Northern Star CEO Stuart Tonkin: A fantastic time to be in gold

Stuart Tonkin says his company is 100 per cent leveraged to the precious metal at a great time in a bull gold market.

Northern Star Resources managing director Stuart Tonkin. Picture: Sharon Smith

CEO SURVEY 2025: FULL COVERAGE

Economy

How would you rate the momentum of the Australian economy as we head into 2025? Official forecasts have Australia trimming interest rates from the first half of calendar 2025, is that consistent with your view? What are you seeing around inflation in your own business?

We are 100 per cent leveraged to gold at a great time in a bull gold market. Our focus is on growing production, lowering unit costs and extending mine lives.

However, increasing gold prices are typically accompanied by higher cost inputs and this up-cycle had proven to be no exception. We are starting to see stability on costs – though they remain high across our sector.

We are always working on improving productivity across our business. We perform a lot of our underground, surface mining and processing activities in-house, allowing us to control scope and costs closer than being reliant on service providers.

We see value generation from our assets throughout a range of gold price and cost assumptions and have been deliberate in building a resilient and sustainable gold business.

Outlook

What excites you heading into 2025? Are you likely to increase, hold steady, or trim your investment spend?

It’s a fantastic time to be in gold. In Australian dollar terms, I see a strengthening of the gold price and sentiment given the tailwinds that include global geopolitical tensions, policy changes and broader inflationary pressures.

Northern Star’s strategy is to focus on factors we can control – and the gold price isn’t one of those – while growing responsibly without losing focus on generating superior returns for our shareholders.

We see the jurisdictions we operate in – Western Australia’s Goldfields and Alaska, US – as low risk and can confidently invest in growth across our long-life operations. This also gives us greater confidence to continue to invest in the future, whether it be on expanding KCGM into one of the world’s largest gold mines or pursing value-accretive acquisitions like De Grey Mining.

Reform

As we move into an election year, in your mind, what’s the single biggest lever that can/should be used to lift Australia’s competitiveness or productivity? This could be across any area from labour market, tax reform, training or other areas to encourage investment.

I think it is important for the federal and state governments to gain a consensus, bipartisan approach to energy policy that delivers the cleanest, cheapest and safest energy across a range of generation sources.

Industrial relations policies have deteriorated, in my view, to impede improvements in productivity. IR needs an overhaul and simplification to help businesses grow, employ more people and boost the economy.

It is important for governments to be consistent and transparent with their policies – capital is global and will go to where the best opportunities are. But we are in a pretty good place here in Western Australia.

I am concerned about the public’s limited understanding of how necessary resources are to improved standards of living. And this lack of understanding is often reflected in policy changes led by voter opinions.

There is also a great opportunity for the federal and state governments to work more closely on investing in infrastructure that can enable economic growth, particularly in regional areas. And we need to continue to take in skilled migrants.

Geopolitics

Will a Donald Trump presidency have a potential impact on your business or sector (tariffs or streamlined regulation)? Does geopolitics drive a bigger part of your decision-making?

We saw a bit of a pullback in the gold price immediately after the US election though I don’t think we’re going to see much retraction in gold in the coming years. I would expect the Trump Presidency to lead to trade tensions and increased US government spending, which is likely to support a strong gold price in both USD and AUD currencies.

The emergence of the crypto currencies impact is difficult to predict but I’m sure an ounce of gold will be worth at least 0.1 Bitcoin.

But as I have already said, Northern Star’s strategy is to focus on factors we can control – and the gold price isn’t one of those. We focus on growing production, lowering unit costs and extending mine lives.

We have deliberately positioned our business to be leveraged to gold price upside given our significant resource base of 61.3Moz gold at a modest gold price assumption of about A$2500/oz as well as our proposed acquisition of De Grey Mining, which will give us ownership of another world-class gold project in a Tier 1 mining jurisdiction.

People

Has your organisation’s approach to flexible working – including working from home – evolved during the year? Is this likely to change further into 2025?

Most of our team is deployed at mining operations across regional Western Australia and in Alaska, US, which by necessity limits opportunities to work remotely.

Having said that, we are constantly looking for ways to add more flexibility to rosters and work arrangements as part of our drive to attract, retain and reward our people alongside removing obstacles to productivity gains.

Technology

Where is your organisation along the AI journey – is it in the developmental stage, or are you now using the technology at scale across your business? If so, are benefits matching the promise?

As a relatively young and forward-looking business, Northern Star is heavily invested in technology including automation to make our mining operations safer, more efficient and better for all.

I am confident we will find a way to benefit from the fast-evolving applications of AI, most likely in more effectively using the significant datasets of our geological information. This, in turn, should enhance traditional techniques to assist our geologists in their work to find gold and compress timelines to process significant datasets.