Northern Star Resources Ltd (ASX: NST) shares are on the move on Wednesday.
At the time of writing, the ASX 200 gold stock is down over 3% to $22.88.
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Why are Northern Star shares falling today?
The company's shares are under pressure after delivering a mixed third quarter update that highlighted ongoing cost pressures.
According to the release, Northern Star reported gold sales of 381,000 ounces for the quarter at an all-in sustaining cost (AISC) of A$2,709 per ounce.
This reflects Kalgoorlie gold sold of 210,312 ounces at an AISC of A$2,550 per ounce, Yandal gold sold of 104,922 ounces at an AISC of A$3,347 per ounce, and Pogo gold sold of 65,573 ounces at an AISC of US$1,529 per ounce.
Guidance update
Importantly, the company reaffirmed its previously downgraded FY 2026 production guidance of above 1.5 million ounces.
This follows a revision earlier in the year, with its performance still dependent on mill throughput at its key KCGM operations.
At the same time, cost guidance remains elevated, with AISC expected to be in the range of A$2,600 to A$2,800 per ounce.
This represents a step up from early expectations of A$2,300 to A$2,700 per ounce.
Growth spending increases
Another key feature of the update is the continued rise in capital expenditure.
Northern Star now expects FY 2026 growth capital expenditure to be between A$2.315 billion and A$2.425 billion, with revisions linked to its major KCGM Mill Expansion Project.
Management notes that higher costs are being driven by factors such as poor construction productivity and cost inflation, which have pushed up spending requirements.
While these investments are aimed at supporting long-term growth, they are weighing on near-term returns.
Commenting on the quarter, Northern Star's managing director, Stuart Tonkin, said:
The March quarter demonstrated improved operational performance, with the Company forecast to deliver its revised FY26 production guidance of above 1.5Moz. As previously disclosed, this outlook remains particularly dependent on mill throughput at KCGM, with downside and upside potential. Our share buy-back announcement during the quarter reflects confidence in the strength of our business, the structural uplift in cash generation expected from the ramp-up of the new Fimiston processing plant and the compelling value we see in our share price.
The KCGM Mill Expansion remains on track for commissioning in early FY27. At the same time, our team continues to optimise the engineering and design of the Hemi Development Project while advancing approvals.
