Gold mining heavyweight Northern Star Resources has quantified a significant hit to its operating costs, following a challenging quarter plagued by operational setbacks at its flagship Kalgoorlie operations. The update, delivered to the market on Tuesday, 20 January 2026, provided shareholders with long-awaited clarity, offering some relief despite the increased figures.
Revised Guidance and Operational Setbacks
The West Australian miner confirmed its cost estimates have been revised upwards. The forecast all-in sustaining cost (AISC) per ounce is now expected to sit between $2,600 and $2,800, a notable increase from the previous guidance band of $2,300 to $2,700. This represents an approximate 8 per cent rise when comparing the mid-points of both ranges.
This revision stems from a difficult final quarter in 2025, where Northern Star was forced to navigate multiple plant failures. The most significant issue was the failure of the primary ore crusher at its crucial Kalgoorlie processing hub. The breakdown occurred a mere 12 hours after an impromptu repair, ultimately leading to a further two weeks of downtime over the Christmas period.
Chief Executive Stuart Tonkin, in a call with investors earlier in January, noted that it had been "years" since the primary crusher last experienced major issues, referencing incidents in 2021 and 2017. He attributed other problems, including a wall slip and tank failures at the Jundee operation, to one-off events exacerbated by unfortunate timing.
Impact on Production and Royalties
The operational disruptions had a direct impact on output. Lower production and gold sales across its three key hubs—Kalgoorlie and Yandal in Western Australia, and Pogo in Alaska—have compelled the company to reduce its expected gold output for the 2026 financial year.
Compounding the cost pressure from lower production is the effect of soaring gold prices. While beneficial for revenue, these higher prices trigger increased royalty payments to the government. Northern Star estimates this will add an extra $40 per ounce to costs above what was initially budgeted.
Following these developments, the company's all-in sustaining cost for the December quarter climbed to $2,937 per ounce.
Market Response and Forward Outlook
Despite the negative cost news, investor reaction was surprisingly positive. Northern Star's shares traded in positive territory on Tuesday morning, rising nearly one per cent shortly after the market opened to $28.04.
The company stated in its market update that it had previously warned investors the plant issues were likely to impact annual cost guidance. "The company now has more information available to it to form a reasonably certain view of that impact and its materiality," the update clarified.
This detailed guidance provides the market with greater certainty, allowing shareholders to assess the full financial impact of the Super Pit's operational woes. The focus for Northern Star will now be on restoring consistent production and mitigating further unforeseen disruptions across its global portfolio.
