Northern Star chief assures market Super Pit crushing bungle ‘rare’ after being left scrambling for staff

Northern Star’s CEO has defended the upkeep of an ageing Super Pit after a month-long plant failure, made worse by Christmas staff shortages, looks set to tip the gold major into negative cashflow for the quarter. The top brass at Australia’s biggest gold miner fronted analysts on Monday, revealing its primary ore crusher had failed just 12 hours after an impromptu fix-up job in early December that ultimately lead to a further two weeks of downtime. Northern Star shares were lashed on Friday after coming clean to a list of maintenance and plant failures across its KCGM, Yandal and as well as grade issues at Pogo that ultimately forced a cut to full-year production from 1700koz to 1850koz range to between 1600koz and 1700koz. Chief executive Stuart Tonkin maintained that the events of the disastrous quarter — which included fixing a wall slip, carbon-in-leach tank failures and crushing circuit issues at Jundee — were one-offs made worse by bad timing. Sourcing staff who could fix the faults at the Fimiston crusher also “took longer than expected” over the Christmas period, according to chief operating officer Simon Jessop, who said operations had resumed as of today. As for the balance sheet impact, NST’s chief financial officer Ryan Gurner forewarned the weaker gold sales for December combined with a $250m tax payment already committed for the period would put the miner into negative free cashflow for the period. It comes despite roaring prices for the yellow metal that are working in NST’s favour to buttress its bank of cash and bullion to the tune of $1.17 billion as at the end of December. But the market will have to wait until the formal quarterly update later this month assess any further balance sheet damage from the calamitous few months. Fielding questions about the performance of KCGM, NST’s chief executive Stuart Tonkin reassured analysts “it had been years” since the primary crusher last had issues, referring to incidents in 2021 and 2017. “It’s rare. It just happened to happened to be in our quarter two, very unfortunately.” But he acknowledged that determining how much to spend on older assets was “an eternal balance” and the issues at the Fimiston mill were why the miner had ultimately committed to a major $1.5 billion expansion project two years ago. “Mines like Fimiston, multi-decades in operation, Jundee’s just turned 30, Kanowna Belle bells just turned 30,” he said. “If you were driving a 30-year old vehicle around the roads, there’s a balance here between breakdown maintenance and sustaining maintenance. This is the eternal balance, you can see the hundreds of million dollars we’re spending on sustaining capital, we’re not underdoing it but trying to not overdo.” The faulty crusher meant Northern Star was about 650,000 tonnes behind its throughput schedule from its biggest producing mine during the December quarter, chief operating officer Simon Jessop estimated. That has put the miner’s gold sales for the half year at 729koz, meaning the pressure will be on Northern Star to pick up the slack in the second six months of the financial year to hit its minimum guided output of 1.6 million ounces. At the same time, the miner is readying to start commissioning of the replacement mill at Fimiston which the company affirmed on Monday was still on track for a July ramp-up. An extra 500 staff are expected to return to the Kalgoorlie site by mid-January to work on the project. Northern Star shares were up 2.13 per cent during afternoon trade to $24.95, clawing back some losses from Friday.