Northern Star (NST) delivered a standout June Q, producing 184koz at an all-in sustaining cost (AISC) of A$982/oz (+48% on production, -8% on costs vs the March Q), well above our expectations and guidance. Underlying free cashflow from operations was $93m (+191% from $32m in March Q). Net cash increased to $512m (+16% Q-o-Q). Group milled tonnes rose by 34%, largely as a result of the integration of South Kal (SKO) production capacity. FY19 production guidance is forecast at 600-640koz at an AISC of A$1,025-$1,125/oz, which we see as conservative. Argonaut believes NST has strong potential to flex milling capacity and move >700kozpa in the short term via existing capacity and toll treatment or potential M&A. NST continues to trade on premium metrics including ~22x EV/FCF and >$6,000oz EV/production. We maintain our HOLD recommendation and we look for additional detail at the Strategy Day on August 4th
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