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Northern Star Resources has approved a long-awaited $1.5 billion expansion to its Fimiston Mill in the Western Australian Goldfields, paving the way for the miner to join the world's top five gold producers.
Key points:
- Northern Star Resources has approved a $1.5 billion expansion to its Fimiston Mill in Kalgoorlie
- The expansion will more than double the miner's processing capacity to 27 million tonnes a year
- Northern Star says the expansion will position it as one of the world's top five gold producers
The expansion of the mill, which forms part of Kalgoorlie Consolidated Gold Mines' (KCGM) Super Pit, a subsidiary of Northern Star, is expected to more than double Fimiston's processing capacity from 13 million tonnes a year to 27 million.
The self-funded expansion is already underway and is due to be completed in 2026.
Northern Star managing director Stuart Tonkin said the expansion was the next step in maximising the mine's processing capabilities.
"This is absolutely a historic new chapter for these tier one assets and it culminated from the efforts to consolidate it through the joint venture and in the merger with Saracen," he said.
"Now it's time to evaluate the opportunities."
Backlog of gold
The 35-year-old Fimiston Mill has struggled to meet the output of operations in the area, which includes a backlog of about 120 million tonnes of pre-mined ore, estimated to hold about 3 million ounces of gold.
However, chief technical officer Steven McClare said the stockpile would be a "key feed source" for the new mill and provide certainty for the miner.
"If we stopped mining today, we could process that material and it would take more than nine years to actually get through that stockpile," he said.
"As we are continuing to mine in the open pit and underground, that stockpile continues to build."
He said production across the Goldfields would ramp up from 2027 to 2028 in order for Northern Star to reach its target of 27 million tonnes a year by 2029.
With the increased capacity, Mr McClare said the Super Pit was primed to supersede Boddington Gold Mine as Australia's largest gold operation and join it as one of the top five producers in the world.
"This investment today takes us to that next leg, to bring this asset to the top five global gold mines," he said.
"It really puts it in rare company."
Expansion 'overdue'
Melbourne-based gold mining consultants Surbiton Associates said greenlighting the expansion was an "overdue" but "good sense" decision.
Director Sandra Close said with the plans for the Super Pit to move from open-cut mining to underground, the stockpiled ore would give the miner time to plan for the future.
"They've been thinking about underground access for some time, particularly in some of the richest areas of the original old workings," Dr Close said.
"But given that they've got over 120 million tonnes of stockpiled ore to whack through the plant along with their current production, which they are doing about 450,000 ounces a year, it gives them breathing space to plan what they want to do underground."
Dr Close said whether the Super Pit was able to break into the global top five would depend greatly on what other operators did over the next five years, but she said Northern Star's projected output meant its ascension was possible.
"If they're going to do something like not quite a million ounces a year out of Kalgoorlie, that will certainly help them along that way," she said.
Housing hotspot
Northern Star said the construction and the expansion of the Fimiston Mill were expected to create more jobs and bring more workers into the region.
But with an already tight housing market, Chamber of Minerals and Energy CEO Rebecca Tomkinson said housing the growing workforce was a concern.
"We do know that housing is a very important aspect of how we support local communities, and absolutely at the moment we are going to need to do more in that area," she said.
"We are working collaboratively and alongside community organisations and with other organisations within the Kalgoorlie region to look at what else we can be doing to provide housing in the region."