Was Northern Star’s 6% jump about its results or a gold rally that lifted all boats?

However, the FY27 guidance is slightly soft on both production and cost, but nothing too material. The gold miner expects production of 1,500-1,650koz, though it added production will be weighted to the second half as a result of planned major shutdowns in the September quarter and the “measured ramp-up” of the expanded 27Mtpa processing facility at the Kalgoorlie Consolidated Gold Mine (KCGM).

The KCGM Mill Expansion was also a major focus for managing director Stuart Tonkin, who called it an “important inflection point for Northern Star” and a “significant milestone”.

“To enhance the quality of the portfolio, the KCGM Mill Expansion is expected to structurally reset the cost base and create a stronger platform for long-term value creation. The development of Hemi provides a further opportunity to strengthen the portfolio and underpin the Company’s growth profile,” Tonkin says.

“KCGM commissioning is underway with the tie-in of the existing 13Mtpa plant to the new 27mtpa mill expected in early September. While NST has yet to update FY27-29 throughput (23/25/27Mtpa), we assume a more conservative ramp-up beginning a few weeks late in September and model 18.2/25.1/27.0Mtpa over FY27-29,” UBS says.

“Grades and recoveries are expected to be subdued during commissioning, with Stage 2 commissioning from December ultimately supporting a move towards design recoveries of 83-85% (UBSe 84%).”

Key Results - FY26

• Revenue up 19% to $7.6bn, in-line with ests
• Average realised gold price up 26% to $4,925/oz
• Underlying NPAT up 26% to $1.8bn, with underlying EPS of $1.24 vs $1.14 ests (9% beat)
• FY26 dividend of 55cps fully franked at the upper end of policy vs 53cps ests (4% beat)
• $500m on-market buy-back with $129m completed to date
• FY27 group production guidance of 1,500-1,650koz vs. ests of 1,600koz (1.5% miss)
• FY27 AISC guidance of $3,050-3,450/oz (mid $3,250) vs $3,096 ests (5% higher)
• KCGM production guidance of 550-650koz reflecting early ramp-up, with output weighted to the second half

NST results or a gold rally?

Northern Star closed up 6.21% following the results announcement on Thursday, which on a quick glance would make it seem as though investors were wooed by the profit beat. But maybe it was actually something the U.S. Treasury Secretary, Scott Bessent, said that boosted the gold price?

In an effort to curb rising yields, the U.S. Treasury Department announced it would double its buyback of long-dated bonds from US$2 billion to US$4 billion.

“This increase in buyback operation sizes reflects Treasury’s desire to provide greater liquidity support in longer-dated nominal sectors where there is consistent strong sponsorship from market participants, as evidenced by the significant volume of high-quality offers Treasury routinely receives in longer-dated buyback operations,” Bessent said yesterday.

It was fairly effective, as the rates on 30-year Treasuries dropped around 10 basis points almost immediately. Unfortunately for the Treasury Secretary, investors restarted their bond sell-off and much of the previous day's gains have been erased.

Reacting to the bond moves, the price of gold surged back above US$4,500/oz. During trading on Thursday, the price improvement was reflected across the gold miners, with the S&P/ASX All Ordinaries Gold Index closing 8.39% higher.

What you might notice there is that the overall index outstripped Northern Star by a little more than 2 percentage points. Essentially, NST underperformed its gold miner peers. 

“FY27 guidance did little to build confidence in the 3-5 year outlook and we will have to wait for the arrival of the new CEO in October before multi-year guidance some time next year,” UBS says.

Board stoush

Elliott, which had previously ran an activist campaign against BHP, called for NST to conduct a strategic review and consider a sale. In response, outgoing chairman Michael Chaney said the board acknowledged the “share price performance of Northern Star this year has not met our expectations and we recognise shareholders’ concern”, but pushed back on the proposition of exploring a sale.

In the months since, Elliot has increased that stake to around 5.6% and last week sent a letter to both the NST board and media seeking a board refresh. This included putting forward six potential replacement directors for the company.

“Over the past several years, Northern Star’s total shareholder return has severely lagged that of its peers. This gap is a reflection of execution and governance failures over this period, not the quality of the Company’s assets or the people who mine them,” the firm said.

Chaney again dismissed Elliott’s push, saying NST had engaged with the investor for months but they had “made demands to which no responsible Board would agree”.

Given the relative underperformance against the other gold miners, it’s unlikely the FY26 results will assuage Elliott’s concerns.