In This Article:
Release Date: February 12, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Northern Star Resources Ltd (NESRF) reported record underlying earnings for the second consecutive period, highlighting the success of their profitable growth strategy.
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The company achieved a record underlying EBITDA of 1.4 billion for the first half of FY25, marking a 58% increase from the previous period.
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Northern Star Resources Ltd (NESRF) declared an unfranked interim dividend of $0.25 per share, with expectations for future dividends to be partially or fully franked.
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The company maintains a strong balance sheet with a net cash position of 265 million and significant liquidity of 2.7 billion.
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The KCGMill expansion project is progressing on time and within budget, supporting future production growth.
Negative Points
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The company faces potential operational challenges due to weather conditions in Western Australia, which could impact production.
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There are concerns about the ability to catch up on production delays, particularly in the congested areas of the Super Pit.
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The integration of De Grey Mining could present challenges, including potential impacts on capital allocation and operational focus.
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Lease liabilities have increased, partly due to new renewable energy projects, which may affect future cash flow.
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The company is cautious about extending the share buyback program, indicating a need to assess capital allocation priorities post-acquisition of De Grey.
Q & A Highlights
Q: Can you clarify the potential for the final dividend to be partially or fully franked and the possibility of extending the buyback? A: Ryan Gerner, CFO: We are moving towards a tax-paying position, which will allow for partially to fully franked dividends. The buyback program is independent of the De Grey acquisition and will be evaluated after the fiscal year-end.
Q: How are you prepared for potential weather disruptions in Western Australia? A: Unidentified Executive: The cyclone is primarily affecting De Grey. We have protocols in place, such as parking fleets and utilizing stockpiles, to manage wet conditions safely and efficiently.
Q: With the Golden Pike access delay, is there scope to increase production to catch up? A: Unidentified Executive: Catching up in mining is rare. We are managing the east wall well and expect favorable production from the high-grade pit floor over the next five years. However, the pit's limited real estate restricts the addition of more equipment.