12,178gpt intersection at Paulsens Maiden 2.5c fully-franked dividend for FY12 (3% yield) $65-85m surplus cash forecast for CY13 Resources to underpin +5-year mine life at Paulsens Clear strategy to grow group production to +200,000ozpa
Disclaimer Competent Persons Statements The information in this announcement that relates to Paulsens and Mt Olympus mineral resource estimation, exploration results, data quality, geological interpretations, potential for eventual economic extraction and estimates of exploration potential, is based on information compiled by or under the supervision of Brook Ekers, (Member AIG), who is a full-time employee of Northern Star Resources Ltd. Mr. Ekers has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2004 Edition of the "Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves". The information in this announcement that relates to Exploration Results, Mineral Resources or Ore Reserves in the Exploration section of this report is based on information compiled by Mr Jason Boladeras, who is a Member of the Australian Institute of Geoscientists (AIG) and Exploration manager and casual employee of Northern Star Resources. Mr Boladeras has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2004 Edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves. Mr Boladeras consents to the inclusion in the report of the matters based on his information in the form and context in which it appears. Information in this announcement that relates to the Ore Reserves has been compiled by Shane McLeay, Principal Engineer Entech Pty Ltd, who has sufficient experience relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2004 Edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves. Shane McLeay is a Member of the Australasian Institute of Mining and Metallurgy and consents to the inclusion in the report of the matters based on his information in the form and context in which it appears. Forward Looking Statements Northern Star Resources Limited has prepared this announcement based on information available to it. No representation or warranty, express or implied, is made as to the fairness, accuracy, completeness or correctness of the information, opinions and conclusions contained in this announcement. To the maximum extent permitted by law, none of Northern Star Resources Limited, its directors, employees or agents, advisers, nor any other person accepts any liability, including, without limitation, any liability arising from fault or negligence on the part of any of them or any other person, for any loss arising from the use of this announcement or its contents or otherwise arising in connection with it. This announcement is not an offer, invitation, solicitation or other recommendation with respect to the subscription for, purchase or sale of any security, and neither this announcement nor anything in it shall form the basis of any contract or commitment whatsoever. This announcement may contain forward looking statements that are subject to risk factors associated with gold exploration, mining and production businesses. It is believed that the expectations reflected in these statements are reasonable but they may be affected by a variety of variables and changes in underlying assumptions which could cause actual results or trends to differ materially, including but not limited to price fluctuations, actual demand, currency fluctuations, drilling and production results, reserve estimations, loss of market, industry competition, environmental risks, physical risks, legislative, fiscal and regulatory changes, economic and financial market conditions in various countries and regions, political risks, project delay or advancement, approvals and cost estimates. Page 2
Team with a track record Shares Options Total 424M 3.5M * As at Sep 2012 Share price: Market Capitalisation (ASX : NST) S&P/ASX All Australian 200 Index Undiluted Cash & Bullion (30 June 2012) A$1.05 ~A$445M A$75M Top 20: +50% Institutions 30% Board and Management 20% High Net Worth Individuals 20% Retail 30% Board - Successful record in discovering and developing mines BILL BEAMENT CHRIS ROWE PETER O CONNOR MICHAEL FOTIOS PETER FARRIS Managing Director (Mining Engineer) Non Executive Chairman (Barrister and Solicitor) Non Executive Director (Investment Fund Management) Non Executive Director (Geologist) Non Executive Director (Business/Corporate Advisory) DISCIPLINES TO OPERATE A MINING BUSINESS ARE COVERED Senior Management RAY PARRY BERNIE SOSTAK PHIL TORNATORA CRAIG JONES Chief Financial Officer General Manager Geology General Manager Exploration General Manager (Paulsens) MANAGEMENT CAPACITY TO CATER FOR COMPANY GROWTH Page 3
Northern Star: an abridged history Acquired Paulsens Gold Mine in WA from Intrepid Mines (TSX/ASX : IAU) : for A$40M in July 2010 At the time Paulsens had an eightmonth life based on a mine plan of 45,000oz Acquisition covered the eight-month cashflow, the asset was for free, replacement value A$100M Mine has been producing every year since 2005 at average rate of 70-80,000ozpa Extremely limited exploration undertaken in recent years Page 4
2011: the year of transition at Paulsens Repaid full A$40M acquisition from cashflow within 7 months Delivered record operational performance of 87,069oz recovered, 10% better than any previous year Cash cost A$588/oz (inclusive of royalties) and total expenditure cost A$742/oz Maiden Company profit of A$20M FY2011, even after A$40M in acquisition costs Delivered first resource upgrade to 226,000oz - an increase of 130% Discovered parallel quartz lodes, immediately adjacent to Paulsens mineralisation Established our own in-house mining services division, owner operator Page 5
Paulsens Productivity Drive Changed out Mining and Crushing Contractors with in-house team (Northern Star Mining Services Division) Increased our productivity by 43% in ore tonnes mined in the first full year, expect to improve again this year Dropped total cost per tonne by 20%, lowering the underground cut-off from 4gpt to 2.5gpt Enables the Company to mine a greater portion of the orebody, bodes well for feeding our expanded plant Recently de-risked the mine by installing a complete new mobile plant fleet Mining Services Division skill set is opening up business opportunities beyond Paulsens Mined Mining Cost/Tonne 120,000 100,000 80,000 60,000 40,000 57,703 57,755 Contractor 78,736 NSMS 87,517 83,260 107,970 $/t $140.00 $120.00 $100.00 $80.00 $60.00 $40.00 $98.76 $97.13 Contractor NSMS $71.90 $71.89 $84.15 $74.10 20,000 $20.00 - Q3 FY 11 Q4 FY 11 Q1 FY 12 Q2 FY 12 Q3 FY 12 Q4 FY 12 $0.00 Q3 FY 11 Q4 FY 11 Q1 FY 12 Q2 FY 12 Q3 FY 12 Q4 FY 12 Page 6 Source:
Profitability Growing Page 7
Balance Sheet Growing Page 8
2012: Strategy pays dividends.. literally June Quarter production of 19,000oz at A$646/oz (inclusive of royalties) On track to meet CY12 guidance of 75-80,000oz and A$35m surplus cash (after allowing A$15M capex) Increased Company profit by 57% to A$34.1M for FY2012 EBITDA FY2012 A$49.4M Declared a maiden fully-franked dividend of 2.5c Delivered two resource upgrades, taking total inventory to 403,000oz 1 180% increase Raised A$42.5M at 90c, lifting treasury to ~A$75 million Global institutions brought onto register Paulsens Resource Growth Page 9 Source:
Voyager 1: The Paulsens Engine Room Voyager 1 is the flagship lode at Paulsens and has produced all the gold under NST ownership Currently mining this lode 550m below surface. Mineralisation drilled to 850m and remains open at depth Lode runs at a rich 1,250 2,000 ounces per vertical metre Game changer emerged in Feb 2012 with the discovery of the high grade extension zone Drilling at this zone returned results of up to 2330gpt JORC resource grade in the zone runs at 25gpt First development ore from Voyager 1 Extn. intersected in Sep Quarter averaging 12gpt; production ore due in Jan 2013 Voyager 1 Mined to June 2012 170,000oz Average grade 8g/t Current Production Levels : 7-8g/t First Extension Zone ore intersected Average development grade 12g/t Voyager 1 Extension Resource grade 25g/t Page 10
Voyager 2: One of the richest intersection in Australian modern gold history Voyager 2 was discovered by NST in late 2010; host of stunning drilling results up to 12,178gpt Voyager 2 begins 650 metres below surface and sits immediately adjacent to Voyager 1 Maiden resource grade of 11.4gpt Opportunity to mine both lodes at the same time; no additional capital or level development required Voyager 1 Mined to June 2012 170,000oz Average grade 8g/t Current Production Levels : 7-8g/t Voyager 1 Extension Resource grade 25g/t Voyager 2 Page 11
Deep drilling: high-grade hits 325m below current workings Orebody has yielded 500,000oz over 400 vertical meters, 7 years of production so far Deep holes drilled in June to target ore body a further 400-500 vertical metres below current workings Outstanding results first up with grades up to 63gpt returned Results highlight potential to extend mine life well beyond 5 years Page 12
2013: The year of rising production, falling costs and increasing cashflow Key CY2013 forecasts @ Gold Price A$1,550/oz: Total production of 100-115koz Plant capacity expanded by 25% to 450,000tpa Average blended grade to rise 20% from 7gpt to ~8.5gpt Cash Costs C1 of A$610-690/oz (inclusive of A$40/oz royalty) Total Operating Costs C3 of A$850-950/oz Generating surplus cash of A$65-85 million Page 13
Exploration: writing the next chapter at Paulsens Part-way through A$20M exploration program, consistent stream of outstanding results No other deposit found within 50km radius of Paulsens mine, which is now approaching the 1Moz endowment Great opportunity as there has been limited regional or near-mine exploration for the past 10-15 years Over 100 targets already identified, drilling underway on the priorities, received outstanding initial results Page 14
Gabbro offsets: the gold may be as green on the other side of the fence Paulsens is bounded by a Gabbro unit, traditionally seen as a fence around the orebody Drilling aimed at testing the theory that the Gabbro unit is broken more than once, allowing quartz and mineralisation to be deposited on the other side Initial results support this theory with hits up to 14gpt; quartz outlined over 1,000m down plunge Results highlight potential to replicate the 850,000oz Paulsens quartz lode Drilling ongoing with more results pending 2.2mt @ 7.7g/t (540,000oz) PDU1766A 0.4m 13.9g/t 1067m RL PDU1766A 0.6m 11.6g/t 1095m RL Page 15
Ashburton a 100,000ozpa stand-alone operation Ashburton Project located within trucking distance of Paulsens Acquired in June 2011 for zero cash payment; royalty payable on production over 250koz Oxide open pit operation from 1998 to 2004, produced 340,000oz @ 3.3gpt JORC resource recently upgraded by 50% to 1Moz 3 Studies well underway on a stand-alone 100,000ozpa operation based on sulphide ore This will take total group production to 200,000ozpa Free-milling ore to be trucked to Paulsens plant Metallurgical testing underway on sulphide ore, initial results show +80% total gold recovery Feasibility on sulphide project is underway Resource in-filling and extensional drilling ongoing Page 16
Key reasons to invest in Northern Star Extremely strong cash generation from high-grade and high-margin ounces Growing production to underpin further growth in surplus cash (up to A$85 million CY2013) Sufficient resources to underpin +5 year mine life, with further extensions expected Exploration continues to return outstanding high-grade results at Paulsens and Ashburton Studies progressing rapidly on second 100,000ozpa stand-alone operation, taking group production to 200,000ozpa Cash balance of A$75 million and growing Maiden dividend declared of 2.5 cents full franked (books closed 5 th September 2012) Page 17
12,178gpt intersection at Paulsens Contact Details: Bill Beament Managing Director +61 8 6188 2100 Email info@nsrltd.com Website www.nsrltd.com
Appendix 30 Jun 2012 Measured Indicated Inferred Total Open Pit 573 2.5 169 2.5 742 2.5 61 Paulsens Upper Levels 136 7.1 32 5 168 6.7 36 Voyager 1 277 8.8 75 12.4 44 10.7 395 9.7 123 Voyager 1 Extension 64 20.0 39 33 103 25.0 83 Voyager 2 22 14.3 71 10.5 93 11.4 34 Paulsens Stockpiles 11 Belvedere 45 2.8 123 3.5 168 3.3 18 Merlin 523 1.4 523 1.4 24 Mt Clement JV 226 1.8 226 1.8 13 Total 277 8.8 915 5.5 1227 1.9 2418 5 403 Table 1 Paulsens Resources @ 2.5g/t Au Lower Cut-off Underground and 1.0g/t Au Lower Cut-off Open Pit Oz Au 31 December 2011 Proven Probable Total Open Pit 424 2.3 424 2.3 31 Paulsens Upper Levels 39 4.0 39 4.0 5 Voyager 1 117 6.1 2.48 6.1 365 6.1 72 Paulsens Stockpiles 6 5.9 6 5.9 1 GIC and CIT 4 Total 123 6.1 711 3.7 834 4.1 113 Table 2 Paulsens Reserves Underground and Open Pit Oz Au Measured Indicated Inferred Total Proven Probable Total 31 December 2011 Oz Au 31 December 2011 Oz Au Mt Olympus 1,712 2.5 1,533 2.3 4,956 2.8 8,201 2.6 695 Peake 95 5.6 794 4.2 889 4.3 123 Waugh 347 3.6 240 3.6 587 3.6 68 Zeus 508 2.1 532 2.2 1,040 2.2 72 Electric Dingo 98 1.6 444 1.2 542 1.3 22 Romulus 329 2.6 329 2.6 27 Total 1,712 2.5 2,581 2.5 7,295 2.8 11,588 2.7 1,007 Table 3 Ashburton Mineral Resources Inclusive of Reserves 0.7g/t lower cut used for Mt Olympus & 0.9g/t lower cut for others Mt Olympus 248 3.6 113 3.6 361 3.6 42 Peake 47 5.0 47 5.0 8 Waugh Zeus 38 2.4 38 2.4 3 Electric Dingo Romulus Total 446 3.7 53 Table 4 Ashburton Reserves @ A$1,600 gold price based on oxide/transitional material only (free milling) Page 19