Northern Star Shares Plunge After Gold Output Guidance Cut

Shares of Australia’s largest primary-listed gold producer fell sharply after the company warned it may miss its already reduced production target due to operational problems at a key processing facility.

Northern Star Resources (ASX:NST,OTCPL:NESRF) said it now expects fiscal 2026 gold output to exceed 1.5 million ounces, below its earlier guidance range of 1.6 million to 1.7 million ounces for the year ending in June.

The company’s shares dropped as much as 17 percent in Sydney trading, its steepest decline since March 2020. The company’s market value fell by billions of dollars as investors reassessed the miner’s near-term outlook.

The downgrade marks the second production cut in two months. Northern Star had previously lowered its forecast in January from an earlier estimate of up to 1.85 million ounces after unplanned maintenance and operational challenges.

The latest setback stems largely from difficulties maintaining processing throughput at the Kalgoorlie Consolidated Gold Mines (KCGM) mill in Western Australia.

“It remains the case that the company faces significant ongoing operational challenges, particularly given the difficulty of maintaining throughput at required levels through the existing mill at Kalgoorlie Consolidated Gold Mines,” the company said in a filing as reported by Bloomberg.

The mill processes ore from the Fimiston open-pit mine, widely known as the Super Pit. as well as the nearby Fimiston and Mt Charlotte underground mines. The complex sits within Kalgoorlie’s historic “Golden Mile,” one of Australia’s most prolific gold districts.

Northern Star said weaker milling performance at KCGM reduced gold sales in the early part of the year. The company reported total gold sales of about 220,000 ounces for January and February.

Operational pressures are also emerging elsewhere in its portfolio. Northern Star said mining productivity has declined at its Jundee operation north of Kalgoorlie, prompting an internal review aimed at reducing costs and focusing production on higher-margin ounces.

The review could include redeploying personnel and equipment to other assets within the company’s portfolio.

The production setback has raised questions among investors about Northern Star’s valuation after a strong run in its share price over the past year. The stock reached a record high of A$31.96 in early March, driven by record gold prices that boosted profits across the global mining sector.

Don't forget to follow us @INN_Resource for real-time updates!

Securities Disclosure: I, Giann Liguid, hold no direct investment interest in any company mentioned in this article.