Northern Star Resources : Quarterly Activities Report - December 2021

ASX: NST

ASX Announcement

20 January 2022

QUARTERLY REPORT

DECEMBER 2021

KEY POINTS

Environment, Social and Safety (ESS)

• LTIFR at 0.5 per million man hours
• Proactive steps taken across Australian operations to prepare for Western Australia border openings, expected 5 February; Pogo team continues to manage impact of COVID-19

Production

• Gold sold totalled 392,655oz at an AISC of A$1,631/oz (US$1,191/oz) and all-in cost (AIC) of A$2,069/oz
• By production centre:

• 1. Kalgoorlie: 244,915oz gold sold at an AISC of A$1,538/oz o Yandal: 102,163oz gold sold at an AISC of A$1,518/oz o Pogo: 45,577oz gold sold at an AISC of US$1,735/oz
• Kalgoorlie and Yandal continue to perform in line with expectations; Pogo delivered below expectations but is well positioned to increase 2H mining rates
• On track to meet FY22 guidance of 1.55-1.65Moz at an AISC of A$1,475-A$1,575/oz

Discovery and Growth

• A$150 million spent on net growth capital and A$28 million on exploration
• Key growth projects progressing in line with strategy to become a 2Mozpa producer by FY26, including KCGM open pit development (Kalgoorlie) and Thunderbox mill expansion (Yandal)

Financial

• December quarter average realised price of A$2,429/oz for sales revenue of A$950 million
• Cash and bullion of A$588 million at December 31; Net cash1 of A$288 million
• 1H22 Cash Earnings2 of A$425-440 million

Corporate

• Convertible funding agreement for C$154 million (A$169 million) with Osisko Mining Inc. (TSX: OSK), including an exclusive right to negotiate a 50/50 JV at Windfall gold project in Quebec, Canada
• Final US$70 million payment for the acquisition of Newmont Corporation's Kalgoorlie power business

1. Net Cash is defined as cash and bullion less corporate bank debt (A$300M)
2. Cash Earnings is defined as Underlying EBITDA less sustaining capital, net interest, and corporate tax paid

OVERVIEW

Northern Star Resources Limited (ASX: NST) is pleased to report operational and financial results for the December quarter 2021, with gold sold of 392,655oz at an all-in sustaining cost (AISC) of A$1,631/oz.

Figure 1: Group Gold Sales and AISC

koz			Yandal		Kalgoorlie		Pogo		AISC (A$/oz)	A$/oz
600	1,598			1,593	1,631	1,800
			1,600
500				1,459
									1,400
400				59	44	46	1,200
	40				1,000
300
									800
				273
	234		232	245
200				600
100										400
									200
	94		112	110	102
0										0
Mar Q 2021	Jun Q 2021	Sep Q 2021		Dec Q 2021

OUTLOOK

Northern Star's FY22 guidance of 1.55-1.65Moz at an AISC of A$1,475-1,575/oz is unchanged. As previously foreshadowed, gold production is weighted towards the second half of FY22, driven by increasing grades at Yandal and increasing mining rates at Pogo. As previously stated, AISC is expected to decrease in 2H.

Northern Star continues to take a proactive approach to managing COVID-19. Leaning on our experience at Pogo, where we had to respond quickly to the spread of COVID-19 and adjust our operating structures accordingly, Northern Star is equipped to leverage its operating flexibility to minimise expected disruption. We remain alert to the advice and requirements from State and Federal Governments and health authorities and maintain our focus on the health and well-being of staff and the communities in which we operate.

Northern Star's FY22 net growth capital and exploration guidance of A$710 million is unchanged. The Company's Five-Year Strategic Plan targets profitable production growth to a sustainable 2Moz per annum by FY26, with declining all-in costs.

Commenting on the December quarter performance, Northern Star Managing Director Stuart Tonkin said:

"We made further positive progress during the quarter to improve the safety performance across our three production centres, including the physical and mental well-being of our people particularly in this COVID-19 environment.

"Kalgoorlie and Yandal continue to perform in line with our expectations. Pogo made solid progress with development crews achieving 1,500 metres during December and the mill operating at 1.2mtpa (expansion completed in the quarter to 1.3mtpa, from 1.0mtpa). This provides confidence in Pogo's ability to deliver ounces in the second half and beyond.

"During the quarter we safely advanced our growth strategy towards becoming a 2Mozpa producer and entered into a convertible funding agreement with Osisko Mining that we believe has the potential to deliver significant value for shareholders.

"We remain on track to meet our FY22 guidance, which incorporates the current WA border closure and associated labour and cost impacts. Our experience at Pogo in Alaska has provided examples of the disruption we may face in WA and the mitigating actions required to reduce operational impact."

Northern Star's December quarter conference call will be held today at 9am AEDT (6am AWST). The call can be accessed at:

https://webcast1.boardroom.media/watch_broadcast.php?id=61dba67e4630b

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Table 1: December quarter 2021 performance summary - by production centre

3 MONTHS ENDING 31 DEC 2021	Units	Kalgoorlie	Yandal	Pogo	Total
Underground Mining
Ore Mined	Tonnes	1,594,899	969,040	213,668	2,777,607
Mined Grade	g/t Au	2.5	2.8	7.3	3.0
Ounces Mined	oz	126,385	88,567	49,985	264,937
Open Pit Material Moved	BCM	7,814,095	3,024,850	-	10,838,945
Open Pit Ore Mined	Tonnes	2,474,165	1,333,320	-	3,807,485
Mined Grade	g/t Au	1.4	1.1	-	1.3
Ounces Mined	oz	113,678	47,290	-	160,968
Milled Tonnes	Tonnes	5,187,945	1,437,871	255,112	6,880,928
Head Grade	g/t Au	1.7	2.4	6.6	2.0
Recovery	%	87	91	85	87
Gold Recovered	oz	242,289	100,726	45,727	388,742
Gold Sold - Pre-Production	oz	788	-	-	788
Gold Sold - Production	oz	244,127	102,163	45,577	391,867
Gold Sold	oz	244,915	102,163	45,577	392,655
Average Price	A$/oz	2,425	2,423	2,436	2,429
Revenue - Gold (2)	A$M	592	247	111	950
Total Stockpiles Contained Gold	oz	3,002,576	127,874	3,200	3,133,650
Gold in Circuit (GIC)	oz	36,995	9,671	5,856	52,522
Gold in Transit	oz	3,244	-	-	3,244
Total Gold Inventories	oz	3,042,815	137,545	9,056	3,189,416
Underground Mining	A$M	104	72	45	221
Open Pit Mining	A$M	44	18	-	62
Processing	A$M	115	31	30	176
Site Services	A$M	17	7	9	33
Ore Stock & GIC Movements	A$M	6	(22)	4	(12)
Royalties	A$M	17	7	-	24
By-Product Credits	A$M	(2)	-	-	(2)
Cash Operating Cost	A$M	301	113	88	502
Rehabilitation	A$M	3	1	1	5
Corporate Overheads (3)	A$M	14	6	3	23
Sustaining Capital	A$M	58	36	17	111
All-in Sustaining Cost	A$M	376	156	109	641
Exploration (4)	A$M	12	6	5	23
Growth Capital (gross)	A$M	53	77	22	152
Development Receipts	A$M	(2)	-	-	(2)
All-in Costs	A$M	439	239	136	814
Mine Operating Cash Flow (1)	A$M	239	76	10	325
Net Mine Cash Flow (1)	A$M	188	(1)	(12)	175
Cash Operating Cost	A$/oz	1,235	1,110	1,924	1,281
All-in Sustaining Cost	A$/oz	1,538	1,518	2,384	1,631
All-in Costs	A$/oz	1,795	2,319	2,976	2,069
Depreciation & Amortisation	A$/oz	784	680	573	734
Non -Cash Inventory Movements	A$/oz	192	(188)	21	73

1. Mine Operating Cash Flow is calculated as Revenue, less Cash Operating Costs (excluding inventory movements) and Sustaining Capital. Net Mine Cash Flow is calculated as Mine Operating Cash Flow less Net Growth Capital.
2. Excludes the impact of unwinding the hedge book fair value assumed as part of the initial acquisition accounting required in relation to the merger with Saracen. Revenue - Gold does not include Development Receipts.
3. Includes non-cashshare-based payment expenses in corporate overheads.
4. Excludes exploration spend at non-producing projects and regional sites (A$5M).

Pogo Operations costs are presented in AUD which is the Group's presentation currency. USD cost disclosure is presented in Table 11.

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Table 2: FY22 YTD performance summary - by production centre

6 MONTHS ENDING 31 DEC 2021	Units	Kalgoorlie	Yandal	Pogo	Total
Underground Mining
Ore Mined	Tonnes	3,192,456	1,708,373	423,882	5,324,711
Mined Grade	g/t Au	2.5	3.2	7.2	3.1
Ounces Mined	oz	260,494	177,638	98,073	536,205
Open Pit Material Moved	BCM	17,119,265	6,143,838	-	23,263,103
Open Pit Ore Mined	Tonnes	4,564,454	1,944,045	-	6,508,499
Mined Grade	g/t Au	1.4	1.2	-	1.3
Ounces Mined	oz	197,743	76,792	-	274,535
Milled Tonnes	Tonnes	9,982,838	2,930,020	463,616	13,376,474
Head Grade	g/t Au	1.7	2.4	6.8	2.0
Recovery	%	87	91	85	87
Gold Recovered	oz	467,160	209,202	85,854	762,216
Gold Sold - Pre-Production	oz	1,082	23,755	-	24,837
Gold Sold - Production	oz	476,157	188,252	89,569	753,978
Gold Sold	oz	477,239	212,007	89,569	778,815
Average Price	A$/oz	2,385	2,383	2,392	2,388
Revenue - Gold (6)	A$M	1,136	449	214	1,799
Total Stockpiles Contained Gold	oz	3,002,576	127,874	3,200	3,133,650
Gold in Circuit (GIC)	oz	36,995	9,671	5,856	52,522
Gold in Transit	oz	3,244	-	-	3,244
Total Gold Inventories	oz	3,042,815	137,545	9,056	3,189,416
Underground Mining	A$M	199	116	86	401
Open Pit Mining	A$M	77	21	-	98
Processing	A$M	238	54	58	350
Site Services	A$M	35	14	18	67
Ore Stock & GIC Movements	A$M	10	(17)	2	(5)
Royalties	A$M	31	12	-	43
By-Product Credits	A$M	(6)	(1)	-	(7)
Cash Operating Cost	A$M	584	199	164	947
Rehabilitation	A$M	6	2	2	10
Corporate Overheads (7)	A$M	29	11	6	46
Sustaining Capital	A$M	112	60	41	213
All-in Sustaining Cost	A$M	731	272	213	1,216
Exploration (8)	A$M	25	13	11	49
Growth Capital (gross)	A$M	112	168	27	307
Development Receipts	A$M	(3)	(55)	-	(58)
All-in Costs	A$M	865	398	251	1,514
Mine Operating Cash Flow (5)	A$M	450	173	11	634
Net Mine Cash Flow (5)	A$M	341	60	(16)	385
Cash Operating Cost	A$/oz	1,227	1,054	1,836	1,256
All-in Sustaining Cost	A$/oz	1,536	1,440	2,385	1,613
All-in Costs	A$/oz	1,816	2,081	2,812	2,000
Depreciation & Amortisation	A$/oz	764	572	577	696
Non-Cash Inventory Movements	A$/oz	215	(77)	31	120

1. Mine Operating Cash Flow is calculated as Revenue, less Cash Operating Costs (excluding inventory movements) and Sustaining Capital. Net Mine Cash Flow is calculated as Mine Operating Cash Flow less Net Growth Capital.
2. Excludes the impact of unwinding the hedge book fair value assumed as part of the initial acquisition accounting required in relation to the merger with Saracen. Revenue - Gold does not include Development Receipts.
3. Includes non-cashshare-based payment expenses in corporate overheads.
4. Excludes exploration spend at non-producing projects and regional sites (A$10M).

Pogo Operations costs are presented in AUD which is the Group's presentation currency. USD cost disclosure is presented in Table 11.

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ENVIRONMENT, SOCIAL AND SAFETY

There were 2 Lost Time Injuries (LTI) reported in the December quarter. Northern Star's Lost Time Injury Frequency Rate (LTIFR) is 0.5 (injuries per million man hours).

Table 3: December quarter 2021 Group safety performance

Term	Yandal	Kalgoorlie	Pogo	Group
TRI	0	4	1	5
TRIFR	2.1	4.5	3.1	3.5
LTI	0	1	1	2
LTIFR	0.0	0.5	1.5	0.5

OPERATIONS

Kalgoorlie Production Centre (KCGM, Carosue Dam, Kalgoorlie Operations)

Kalgoorlie sold 244.9koz at an AISC of A$1,538/oz (Sept quarter 232.3koz at an AISC of A$1,533/oz). Mine operating cash flowwas A$239 million. Net mine cash flow was A$188 million after net growth capital of A$51 million.

Kalgoorlie is performing in line with expectations with the focus on growth dominated by activities at KCGM.

KCGM sold 127koz at an AISC of A$1,344/oz (Sept quarter 116koz at an AISC of A$1,418/oz). Mine operating cash flow was A$143 million. Net mine cash flow was A$101 million after net growth capital of A$42 million.

At KCGM, open pit material movement was lower than in the September quarter run rate because of longer hauls from the bottom of the pit. Mining occurred across Golden Pike, Morrison, Oroya Brownhill and Fimiston South. The Golden Pike, Morrison and Oroya Brownhill ore zones were prioritised above bulk waste movement during the quarter.

The open pit fleet replacement program continued with a 994K loader and 12 x 793F trucks successfully commissioned and a second PC8000 shovel delivered to site for assembly. The PC8000 is assembled ready for commissioning during the March quarter. The 793F truck fleet replacement program is 30% progressed, with completion scheduled for the June quarter.

Ore processed at KCGM site processing facilities was 10% above the September quarter, with shorter shutdown duration, improved SAG mill utilisation and an improved processing rate. The head grade increased quarter on quarter with planned delivery of high-grade open pit feed. District milling continued with a further 117kt of Mt Charlotte free milling ore treated at Kanowna Belle and South Kalgoorlie Operations, which allowed increased milling of the large marginal ore stockpile to be processed at KCGM.

The KCGM mill expansion feasibility study continued with a market update anticipated in the June quarter 2022.

At Carosue Dam, ore continued to be sourced and processed from Karari - Dervish, Deep South and the Porphyry mining district. At Kalgoorlie Operations, ore was sourced primarily from the Kanowna Belle and HBJ underground mines during the December quarter.

Figure 2: Kalgoorlie Production Centre - Gold Sales and AISC

koz		Gold Sales (koz)			AISC (A$/oz)		A$/oz
300							1,800
250							1,600
						1,400
200							1,200
150							1,000
						800
100							600
50							400
						200
0								0
	Mar Q 2021	Jun Q 2021	Sep Q 2021	Dec Q 2021

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