NST, Australia’s largest gold miner, has been hit hard this month after flagging softer-than-expected March quarter production, driven by milling issues at the Kalgoorlie Super Pit (KCGM) and weaker mining productivity, particularly at Jundee. The company reported Jan–Feb gold sales of ~220koz, but operational challenges have weighed on output, with throughput at KCGM running close to practical limits, making it difficult to maintain consistent production levels. Disappointingly, NST had already cut FY25 production guidance in January, reflecting these pressures.
- Traders often say buy the 3rd downgrade, which doesn’t bode well for NST just yet.
Longer term, the outlook remains constructive, with the KCGM Mill Expansion Project on track for commissioning in early FY27, which should lift processing capacity and improve operational flexibility. In the meantime, the company is reviewing operations at Jundee to prioritise higher-margin ounces, with further clarity expected in the March quarterly update on April 22.
At MM, when looking for the ideal way to invest when a sector bottoms, we prefer to buy the stronger names that have been dragged down by sector/ETF selling as opposed to the ones that have fallen hardest following internal bad news.
- We see no reason to catch this falling knife until the company can restore investors’ confidence.
MM is neutral towards NST around $20.50
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