NST’s 2QFY25 result was solid with most key metrics within 1% of our forecasts. Guidance ranges for FY25 are unchanged, which implies a strong lift in gold production at KCGM. The improved performance is driven by the ramp up of the two underground mines and improving grades in the Fimiston pit as more of the high-grade Golden Pike North area is mined. Importantly, the 27mtpa KCGM mil expansion project is on track and NST has left its FY25 capex guidance and the A$1.5b overall project budget unchanged. The stronger 2HFY25 volumes should coincide with higher gold prices, enabling NST to generate impressive cash flow over the next six months. Keeping the KCGM mill expansion on schedule and on budget remains a key catalyst for NST and we reiterate our BUY rating lifting our price target 4% to A$23.00 due to ongoing strength in gold prices.
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