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NEWS

Chaney names skills strains

by Fraser Palamara

lthough Northern Star Resources Ltd was able to meet its “This, I think, highlights the need for the board and
Aproduction guidance for FY22, chairman Michael Chaney management to be constantly focused on the long term and
said COVID-19 created difficulties in keeping staff on the not to be too distracted by short term fluctuations or demands,”
ground. Chaney continued. “It is providing superior long-term returns to
Speaking at Northern Star’s November AGM, Chaney said shareholders that drives us.”
it was an “understatement” to describe the past period as The past year has seen Northern Star make changes to its
challenging for the international gold miner. board, including appointing Rio Tinto Ltd senior executive
“The skill shortages facing resource companies in Western Marnie Finlayson as non-executive director.
Australia as a result of booming commodity prices have More creatively, Northern Star unveiled a $15 million retention
been well publicised and understood but this situation was plan in October which would take place over the next three
exacerbated during the year by the continuing COVID-19 financial years. The scheme was brewed to spend excess cash
pandemic,” Chaney told shareholders. “With many in our in keeping executives and management within the company.
workforce catching the virus or being forced to isolate,
absenteeism became a big management issue.”
Northern Star sought to remedy employment woes by
splashing cash at its over-achieving workers, but the company
soon found itself battling other hurdles thrown from left of field.
“We responded to this challenge by offering financial
incentives to our team to work additional shifts, resulting in
higher wage and salary costs; but our other costs rose as well,”
Chaney said. “International events – in particular the war in
Ukraine – resulted in huge rises in the price of essential inputs
like steel and diesel, along with supply-chain bottlenecks and
shortages.”
Despite such challenges, the ASX50 company was able
to post $1 billion in cash earnings, $1.5 billion EBITDA, and
$430 million in statutory NPAT. The company dished out an
increased $250 million in dividends to shareholders.
Northern Star was also undertaking a $300 million share
buyback scheme at the time of print. Michael Chaney
“The board concluded this was the most efficient way of
deploying excess capital at the present time,” Chaney Northern Star shareholders voted to approve a $1.8 million
explained. “I would hope this move sends a strong message; pay packet for managing director Stuart Tonkin leading up to
namely, that we are genuinely driven by our primary objective the AGM. Awarding Tonkin the 230,000 retention rights was
of providing superior returns to our shareholders.” conditional on the director staying with the company until late
On the production front, Northern Star met its guidance of 1.55- 2025 and to continue meeting financial guidance.
1.65 moz gold at AISC $1,465-1,575/oz. While the company’s Although shareholders overwhelmingly gave the thumbs up to
share price has grown close to 9% on the year, Chaney said Tonkin’s slice of the retention pie, up to a third of responding
he was feeling “frustration” due to an investor market driven by voters opposed the motion. Chaney attributed this rivalling
“short-term emotion rather than by fundamentals”. to retail investors who often resist giving large pay sums to
“During the last 18 months when the actual gold price in executives.
Australian dollars has consistently been in the mid-$2,000/oz On the horizon, Northern Star is seeking to commission the
[range], our share price has fluctuated by as much as 40%,” Thunderbox mill at its Yandal operations to push production
he said. to 600,000 ozpa gold while increasing production at its Pogo
Over the past year, Northern Star’s share price experienced operations – in Alaska – to 300,000 ozpa. For FY23, Northern
peaks as high as $11.48/share and valleys as low as $6.75/ Star has laid out a production guidance of 1.56-1.68 moz at
share. AISC $1,630-1,690/oz.

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