NST has released its annual reserve and resource update. Total resources rose 3.9moz, after accounting for mine depletion, to 61.3moz. KCGM’s contribution increased 12%, both from open pit and underground, and now account for over 51% of group resources. Reserves rose 0.7mt, more than replacing mine depletion. Maiden reserves were declared for the Fimiston underground and Red Hill deposits and Griffin at Jundee. We believe there is scope to provide additional feed to the expanded process plant at KCGM in the medium-term, replacing lower grade stockpiles. This potential remains upside to our base case, and we reiterate our BUY rating, lifting our price target 1% to A$19.70 to reflect the larger resource base.
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