average price of A$2,347 an ounce.

The book is 50% of our rolling three-year production profile. Pleasingly, the average hedge book price has increased A$61 quarter-on-quarter.

I will now pass you back to Tammy for the question-and-answer session. Thank you.

Hi. Good morning, Stuart and team.

I’ve got a couple of questions, maybe starting at Pogo, obviously, had a tough quarter. But looking forward, maybe you could talk to when the works were complete and how it’s actually performed since?

And maybe then to give us sort of an idea about when you actually see an operating at those targeted volumes, and obviously, targeted costs? And if you think there’s some possible to get down to that sort of circa US$150 per tonne for operating costs?

Thanks, David. So we’re very pleased despite where the production was for the quarter at Pogo.

We were actually very pleased with the works completed. So, the mill capabilities, that 1.3 million tonnes per annum with the producing sizes on site.

It was just dragged out longer than we had planned and obviously the fixing of the primary conveyor. So those things now had been commissioning and ramping up.

This year is really the focus is on the development underground and getting the start tonnes increased to try to meet and match that volume for FY 2023, which is key to getting to 300,000 ounces per annum. So FY 2022, we’re in still a building year and quarter-on-quarter building out that ounce profile.

So that one thing of the mill upgrade was going to be a bottleneck would address that. We plowed through in the seasonal weather throughout the summer to make sure that that was done and commissioned and now we’re able to replace those construction group people with production people in the mining camp.

Okay. Thanks.

Maybe just moving on to Carosue, obviously, great performance from the mill, it continues to sort of annualize sort of 10% to 20% above what that capacity was supposed to be. Maybe can you give us an idea, what’s driving that, is it sustainable going forward and what had been a thing of the constraints of actually keeping our full from the underground or open pit?

Yeah. Thanks, David.

Look, we absolutely see that sort of run rate of between 3.8 million tonnes to 4 million tonnes per annum as sustainable going forward. We built in some extra upside in processing plants as part of the design.

So it’s just maximizing and utilizing all of that installed capacity. In terms of failing that process plan going forward.

No issues at all. We have 28 million tonnes and 1.5 million ounces on reserves.

So we’ve got plenty of ore to feed the Carosue plant at that size or that truck.

Okay. Maybe just quick last one on the Fimiston underground, since the site visit, it sounds like things have gone a little bit slower.

Is that fair or I thought you would have been drilling already and might even have some sort of results for us? How should we think about, how you can report that going forward and how things are progressing?

No. So that, first of all, the drill drives, significant multi-kilometer drill drive, we’ve got one diamond rig sitting in there and we will have multiple diamond rigs sitting in there when the development crews come out.

So that’s setting up a multi-year drilling campaign for that one quadrant that kind of northwest quadrant of the Fimiston. So that will take quite a few years to build out that resource definition.

But it’s just progress that that hasn’t been seen in decades open pit. Mt.

Charlotte’s still ramping and producing well. It’s really the upside of expiration that securing at Fimiston.

And that isn’t in the plan for about seven years. Any phase from the Fimiston underground to get to 2 million ounces is not reliant on that.

There’s an opportunity there to define and evaluate the scale and size of what they can be.

All right. Great.

Thanks. I will pass it on.

Sorry, I was on mute. So, Pogo, I was just wondering if I could understand a bit more of what was happening in the mine.

And my impression is you don’t have a lot of stockpile capacity. So I imagine the mill outage and conveyor changeover meant that you couldn’t really mine as much.

I just trying to understand was the mine productivity on an underlying basis much better than the 840,000 tonne per annum rate implied by the quarter? Thank you.

Thanks, Daniel. And you’re accurate in as much as we don’t have the low grade stockpile over real estate to put broken all on the surface, like you do in Australia.

So we diverted our efforts to waste development and tried to maximize the waste development lost, the mill was down. And we also utilized trucking over the surface of the eight fleet at a lower throughput rate, whilst the main conveyor was down.

So when you talk about 24 months or 24 days out of the quarter, yeah, there’s about 25% of the quarter gone. So to normalize that back to an ounce profile, yeah, we did it as best we could do with the available days.

Different to the Australian operations where you can build a low grade stockpile, can’t do it there. But we’re investing in underground storage bins, developing those this quarter, which will decouple and give us some surge capacity for mine to mill on sit.

Okay. Understand.

I am just wondering if you could disclose the development meters during the quarter. I don’t see that in the report and would just be good to understand what was happening on a development right if you had a bigger focus on during the quarter?

Yeah. So that’s 3.6K, so 1.200 a month and we want to be at 1,500 meters a month.

Okay. Thank you.

And I noticed you’re very active on your hedge book. You delivered a lot, but also added more to the book.

Just what’s your strategy here and what do we -- what can we expect going forward?

Yeah. Daniel Morgan here, well, actually know that the hedging policies developed and understood and so we will always stay within that.

And the strategy really was increasing the price of the book at times when we see our pit capital spend that really just matching our operating cash requirements with some surety and risk management around as ore price.

Okay. Thank you very much.

I will pass it on.

Good morning, everyone, and thanks. Thanks for the call.

Just on the KCGM extension project, big belly driver sees I think during the June quarter. Can you just remind me what kind of work you are doing here, what’s the key inputs are and what we can expect to see along the way leading up until it sees?

Yeah. Thanks, Levi.

It’s Simon here. As we sort of outlined in the strategy document, we’ve got a couple of key options that we will run into ground.

So it’s all around simplifying the number of mills there. So we currently run five mills, one KCs to install one bigger mill, dropped to two dropped to four for 7 million tonnes, 8 million tonnes and then another KCs to go to 22 million tonnes with three mills.

So look that study is progressing very well. We’re certainly on track for December half, sorry, a June half update.

But that’s a material growth labor for us. But once we do have there, KCGM in terms of reserves, we’ve got 270 million tonnes of ore there.

So we want to try and realize the value from that as quick as we can. Even at the current processing, right, that’s sort of 20 years of processing and along with that, we see the opportunity to lower our processing costs.

Yeah. Thanks.

Thanks, Simon. And just at Kalgoorlie in the meantime, is that sort of processing, right, or the production rate we can expect going forward, plus the sale of Kundana?

Yeah. So we obviously saw the moment at the mill.

So we’ve got about 20 million tonnes regional capacity at the moment and that’s utilizing those and they’ve not phased around. So that’s still there, base extension projects are just the Fimiston expanding that.

So that’s where that extended capacity would be focused on and later the other mills alone.

Yeah. Thank you.

And just the last one on Thunderbox, I guess, tough environment to be building a new brownfields project, I guess. But what are the risks you’re seeing out there with the timelines for that over the next 12 months and what are you focused on to address them…

Yeah. So look pretty positive rewarded back in February, large mill and a lot of the units that go into it, great to have done a fantastic job, boots on ground and turning soil and getting foundations site.

So we’re really ahead of the curve on the progress there. We will be more comfortable when power through a port and sitting on ground, as you could appreciate.

So we will get it through one port, if not perimeter and we will be, yeah, still it will be probably the second quarter of next financial year when we’re working through that commissioning upward to buy on that. So we’ve got to be the buffer for the beauty with TBO is still running and producing at that 150,000 ounces undisrupted with this upgrade adjacent to it.

So it’s not a material gap or downtime if there was any slippage in time.

Got you. Thank you.

Thanks.

Yeah. Thanks.

Good morning, Stu and team. A few for me, firstly, I guess, operationally, at Pogo, we can say these recoveries in the quarter were a little bit softer, 84% for the September quarter.

Certainly, potentially that’s been partly driven by the lower head grade. Just wondering if there’s anything else that you would like to call out there in terms of what’s driven that to you and I guess, can we expect to return to 95%, I guess, as you’ve commissioned the additional milling capacity and potentially a return to higher grade feed?

Yeah. Good point.

Looks like banks generally like stability, so we have a ramping commissioning up and down. But we have losses there and that’s why that recovery is slightly down, as well as the point that you made on the head growth bit lower.

But the head grade will return to the reserve grade of 8 grams and as we get stability in the plant, we will return to the 90%. So I don’t know if we will get much more than that 90%, but 90% is what our current plans.

There are final projects to continue to do. We’re just getting the base load of that upgrade all completed and stabilized currently.

Got it. Thanks, Stu.

And then switching over to the KCGM, we can say that mine grades from the open pit were a little bit lower during the quarter. I guess you called out there, I guess, mine scheduling some restrictions in the amount of high grade material you could access.

Just wondering if there’s anything you can update us there on in terms of the war mediation progress, when are you expecting to access that high grade material in Golden Pike? And then also the delivery of the additional haulage fleet, has that been on schedule?

I guess you called out some of the timing there in terms of additional trucks. Just wondering whether that’s net your, I guess, your plan or your schedule for additional fleets?

Yeah. Thanks, Matt.

Simon here. In terms of the growth from the open pit, it’s really just timing and focus.

We mined a lot less out of Golden Pike during quarter one versus quarter four last year. So virtually 250,000 tonnes in quarter one versus sort of a 1 million tonnes of much higher grade in Q4.

So our focus really was on OBH and the cutback. So we moved a lot more ore out of OBH and really just prioritizing that due to the value that will unlock still in FY 2024 when Golden Pike North comes on stream.

So, yeah, no issues just timing of grade and scheduling of where we were mining the pit, cut back is tracking well, it’s on plan and we’re looking that’s our major priority in terms of pulling down the wall. Last question just in terms of the haulage fleet?

Yeah, last quarter we got two trucks. This month we expect to get another four or four on site.

So really it’s just the ongoing throughout FY 2022. No real issues there from our perspective, we’re in the probably luxuries position that ore supplies quite well ago and those trucks just coming through the system.

Great. Thanks for the info there, Simon.

And then, finally, a couple for Morgan, I guess. Firstly, you talked to the strong balance sheet position, just say A%500 million in cash and bullion, and as we know all things being equal, you should have better operational cash flows in the second half, given high production and lower all-in sustaining costs.

So I guess, firstly, can you remind us of the timing of any upcoming tax or stamp duty payments, I guess, related to the merger accounting or the Kundana divestment or anything else? That’s firstly.

And then, secondly, and more broadly, how do you think about the strength of the balance sheet given that net cash position and into the second half of the year where things should get better? I guess, what’s a comfortable level of cash and liquidity that you would like to retain and I guess what are your options beyond that or in excess of that?

Thanks.

Yeah. Thanks, Matt.

In relation to the cash and liquidity question first up, I think, we have guided to we like to have that A$1billion, A$1.5 billion liquidity assets and we have that well and truly at the moment. We would like to see about third of that in cash and so directionally, you will see it maintain that.

Sorry and the first question, Matt?

Tax timing.

Oh! Yeah.

Sorry, tax timing. So stamp duty, obviously, we’re still working through the valuation work and engaged -- and will engage with the Office of State Revenue on that.

We would expect Q3 of this financial year on the stamp duty from the tax perspective and I will of course put the pin down tax in that as well. Following the merger, we would have seen that in balances where we actually expect to receive a tax refund in the course of this year that would come in during Q3.

Got it. Thanks.

That’s helpful Morgan. That’s all for me.

Good morning, Stu and team, and thanks for taking my questions. Just a couple of quick ones from me, Pogo obviously had 24 days total downtime.

How much of that was unplanned?

10 days unplanned, 14 days was planned.

Okay.

So and look we persevered the team did the best they could do with reduced numbers if you appreciate KCGM, when we get a 14-day shot, we imported 900 extra people. In Pogo, we don’t have that luxury.

So we dealt with the teams that were there and we managed through those TB issues that you have when you upgrade plant. So, again, appreciate their time and effort to get it done.

But those extra 10 days obviously cost us in net production deferred.

Okay. Thanks for that.

And just another one for me, record material movements at the Super Pit, cannot be attributed to the two new machines rocking up during the quarter or does it come down to something else?

No. Look the luxury and the insurance we have as we already have the fleet albeit its age and the improvement of the new fleet will be lower unit costs and higher availability fewer machines are able to work.

So now, I think, it’s a credit to the team that they keeping the uptime and keeping things active and multiple working fronts that we have. So they’ve got optionality, they can go to the bottom, they felt prospect and got -- actually you can go to Fimiston South and just take the wheels turning.

I think it’s a credit to the way that we organized mine and keep volume to move.

Excellent. Thanks.

That’s all for me.

Good morning, guys. Stu, just a broader question on Pogo and the whole North American strategy and it’s clearly been challenging today.

I mean at what point do you think or how much runway do you need to give yourself to get this mine to 300 and then stabilize it before you become more confident in the whole operating model of potentially acquiring more assets in that part of the world? Thanks.

Thanks. We’re three years in and I think we’re a year like from where we want it to be.

And we’ve had see that the disruptions of the pandemic amongst to say, we have more active COVID cases of Pogos in the state of Western Australia just to put things in perspective presently. And we say FY 2022 is that build out year.

We’ve got the development to occur at a multiple stoping fronts to open up. We sort of been tracking of that 800,000 tonnes per annum or 900,000 tonnes per annum of ore.

We obviously need to build that out to 1.3 million tonnes to get to the 300,000 ounces. Critical part of that was getting the mill upgraded, which is now complete.

It’s really about getting those development meters in. But everything that we’ve done to-date in the reserves, in the infrastructure that investment, it’s for the long-term decade plus asset.

So we are still laboring on and still working on those key milestones to deliver that 300,000 ounce operation. So we’re pleased with the progress, albeit it is slower than planned, where we are too aggressive at the start.

In hindsight you might say those, but we still see great fundamentals in that asset. Growth beyond that, we like North America to see one jurisdiction like Western Australia and we see opportunities of assets over there.

You’re still seeing consolidation in the sector, but you still see high grade underground and all open pit operations that are available in North America. So we will keep our eyes on the wall.

And just on the WA operations, I mean, you’ve obviously got these targets in the medium-term and how far away are you from completing all of the optimizations on ore fleet, et cetera? There’s a bit of M&A going on at the moment small scale albeit, but before you would be ready to look at -- looking at maybe additional ore sources to plug gaps as they emerge or is that stuff that you sort of you think they’re already across and if things do pop up, you will have a pretty hard look at things?

Look we -- Simon touched on it. We had a significant stockpiled ore.

We’ve got out of 3.1 million ounces of stockpiled ore in our own backyard. So we will be utilizing and managing all of that in the first instance, something outside of that nature to look better or sooner than we had in our life of mine.

So we believe we’ve got everything to deliver our growth plans organically without doing any of that M&A. There are natural bolt-on things you always look at, but it always has to be at the right price.

So we just -- it’s more of a want the need and we will keep our eyes active on all of those things. But at the moment, plenty to do with our own portfolio and we’ve got a really solid team and we want to simplify the business as we’re continuing to do, so adding things sometimes like a simple.

Okay. Just one final one on more on post the sale of Kundana, I mean, those operations actually look like they’re going quite well from our numbers.

I mean is that that sort of release the handbrake a little bit on what you’re doing into KB and Millennium and that sort of stuff?

Look through the quarter we worked hard to transition Kundana well with the team to evolution. So I think that’s been managed and handled very, very well, but it does allow the bandwidth of the team to focus back on fewer things.

So we’re always just looking at where the best return for the capital invested. This quarter has been a strong quarter of commencing those growth projects, so don’t get discounting by the commencement of the TBO upgrade that we’re going to get at the end of 600,000 ounces in pretty short order.

But all of that waste movement and the volume increases at KCGM is paramount for long-term growth story there and obviously key upgrades what Pogo planned. These are all things to check off the boxes to show that they can grow up to 2 million ounces organically.

It’s not our main focus now to 25% uplift, 1.6 million ounces to 2 million ounces in five years. There’s not many peer gold companies with that organic growth whilst lowering costs out of it.

Okay. Very great.

Thanks, guys.

Good morning, Stu, Simon and Morgan. Just a quick one on Jundee, so getting rid of open pit ore contribution from Julius, can you just remind us for the reserves here and what the contribution will be to Jundee going forward from those regional open pits and you can kind of step through what other regional pits you’ve got coming online and how that kind of flow between the Jundee plant and the expanded Thunderbox mill?

Yeah. So Jundee for the North we will maintain at that 300,000 ounces.

It’s about two-thirds underground, one-third open pit that the reserve a bit more biased to the underground, so about 2.2 million ounces of reserves underground and 0.8 million open pit of ounces and sort of phase done through that 3 million tonne plant is about the same 2 million from the underground and about 1 million tonnes of open pit. So you will continually see like mine Julius, you see satellite pits build and ground contribute to that to maintain that 300,000 ounces, whilst we’re still got 15 underground diamond rigs at Jundee extending those persistent from the underground perspective.

So we see a long wall to be able to get of opportunity there and we keep nice new coming stockpile, so we’re not spending capital too aggressively ahead, we will keep that buffer of many times stockpile of open pit fleet, should you have any disruptions otherwise in underground base. Just to the second part of that the Thunderbox area by doubling that hedge book from 3 million to 6 million tonnes, it will a third from the design Thunderbox pit, third from the Thunder box underground and a third will come from satellite pit like a really half of that is done would base into that 6 million tonnes also get thrown out of that mill and to sale.

Awesome. Thanks, Stu.

Yeah. Thanks guys.

Most of the key ones have obviously been asked, but just wanted to understand with that -- with the change in trucks at KCGM, clearly you called out that that will help bring down operating costs. Just wondering if you can put any metrics around it yet as to if they’re delivering to the extent that you thought they might be able to or not yet statistically relevant?

Yeah. Thanks, Mitch.

Of course, this -- I think it is a transition of the old fleet out with the new fleet in, so it’s going to take some time for that to just stabilize and go through. But what we do see is with the F trucks, we see less downtime in the summer months, so there are done over heat on the ramp compared to the old trucks, as well as the new modern air trucks are actually a couple of kilometers faster than the older model phase.

So look it will take some time for that. It’s a big fleet that we’re changing, so it will take some time for the old fleet and the operating costs to wind down.

And the new equipment that’s fast and more efficient and a lower operating cost are really kicking. So it will just take its time to transition.

But we do see good upside once the fleet is all consistent and the same across KCGM, obviously, going on a mixed fleet. It’s a little bit difficult with fast trucks catch up to the slower trucks, so it’s probably FY 2023 onwards that we will really see some improve productivity, significant improve productivity from that fleet.

Okay. Thanks, guys.

Okay. Thank you very much.

Good morning, Stu. Good morning, Morgan.

Two questions, firstly, Stuart, just on cost headwinds, broadly speaking in WA, from the level of COVID impact still, but also other broader industry issues, how are you seeing? And now the second question, going back to the point about North America, Stu, when you talked about the attraction of the T1 jurisdiction and potential for opportunistic, potentially M&A.

Does Northern Star need paper in the North American market to execute on deals like that in the future?

Yeah. Good question, Peter.

So look from the domestic or even general labor costs and input costs, that’s probably where we’re seeing those headwinds in labor and turnover. The unnecessary cost of just churning labor that get fussy and flighty in this environment.

I still think within six months we will see relaxations of borders international and/or interstate with vaccines becoming prevalent, and therefore, that will relax some of that, as well as different commodities. So I will say, those cost inputs at the moment are layering in across the sector.

Fortunately, we have the synergies delivered from the merger, as well as the economy scale of the five production planned out that we can still reduce our all-in costs, despite some of those headwinds, that it means we offset some of those with the synergies costs. On the North American outlook and paper and the fact that as it doesn’t require equity and/or second dual listings or otherwise, look, what fewer questions are before were the balance sheet and the health of our balance sheet being net cash presently also funding on our growth capital of 2 million ounces, plus dividend paying, plus exploration resource reserve growth, plus surplus cash.

If we’re not buying something, we’re returning that for a special dividend or evaluating things like share buybacks and all of those other sources and uses of capital. The beauty is Northern Star has those options available to us.

So we can -- we reliably consider all of the capital management and my view is that we have a lot of capacity for debt, but we have a lot of free cash flow that in the future years will be adequate to good use to get superior returns and if we can’t find the superior returns, we return to shareholders.

Hi. Good morning, Stu and team.

I just have a follow up really on the cost base. Can you just remind me sort of how your diesel contracts are structured in terms of just timing lags based on where spot pricing is?

And then just roughly just on, I guess, on KCGM also, how much of that cost base is ore related?

I think to go ahead that is the diesel and the way we do diesel and it’s same as everybody else that they have run with no heating and no late or lag is as you bought. But I guess fortunately for the 8% of our production comes from underground, which is less diesel intensive, obviously, it has a large fleet that diesel intensive related to cost base.

So it doesn’t have a huge import or flux on it, that’s why we don’t try to hedge it or guess it. And all of that power primarily comes off grid or gas fed into our power plants at the moment as we’re transitioning to towards renewable type program.

So, with that, it’s not a massive lever or change or sensitivity driven. Thanks.

How many, I think, we’re -- any more questions?

Excellent. Well, thanks for joining us today on the call.

As you heard, it was a solid quarter at Australian operations and we incurred a couple of one-off issues at Pogo, which impacts their results there. Given the strong results been generated at the Australian operations and the fact that we will see the benefits of the investment made at the Pogo plant, we are well on track to meet our full year guidance.

We are also in the midst of an exciting expansion phase with significant organic growth projects commenced during the quarter at Kalgoorlie, Yandal and Pogo. Solid production to 2 million ounces per annum by 2026 and lower our costs, continue to generate significant cash flow and superior shareholder returns.

Have a good day.