Many in retirement are travelling comfortably, with three key factors contributing to their happiness – good physical and mental health and enough money to enjoy life.
Perhaps the assumption that markets are still anchored by predictable economic policies needs to be challenged. For the first time since the fall of the Berlin Wall, political volatility – once background noise – is potentially reshaping investment risk at a structural level.
Hemi project adds lustre to Northern Star’s gold operations
Northern Star Resources (ASX:NST) – the share price appreciated 30 per cent in the past year to close at $17.48 on Tuesday – is well placed for a transformative 2025 financial year as the West Australian gold miner balances significant capital investments with its commitment to shareholder returns.
The headline act in this transformation is the recently announced acquisition of De Grey Mining, owner of the Hemi project, one of the world’s largest undeveloped gold projects in WA’s Pilbara region, for about $5 billion.
De Grey is developing the Hemi gold project that has an estimated mineral resource of 264 million tonnes at 1.3 grams a tonne of gold for 11.2 million ounces. Over the first decade of the mine’s life, it is forecast to produce 530,000 ounces a year.
“The acquisition of De Grey is strongly aligned with Northern Star’s strategy and contributes to our purpose of generating superior returns for shareholders,” Northern Star managing director and chief executive officer Stuart Tonkin said.
“De Grey’s Hemi development project will deliver a low-cost, long-life and large-scale gold mine in the Tier 1 jurisdiction of WA, enhancing the quality of Northern Star’s asset portfolio to generate cash earnings.”
The Henri act has a strong supporting cast, not the least of which is a high gold price that closed on Tuesday at $US2,842 ($AU4,543) an ounce. With investors expecting central banks to loosen monetary policy, gold becomes an inflation hedge, while a Trump White House can be expected to generate economic and geopolitical uncertainty, always a positive for this precious metal.
In a market update, Northern Star set a production guidance of between 1.65 to 1.8 million ounces for 2025, representing potential growth from the 1.62 million ounces achieved in 2024 – a standout year for the group with revenue of $4.9 billion, underlying EBITDA of $2,192 million and cash earnings of $1,805 million, all of which were at record levels.
Critical to Northern Star’s growth strategy is the $1.5 billion Kalgoorlie Consolidated Gold Mines mill (pictured) expansion project, which will require between $500 and $530 million in capital expenditure in 2025.
This investment represents a crucial phase in the company’s development, as the expanded mill aims to increase throughput from 13 million tonnes a year to 27 million tonnes a year by 2029, with the scale of this expansion underscoring the miner’s confidence in the long-term potential of its Kalgoorlie operations.
The Yandal operations are positioned for improved performance as the Thunderbox mill expansion reaches its designed capacity of six million tonnes a year in the second half. Production guidance of between 505,000 and 555,000 ounces reflects the operational improvements and increased throughput expected from this investment.
In Alaska, the Pogo operation has a predicted target of between 255,000 and 265,000 ounces. While the first quarter will see reduced output due to major works, the operation is expected to achieve steady-state throughput of 1.4 million tonnes a year from the second quarter onwards, marking an important milestone in the asset’s development.
Northern Star’s commitment to organic growth remains evident in its $180 million exploration budget for 2025. This substantial investment in drilling and development programs aims to further expand Northern Star’s already impressive resource base of 61.3 million ounces and reserve position of 20.9 million ounces, ensuring a sustainable production pipeline well into the future.
For shareholders, the fact their dividends came unfranked – the first half of 2025 is also expected to have the same outcome – was more than offset by a total 2024 payout of 40 cents, up 40 per cent from 26.5 cents in 2023.
The coming year will be crucial to demonstrate Northern Star’s ability to execute on its growth strategy while maintaining operational discipline. The company’s strong balance sheet and clear growth pathway provide a solid foundation for long-term value creation, despite the near-term impacts of the capital-intensive growth phase.
For shareholders, the investment thesis centres on the company’s proven track record of delivering on major projects and its strategic positioning in tier-one jurisdictions, suggesting that investor patience through this phase could yield substantial returns as these growth initiatives come to fruition.
