Annual Report
2021
Our Mission
To generate superior returns
for our shareholders, while
providing positive benefits
for our stakeholders, through
operational effectiveness,
exploration and active
portfolio management.
FY21 SNAPShOt
FY21 Snapshot
Financial Performance
FY21
LTIFR
40%
Revenue increase
to $2,761M in FY21
2.5
2.0
1.5
1.0
0.5
0
Cash Earnings* increased 10%
$648M
$221M
FY21 Dividends
* Cash Earnings is underlying EBITDA less interest,
tax and sustaining capital
4
Increase in Cashflow from FY20 Operations to $1,077M
52%
Environmental & Social Responsibility
Doubled total
Group economic
value add in FY21
$3.4B
2050
Net Zero ambition
for Scope 1-2 GHG
emissions by 2050
ZERO
Heritage related infringements
or human rights violations
detected in our supply chain
Materially adverse
Community incidents
FY21 SNAPShOt
Safety Snapshot
0.9
2.1
2.0
1.6
0.5
0.5
0.9
FY21
TRIFR
10.0
9.1
5.6
6.4
3.3
6.2
5.6
3.3
8.0
6.0
4.0
2.0
0
FY19
FY20
FY21
FY19
FY20
FY21
Northern Star
Industry average
FY21 LTIFR of 0.9 includes 100% of KCGM and Saracen safety statistics from 1
July 2020 – 30 June 2021. FY21 TRIFR of 5.6 includes 100% of KCGM and Saracen
safety statistics from 1 July 2020 – 30 June 2021.
FY20 & FY21 Industry means the DMIRS Safety Performance in the Western
Australian Mineral Industry – Accident and Injury Statistics 2018-19 and 2019-20
Metalliferous total.
FY20 LTIFR and FY20 TRIFR include 50% of KCGM safety statistics from 1 January
2020 (date on which Northern Star acquired financial benefit of 50% of KCGM).
FY19 Industry means the DMIRS Safety Performance in the Western Australian
Mineral Industry - Accident and Injury Statistics 2017-18 Underground Metalliferous.
Inorganic Growth
5
‘Golden Mile’
100% Owned
for the first time in
its 125-year history
Measured &
Indicated Resources
14% Increase since FY20
38.7Moz
2019
2020
2021
Resources & Reserves
1
2
3
3 large scale production
centres in world
class locations
21Moz
8% Increase in
Group Reserves
Successful merger
with Saracen
+56Moz
Group Resources increase of
15% as a result of merger
Increase to 1.6Moz in
Group Production
from FY19
90%
* FY20/21 Industry means the DMIRS Safety Performance in the Western
Australian Mineral Industry – Accident and Injury Statistics 2019-20
Metalliferous total.
* FY19 Industry means the DMIRS Safety Performance in the Western
Australian Mineral Industry - Accident and Injury Statistics 2017-18
Underground Metalliferous.
NORTHERN STAR RESOURCES LIMITED ANNUAL REPORT 2021NORTHERN STAR RESOURCES LIMITED ANNUAL REPORT 2021
LEttER FROM MANAGING DIRECtOR & CEO AND ChAIRMAN
LEttER FROM MANAGING DIRECtOR & CEO AND ChAIRMAN
Letter from the
Managing Director & CEO
and Chairman
Dear shareholder,
The FY21 year saw the successful merger of
Northern Star with Saracen Mineral Holdings
Limited to form the world’s sixth-largest
gold mining company. As a result, Northern Star
became the sole owner of the iconic Super Pit and
Mt Charlotte underground mine in Kalgoorlie, and
welcomed two new operations into our portfolio
- Thunderbox and Carosue Dam in Western
Australia, augmenting our existing operations in
Western Australia and at Pogo in Alaska.
6
Net profit after tax for the year increased 300
percent to $1.032bn. Under accounting rules, this
result was affected by substantial significant items
resulting from the merger, as described on pages
26 to 28 of this report. Underlying net profit after
tax increased 28 percent to $372m. Cash Earnings
(which we define as Underlying EBITDA less net
interest, tax and sustaining capital) increased from
$588m to $648m. The Board considers this the best
measure of the Company’s financial performance
going forward, given the post-merger accounting
effects of the merger, as also described on p28.
The Directors determined to pay a final, fully-
franked dividend of 9.5 cents per share, bringing the
full year dividend to 19 cents, an 11 percent increase
on the full year 2020 dividend (excluding the special
dividend paid that year). The 2021 dividend is in line
with a new dividend policy adopted by the Board;
namely, to pay out 20-30 percent of Cash Earnings,
as defined above, each year.
Northern Star’s Mission is to generate superior
returns for our shareholders, while providing positive
benefits for our stakeholders, through operational
effectiveness, exploration and active portfolio
management.
We do this by caring for and rewarding the people
that comprise our Company and providing a safe
and fulfilling work environment for them.
Our decisions are guided by the Northern
Star STARR Core Values of Safety, Teamwork,
Accountability, Respect and Results. We engage
fairly with our Suppliers, we demonstrate respect for
the Indigenous Peoples upon whose lands we are
privileged to work on, we minimise our footprint on
the environment wherever possible, and we support
the communities in which we operate.
Northern Star has a strong history of improving its
key financial metrics on a year-on-year basis, and
this trend continued in FY21.
Our objective of delivering superior earnings for
our shareholders is achieved by value-creating
strategies, including:
•
•
•
•
•
Reliable delivery of production and cost
guidance, with a continuing focus on lowering
costs
Discipline in the efficient use of capital,
balancing re-investment and returns to
shareholders
Sustainable discovery and mine life extension
Active portfolio management
Sustainable employee, environmental, social
and governance performance.
The Company’s strong operational and financial
performance during FY21 resulted in:
•
•
•
•
A very strong balance sheet at 30 June 2021:
$1.14bn liquidity including $338m in undrawn
revolving facilities and $799m in cash and
bullion
$662M corporate bank debt
The achievement of production guidance and
record revenues supported by a positive A$
gold price
The achievement of costs guidance against a
backdrop of COVID-19 related management
and inflationary pressures
•
Significant cashflow of $1,077M from
operating activities which, with our strong
balance sheet, provides the platform to
launch our organic growth strategy to 2Moz
production by FY26.
At the same time, the overall safety performance of
the Group remains better than industry standard,
with a 12-month TRIFR of 5.6, an outstanding result
which all 6,000 employees and contractors are
proud to achieve. Tragically, this performance was
marred by the death of one of our workers at the
Carosue Dam Operations in July 2020. We convey
our deepest sympathies to his family, co-workers
and friends.
The merger with Saracen was followed by a major
re-organisation of our management and Board
structure to position the Company for future
success. We acknowledge the contribution of
former longstanding Directors Peter O’Connor,
Shirley In’t Veld and Executive Chair, Bill Beament,
who developed Northern Star from a junior gold
producer to the major gold miner that it is today.
We also acknowledge the contributions of Raleigh
Finlayson who played a similar foundational and
transformative role in Saracen, retiring as Managing
Director of Northern Star in July 2021. We are
delighted that Raleigh will rejoin the Board as a
Non-Executive Director in April next year. We also
acknowledge the contributions of Anthony Kiernan
to Saracen and throughout the merger process, who
will retire and not stand for re-election at the Annual
General Meeting in November 2021.
The cornerstone of our strong outlook is our
sustained exploration investment which has
generated continued organic reserve growth.
Northern Star at 30 June has 21Moz in Reserves (up
8%) and 56.5Moz in Resources (up 15%), exclusively
in world class locations and close to existing
production infrastructure.
These Resources and Reserves will underpin growth
in production to 2Moz per annum by FY26. Our
production guidance for FY22 is set at 1.55Moz
– 1.65Moz at an all-in sustaining cost (AISC) of
$1,475 - $1,575/oz. In addition, we look forward
to demonstrating in our 2021 Sustainability Report
(to be released in March 2022) the pathways
to achieving our net zero ambition for scope 1-2
greenhouse gas emissions by 2050.
We recognise the commitment of all of our dedicated
workforce, but in particular our people at the Pogo
Operations in Alaska, maintaining continuity in
operations throughout the COVID-19 pandemic
Somay Ahmadi and
Pedro Acevedo at the
KCGM processing plant,
Kalgoorlie operations.
7
whilst protecting the health of team and community
and achieving FY21 production guidance of 210Koz.
We are pleased to share the FY21 results with you
in this Annual Report. We acknowledge the support
of our fellow Directors and our exceptional leaders,
staff and business partners whose efforts have
enabled this continuing high performance by your
Company.
Stuart Tonkin
Managing Director
& CEO
Michael Chaney
Chairman
NORTHERN STAR RESOURCES LIMITED ANNUAL REPORT 2021NORTHERN STAR RESOURCES LIMITED ANNUAL REPORT 2021 IN thIS REPORt
In this Report
Our Mission
FY21 Snapshot
Letter from our MD & Chairman
Summary of Financial Outcomes
STARR Core Values
Where We Operate
Operations Report
Resources & Reserves
Risk Management
Julius Drake-Brockman,
Open Pit Manager at
Porphyry, Carosue Dam,
Kalgoorlie operations.
Environmental, Social & Governance
Directors’ Report
Remuneration Report
Financial Report
2
4
6
10
11
12
14
34
42
46
68
84
130
9
Forward Looking Statements
Northern Star Resources Limited has prepared this Report 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 Report. 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 Report or its contents or otherwise arising in
connection with it.
Corporate Information
200
NORTHERN STAR RESOURCES LIMITED ANNUAL REPORT 2021 SuMMARY OF FINANCIAL OutCOMES
StARR CORE VALuES
10
Summary of
Financial Outcomes
Cash Earnings* increased 10% to $648M, reflecting
the cash-generating strength of the business.
FY21 guidance achieved
On the back of the successful merger with Saracen
Mineral Holdings Limited which was implemented
on 12 February 2021, the financial year ended 30
June 2021 was a record production and earnings
year for the Company with both full year production
and all-in sustaining costs (AISC) per ounce meeting
FY21 guidance.
Record earnings
Cash Earnings increased 10% to $648M, reflecting
the cash-generating strength of the business.
Record statutory and underlying earnings were
recorded in FY21 with Net Profit After Tax of $1,033
million (FY20: $258 million) and Underlying Net
Profit After Tax of $372 million (FY20: $291 million).
Margin focus
Gold revenue increased 40 percent to $2.8 billion
primarily driven by the 3 percent increase in average
realised gold price per ounce of $2,273/oz and a
33 percent increase in gold sold (excluding pre-
production ounces). Cost of sales increased 51
percent to $2.2 billion (2020: $1.5 billion) driven
by higher activity across all operations translating
to higher mining, processing, and operational
employee costs. Cost remains a key focus for
the business and has been a key element of the
Company’s strategy to unlock value. Northern
Star has an excellent history of realising total cost
reductions and best in class operational productivity.
Strong operational cash generation
As a result of the strong production and gold price
realised during the year, FY21 Underlying EBITDA,
which takes into account the specific charges and
costs incurred during the year associated with the
merger with Saracen, was up 47 percent to $1,159
million (FY20: $791 million). Similarly, operating cash
flow was up 52 percent from the prior year to $1,077
million (FY20 $710 million).
Clear organic growth pathway
$548 million of sustaining and growth capital
(excluding exploration) was invested into mine
operations during FY21 which, along with the
Company’s robust balance sheet and available
liquidity, supports the Company’s organic growth
strategy to 2Moz production by FY26. At 30 June
2021, the Company has cash and bullion of $799
million and corporate bank debt of $662 million.
Robust returns to shareholders
A new dividend policy has been announced based
on Cash Earnings. A final fully-franked dividend
of 9.5 cents per share to shareholders has been
approved, taking the full year payout to 19.0 cents
per share.
“Gold revenue increased 40 percent to $2.8 billion
primarily driven by the 3 percent increase in average
realised gold price per ounce of $2,273/oz and a 33 percent
increase in gold sold (excluding pre-production ounces).”
* Cash Earnings is Underlying EBITDA less net interest, tax and sustaining capital .
MORGAN BALL, CHIEF FINANCIAL OFICER
StARR Core Values
Our Core Values are integral to the working
lives of all our workers and operations.
Safety
It matters and
starts with you
Results
We deliver on
our promises
teamwork
Together
we can
11
Respect
To get it you
must give it
Accountability
The responsibility
lies with you
NORTHERN STAR RESOURCES LIMITED ANNUAL REPORT 2021NORTHERN STAR RESOURCES LIMITED ANNUAL REPORT 2021 WhERE WE OPERAtE
WhERE WE OPERAtE
Where We Operate
Our portfolio of high-quality, high-margin mining
operations are located in world class jurisdictions.
Figure 1 North American Operations
Pogo Production
Centre
• Pogo
12
A l a s k a
Fairbanks
Delta
Junction
Anchorage
Figure 2 Australian Operations
tanami Project
DARWIN
Yandal Production
Centre
1. Jundee
2. Bronzewing
3. Thunderbox
Paulsens
Operations
Kununurra
Halls Creek
N o r t h e r n
Te r r i t o r y
Nanutarra
Newman
We s t e r n
A u s t r a l i a
Alice
Springs
1
2
3
Wiluna
Leinster
4 2
5 3 6
1
Kalgoorlie/Boulder
Kambalda
Coolgardie
PERTH
13
Kalgoorlie Production
Centre
1. Carosue Dam
2. Kanowna Belle
3. KCGM
4. Kundana
5. East Kundana JV (51%)
6. South Kalgoorlie
JUNEAU
Northern Star would like to acknowledge
Doyon Limited, whose traditional lands
surround our Pogo Operation in Alaska, USA.
Northern Star would like to acknowledge
and pay our respects to Traditional Owner
groups whose land we are privileged to
work on, and whose input and guidance
we seek and value within the operation
of our business. We acknowledge their
strong and special physical and cultural
connections to their ancestral lands.
• Whadjuk Noongar
• Walpiri and Yapa
• The Wiluna Martu
• Puutu Kunti Kurrama
• Kultju
• Tjiwarl
• Maduwongga
• Marlinyu Ghoorlie
• Tjurabalan
and Pinikura
• Jurruru
• Yinhawongka
• Nyalpa
• Kakarra Part A
NORTHERN STAR RESOURCES LIMITED ANNUAL REPORT 2021NORTHERN STAR RESOURCES LIMITED ANNUAL REPORT 2021 Operations
Report
OPERAtIONS REPORt
OPERAtIONS REPORt
Operations Review
Northern Star owns and operates three world class
gold production centres: Kalgoorlie, Yandal and
Pogo, located exclusively in world class locations.
Our assets have upside from an extensive
organic growth pipeline. Northern Star
continues to invest in building its asset base
through strategic acquisitions and continuing to
invest in exploration to unlock value from the gold
endowment across our highly prospective ground
located exclusively in low sovereign-risk jurisdictions
of Australia and North America.
16
FY21 Operations
It was another year of record production for
Northern Star following the successful merger
with Saracen in February 2021, with performance
delivered by the West Australian production centres
of Yandal and Kalgoorlie (including KCGM) and our
Pogo Operation located in Alaska, USA.
Delivery of synergies from the merger between
Northern Star and Saracen in H2 of FY21 resulted in
both savings and improved productivities at numerous
levels. The strategic merger started the process
of unlocking synergies and opportunities across
the portfolio while still delivering ounces and cost
guidances. It was a credit to the operational teams
to achieve these results in addition to the successful
implementation of our transformative merger.
In FY21*, a total of 1.6 million ounces of gold was
sold at an average gold price of A$2,277 per ounce
(FY20: 900,388oz at A$2,208/oz). All-in sustaining
costs for FY21 were A$1,483 per ounce (FY20:
A$1,496/oz). Both production and AISC were within
guidance for FY21.
Overall, 25.5 million tonnes of ore was milled at an
average head grade of 2.2gpt for 1.6 million ounces
of gold recovered. Unprocessed ore stocks available
for mill feed at the end of FY21 contained 3.2 million
ounces of gold, including gold in circuit at the end
of FY21 totalling 72 thousand ounces. These items
are reflected in the FY21 financial statements as ore
stockpile and gold in circuit at lower of cost and net
realisable value.
FY21 also saw exceptional exploration results, with
Group Resources increasing 15% to 56Moz and
Reserves increasing 8% to 21Moz over the 9-month
period to 31 March 2021. This expanded inventory
will underpin the Company’s announced strategy to
grow production to 2Moz per annum by FY26. Our
two development assets, the Tanami and Paulsens
projects, continued with exploration activity
throughout the year.
table 1 Mine Operations Review
Annualised
Metrics*
Total Material
Mined (tonnes)
Total Material
Milled (tonnes)
Head Grade (gpt)
Recovery (%)
Gold Recovered
(Oz)
Gold Sold - Pre-
Production (Oz)
Gold Sold –
Production (Oz)
Jundee Thunderbox
KCGM Kalgoorlie
(ex KCGM)
Carosue
Dam
Pogo
Total
2,493,606
1,503,584
8,190,822
2,922,623
3,611,254
849,892
19,571,781
2,715,941
2,928,409
12,971,624
2,873,351
3,152,305
848,205
25,489,835
3.6
90
1.6
94
1.4
83
3.1
90
2.5
93
8.6
89
2.2
89
285,908
140,306
478,438
256,970
234,136
209,647
1,605,405
-
55,779
32,493
-
21,014
-
109,286
286,676
88,211
439,596
256,657
211,262
204,041
1,486,443
Gold Sold (Oz)
286,676
143,990
472,089
256,657
232,276
204,041
1,595,729
All-in Sustaining
Cost (A$/Oz)^
1,278
924
1,385
1,942
1,311
1,851
1,483
Pogo Production Centre
A
Pogo Operations
+8Moz Gold Camp
Fairbanks
Steese National
Conservation Area
Pogo
North
Pole
Delta Junction
17
Figure 1 Northern Star's mining operations in world class locations
Denali National
Park and Preserve
A
D
E
B
C
Lake Clarke
National Park
and Preserve
A Pogo Production Centre
B Yandal Production Centre
C Kalgoorlie Production Centre
D Tanami Project
E Paulsens Operations
ANCHORAGE
Production
Pogo delivered another strong full year performance.
Gold sold at Pogo from FY21 operations totalled
204,041 ounces at an AISC of US$1,387 per ounce
(FY20: 173,036oz at AISC US$1,402/oz).
Record horizontal advance and record diamond drill
metres were achieved in Q4 FY21, and a milestone
record of 92 thousand tonnes of ore was processed in
the month of June 2021. Pogo Resources grew 3% to
6.9Moz for the nine months ended 31 March 2021.
Although COVID-19 impacted Pogo productivity in
* The metrics in this table have been prepared including Saracen
acquired assets, Thunderbox, Carosue Dam and an additional 50%
interest in KCGM to increase Northern Star’s ownership to 100% as
if they were part of the Northern Star Resources Group from 1 July
2020. Contribution to NST earnings is from 12 February 2021. FY20
comparative reflects pre-merger assets only.
H1 FY21, the availability of vaccines and significantly
lower COVID-19 rates in Alaska reduced operational
disruptions by Q4 FY21.
Exploration
Underground drilling continued with a focus on
Resource definition and conversion across most
ore systems (Liese, South Pogo, Fun Zone) in the
underground mining areas. Surface exploration drilling
activity concentrated on Resource definition drilling
programs across the central portion of the Goodpaster
discovery zone and the Central Gap prospect.
^ Pogo all-in sustaining cost has been presented in AUD which is the
Group’s presentation currency. The AISC in United States Dollars was
US$1,387 for the financial year.
NORTHERN STAR RESOURCES LIMITED ANNUAL REPORT 2021NORTHERN STAR RESOURCES LIMITED ANNUAL REPORT 2021
OPERAtIONS REPORt
Kalgoorlie Production Centre
C
Kalgoorlie Operations
KCGM Operations
+19Moz Gold Camp
+80Moz Gold Camp
• Kanowna Belle
• Kundana
• East Kundana JV (51%)
• South Kalgoorlie Operations
Carosue Dam Operations
+5.8Moz Gold Camp
Lake Rebecca
Carosue Dam
Kanowna
Belle
KALGOORLIE
KCGM
Kundana
East Kundana
JV (51%)
Mount Burges
Coolgardie
South Kalgoorlie Operations
18
KCGM Operations
FY21 marked the consolidation of Kalgoorlie’s
Golden Mile under one owner for the first time in
its 125-year history, as a result of the Northern Star
and Saracen merger. The revitalisation of this asset
continued with the first full year of ownership. A
great example was the step change improvement
in the open pit movements which increased
to 60Mt for FY21. This was achieved with the
investment in multiple working areas, structurally
lowering costs and improving productivity. Mount
Charlotte underground mine near doubled the
underground reserves with only 9 months of drilling.
A new underground portal and drill platform was
commenced in Q4 to setup a platform to commence
drilling the significant potential of the world class
mineralised system at depth. The process plant
also completed a major de-risking project by
modernising the Fimiston mill control system which
took the plant down for a planned 2 week shutdown.
KCGM continues to have unrivalled potential and is
already a cornerstone long life asset in the portfolio.
Production
KCGM total gold sold in FY21 (100% interest)
was 472,089 ounces at an AISC of A$1,385 per
ounce (FY20: 115,825oz at AISC A$1,427/oz; 50%
interest). Record gold production under Northern
Star ownership of 139,264 ounces was achieved
Kambalda
Lake Lefroy
in Q4 FY21 (at an AISC of A$1,296/oz), up 18% on
the previous record in Q2 FY21. KCGM Reserves
increased by 2Moz to 11.6Moz and Resources by
7Moz to 26Moz in the 9 months to 31 March 2021.
Exploration
Exploration activity across the KCGM Operations is
expanding as part of a multi-year growth program
announced since the merger. Beneath the surface
mining operations at Fimiston South, Brownhill
and Morrisons we undertook significant surface
resource definition programs and established new
underground access in the Fimiston North area.
This led to the commencement of an initial phase of
underground drilling beneath the existing open pit
and northwards towards the Croesus area.
Underground resource definition drilling at Mount
Charlotte is increasing with programs targeting
the Hidden Secret, Kal East and Mt Ferrum areas
completed. In-mine exploration drilling from the
Sam Pearce decline into the Unit 6 and Duke areas
returned encouraging results.
Surface exploration drilling programs were
successful at the Little Wonder and Mt Percy areas
and the regional exploration south of the KCGM
mine area, at Jacks Reward and Shea prospects,
highlighted significant potential within the Boulder-
Lefroy Fault corridor.
(excludes KCGM and Carosue Dam) (FY20:
3,052,606t). Total gold sold in FY21 was 256,657
ounces at an AISC of A$1,942 per ounce (FY20:
317,248oz at AISC A$1,564/oz).
Exploration – Kanowna Belle
Exploration at Kanowna Belle outlined new areas of
resource growth in the upper levels of the mine and
extensions to the Velvet area. Regional exploration
of surrounding areas continued during FY21
with drilling programs focused on the near mine
environment east of Kanowna Belle. Exploration
continued within the Acra Joint Venture (NST: 75%).
Exploration – EKJV*
During FY21, in-mine exploration within the
East Kundana Joint Venture (EKJV) (NST: 51%)
was focused on the definition of new areas of
mineralisation in the hanging wall of the main RHP
mining complex. Surface exploration defined initial
open pit resources and shallow mineralisation at
Hornet and Golden Hind prospects.
Exploration – Kundana*
Extensional mine exploration within Northern Star’s
100% owned Kundana tenements outlined the
extensions to the Moonbeam, Pope John, Xmas and
Strzelecki resource areas. Exploration drilling from
the Moonbean mine infrastructure was successful
and targeted potential extensions to the Barkers
trend south of the existing mining infrastructure.
Exploration – South Kalgoorlie Operations
Underground and surface diamond drilling
continued to define new resource extensions within
the northern portion of the mine. Surface drilling
at the adjacent Mutooroo West area intersected
significant new mineralisation for which we are now
progressing the development of new underground
drilling platforms. Regional exploration within the
South Kalgoorlie tenement package is generating
early success with potential discoveries at Tindals
and SBS in the Coolgardie region. Along the Zuleika
Shear Zone and the Butterfly - Enigma trends we
continued our exploration drilling programs to test
the mineralised trends.
Exploration – Carbine*
Along the existing Carbine - Phantom trend our
surface exploration drilling achieved further success in
parallel structures and at Anthill our resource definition
drilling defined an initial Ore Reserve and identified
potential mineralisation. In FY21 we expanded the
regional exploration of the Carbine and Carnage
exploration tenure and have recorded strong results
from the first drilling program at Blister Dam.
19
Carosue Dam Operations
Previously a Saracen core asset, acquired as part of
the merger, Carosue Dam supplements Northern
Star’s existing Kalgoorlie Operations.
Production
The Carosue Dam Operations produced a total
3,611,254 tonnes of material in FY21, up 51% on
FY20 (FY20: 2,395,000). Total 232,276 ounces of
gold sold in FY21 at an AISC of A$1,311 per ounce
(FY20: 203,28oz at AISC $1,263/oz). Underground
operations delivered to plan with record production
while the open pit operations recommenced.
The Carosue Dam mill expansion project was
commissioned in Q2 of FY21 and delivered a record
quarterly throughput of 956kt in Q4 FY21 well
above the upgraded nameplate design.
Exploration
In-mine exploration within Karari and Whirling
Dervish focused on extending the main mineralised
areas within the mining complex. Resource definition
drilling of the Million Dollar deposit was completed
allowing for commencement of mining operations.
Regional exploration of the Carosue Dam trend
continued with programs completed at Osman,
Spectre and Jebena prospects. At Karari South,
Spectre and Scaramanga we commenced Initial
drilling of targets generated from the 3D seismic
program.
Further north, we were successful with regional
exploration drilling at Porphyry and Moody’s Reward
and recorded encouraging early results with the
initial drilling programs at the Memphis prospect.
Kalgoorlie Operations
Production
Kalgoorlie Operations delivered production of
2,922,623 tonnes in FY21 from Kanowna Belle,
Kundana, East Kundana Joint Venture (NST: 51%)
and South Kalgoorlie (SKO) underground operations
* As announced to ASX, the sale of Northern Star's EKJV, Kundana and Carbine assets completed on 18 August 2021
NORTHERN STAR RESOURCES LIMITED ANNUAL REPORT 2021
NORTHERN STAR RESOURCES LIMITED ANNUAL REPORT 2021 OPERAtIONS REPORt
OPERAtIONS REPORt
Yandal Production Centre
B
Jundee
Meekatharra
Wiluna
Bronzewing
Wanjarri
Nature
Reserve
Leinster
Thunderbox
Lennora
Jundee Operations
+13.5Moz Gold Camp
Bronzewing Operations
+3.6Moz Gold Camp
thunderbox Operations
+5.4Moz Gold Camp
20
During FY21, the Thunderbox Operations were
added to the Northern Star Yandal Operations
portfolio as a result of the merger with Saracen.
Production
Jundee Development advance was especially strong
in FY21, with a new monthly record for jumbo advance
of +2,000 metres in March 2021 and record quarterly
development advances achieved in Q4 FY21.
Jundee and Bronzewing (combined) produced
2,493,606 tonnes in FY21 (FY20: 3,464,189t).
Total gold sold was 286,676 ounces at an AISC
of A$1,278 per ounce (FY20: 294,279oz at AISC
A$1,095/oz).
Thunderbox’s FY21 production was 1,503,584
tonnes (FY20: 3,984kt) with 143,990 ounces of
gold sold at an AISC of A$924 per ounce (FY20:
184,538oz at AISC $731/oz).
Exploration – Jundee Operations
In FY21, the Mineral Resource was increased by
successful resource extension drilling within surface
and underground areas. We maintained high levels
of exploration drilling across the Jundee Mine area
with a focus on the growth of new mineralised
areas at Invicta, Deakin, Cardassian, Lyons South,
Hampton and Hughes trends. Long term exploration
continued with a program of deep exploration drill
holes into the Atlantis trend and the commencement
of surface exploration drilling into the McLarty and
the Cook-Keating areas. Underground development
to provide a range of new drilling platforms across
the Jundee Mine is in progress as part of a renewed
exploration focus into sections of the mine corridor.
Exploration – Bronzewing Operations
Resource and Reserve definition drilling at Julius
was completed which allowed us to finalise
the mine plan and develop the new open pit
mining operation where pre-production activities
commenced late in FY21.
The Orelia Resource and Reserve models are being
updated after a significant resource definition and
extension drilling program was completed which
defined further growth at depth and along strike
from the existing Orelia resource area.
Significant regional exploration programs at the
Corboys, Dragon-Venus and Bill's Find projects
achieved strong results. Drilling at Corboys has
defined a significant Resource upgrade within
the central area of the 20 kilometre long trend.
Reconnaissance programs continue to test
numerous significant new drilling targets which will
be the focus of exploration and Resource definition
drilling in the coming years.
Exploration – thunderbox Operations
Significant Resource definition and extension
drilling programs were completed at Otto Bore,
Bannockburn and Wonder North. Regional
exploration concentrated on the Bundarra area
screening new targets along extensions to the
Wonder Shear zone.
tanami Project
D
tanami Project
+5Moz Gold Camp
Halls
Creek
Fitzroy
Crossing
Gibson
Desert
North
Tanami
Alice Springs
Central tanami (NSt 40%)
We continued our regional exploration programs
across the project which highlighted that the region
is relatively under-explored. As a result, we are
undertaking collaborative programs with CSIRO to
better understand the stratigraphy, geochemistry
and gold paragenesis of the Tanami region.
Western tanami (NSt 100%)
Across the Western Tanami project tenure
we completed regional airborne and ground
Karratha
Indian Ocean
geophysical programs to refine our exploration
targets.
tanami Regional (NSt 100%)
To complement our existing activities at the
Central Tanami Joint Venture, Northern Star holds a
substantial land position in the surrounding Tanami
region. In FY21 the focus was on completing
reconnaissance aircore drilling programs across
new anomalies defined in the Stubbins area.
21
E
Paulsens
+3Moz Gold Camp
Onslow
Fortescue
Cane River
Conservation Park
Nanutarra
Paulsens
Paulsens Operations
At Paulsens, FY21 efforts focused on completing
regional geophysical and geochemical sampling
programs and evaluating the remaining
underground Ore Reserve potential.
NORTHERN STAR RESOURCES LIMITED ANNUAL REPORT 2021NORTHERN STAR RESOURCES LIMITED ANNUAL REPORT 2021 “This year we achieved some outstanding results
which are a credit to all our teams and business
partners; however the most exciting thing that we
achieved in FY21 is the strong operational platform
and a clear pathway to create further value through
increased production and lower costs.”
LUKE CREAGH, CHIEF OPERATING OFFICER - POGO AND NSMS
A clear pathway to
increasing production
and lowering costs.
Super Pit, KCGM, Kalgoorlie
operations.
OPERAtIONS REPORt
OPERAtIONS REPORt
Financial Review
Record Underlying Net Profit After Tax and
strong balance sheet supports growth.
Overview
FY21 performance was generated from the Jundee,
Kalgoorlie Operations, KCGM (50% interest) and
Pogo Operations for the full year ending 30 June
2021. Following the implementation of the merger
with Saracen Mineral Holdings Limited on 12
February 2021, performance was also generated
from Thunderbox, Carosue Dam and KCGM on a
100% interest basis.
table 1 Financial Reporting Metrics**
Jundee Thunder-
KCGM
box
Kal.
Ops
Carosue
Dam
Pogo
Exp-
loration
Other
~
Total
table 2 Financial Overview
FY21
FY20
Change
$
Change
(%)
Revenue
EBITDA 1
A$M
2,760.5
1,971.7
788.8
A$M
2,268.0
717.1
1,550.9
Underlying EBITDA 1
A$M
1,159.2
790.8
368.4
Cash Earnings1
A$M
647.9
587.7
60.2
40
216
47
10
Net Profit After Tax 1
A$M
1,032.5
258.3
774.2
300
Underlying Net Profit After Tax 2
A$M
371.6
291.0
80.6
Cash flow from Operating Activities
A$M
1,076.8
710.4
366.4
Cash flow used in Investing Activities
A$M
(257.1)
(1,670.3)
1,413.2
28
52
85
Sustaining Capital
A$M
(356.3)
(156.7)
(199.6)
(127)
Gold Sold -
Production (Oz) (c)
286,676
19,766
321,377
256,657
94,429
204,041
Revenue (A$M)
660.1
42.2
731.0
590.1
202.5
474.7
280.6
42.2
465.0
356.9
116.3
275.1
-
-
-
-
1,182,946
Growth Capital
A$M
(191.3)
(129.6)
(61.7)
59.9 (a)
2,760.5
Exploration
A$M
(145.5)
(76.4)
(69.1)
(48)
(90)
25
(4.2)
1,531.9
Acquisition of Assets & Businesses
A$M
390.6
(1315.6)
1,706.2
130
24
Cost of Sales (Ex-
D&A) (A$M)
Depreciation &
Amortisation
(A$M)
93.5
7.7
220.4
129.4
105.4
95.4
4.9
3.3
660.0
Impairment (A$M)
0.2
Acquisition &
Integration Costs
(A$M)
-
Segment EBITDA
(A$M) (d)
379.5
-
-
-
436.6
-
-
-
-
-
-
-
108.8
-
545.6
-
231.8
231.8
266.0
233.2
86.2
199.6
(10.9)
NA
1,153.6
Underlying
EBITDA (A$M) (d)
379.5
10.0
306.0
233.2
110.2
199.6
(10.9)
(68.4) (b)
1,159.2
** The metrics in this table have been prepared on a financial reporting basis, incorporating the effects of the merger with Saracen Minerals Holdings
Limited from 12 February 2021.
~ Other contains amounts not allocated to segments, including corporate activities.
(a) Other revenue is the non-cash unwind of the acquired out-of-the-money hedge book contract on merger that has not been allocated to operations.
The liability unwinds to revenue as the out-of-the-money hedges are delivered.
(b) Includes: corporate costs, excluding exploration segment EBITDA and corporate, technical services and projects depreciation and amortisation.
(c) Gold Sold – Production excludes gold sales from assets not currently determined to be in commercial production (operating in the manner as intended
by management as defined by Accounting Standards). During the financial year (on a statutory reporting basis) 56koz of pre-production sales were
capitalised to Mine Properties offset against the related growth capital. Total development receipts capitalised to Mine Properties during the financial
year were $120 million.
(d) Segment and Underlying EBITDA are non-GAAP measures and have been reconciled in note 2 of the financial statements and below, respectively.
Net Investment Proceeds / (Payments)
A$M
30.4
(2.6)
33.0
1,269
Other
A$M
15.0
10.6
4.4
Free Cash Flow 3
A$M
819.7
(959.9)
1,779.6
Underlying Free Cash Flow 4
A$M
358.5
365.4
(6.9)
Cash and bullion
A$M
799.0
748.0
51.0
Corporate Bank Debt & Secured Asset
Financing 5
A$M
746.2
761.5
(15.3)
Net Cash/(Debt) 6
A$M
52.8
(13.5)
66.3
Basic Earnings Per Share
Cents
114.7
Dividends per share7
Cents
19.0
37.3
17.0
77.4
2.0
42
185
(2)
7
2
491
208
12
1. Net Profit After Tax is statutory profit (NPAT). EBITDA, Underling EBITDA and Cash Earnings are non-GAAP measures and have been reconciled to NPAT
in the table below
2. Underlying Net Profit (Underlying NPAT) is a non-GAAP measure and a reconciliation between statutory NPAT and Underlying NPAT has been included
below
3. Free Cash Flow is calculated as operating cash flow less investing cash flow as outlined in the Group’s Cash Flow Statement
4. A reconciliation between free cash flow and underlying free cash flow has been included below
5. Excludes accrued interest and net of unamortised upfront transaction costs
6. Net debt is calculated as Cash and Bullion less Corporate Bank Debt & Secured Asset Financing
7. This excludes the Special Dividend of 10 cents per share paid during FY21
NORTHERN STAR RESOURCES LIMITED ANNUAL REPORT 2021NORTHERN STAR RESOURCES LIMITED ANNUAL REPORT 2021 OPERAtIONS REPORt
OPERAtIONS REPORt
Profit
The results and commentary below relate to the
statutory FY21 results of the Group and include
production and commercial metrics of the acquired
operations of Saracen from the merger.
The Group reported a profit after tax of $1,032.5
million for the 12 months ending 30 June 2021, a
300 percent increase from the prior year (2020:
$258.3 million). As outlined below in Table 4, when
normalising for the effects of the merger and other
one-off charges, underlying net profit after tax for
the year ended 30 June 2021 was $371.6 million, an
increase of 28 percent over the prior year (2020:
291.0 million). Gold revenue increased 40 percent
to $2.8 billion (2020: $2.0 billion) primarily driven
by the 3 percent increase in average realised
gold price per ounce (2021: $2,273/oz; 2020:
$2,208/oz) and a 33 percent increase in gold sold
(production ounces) (2021: 1,182,946 ounces;
2020: 886,543 ounces).
Production from the operations was mixed with
Jundee and Kalgoorlie Operations recording
lower gold sold offset by KCGM and Pogo where
production grew in FY21. However, the main driver
for the higher production in FY21 was the inclusion
of Thunderbox, Carosue Dam and the additional
50% of KCGM which was recorded as revenue
from 12 February 2021.
Cost of sales increased 51 percent to $2.2 billion
(2020: $1.5 billion) driven by higher activity
across all operations translating to higher mining,
processing and operational employee costs and an
increase in non-cash depreciation and amortisation
charges and inventory expenses which were
incurred from the higher asset values recognised on
the balance sheet of NST as part of the merger.
Acquisition and integration related costs were
higher with the recognition of stamp duty in
respect of the merger, which is estimated to be
payable in FY22. Non-cash impairments of $545.6
million (2020: $28.3 million) were recognised
primarily in respect of exploration properties and
mineralised waste stockpiles at KCGM Operations.
A $1,919.2 million non-cash gain in respect of the
fair value remeasurement of the Company's pre-
merger 50% stake in KCGM was recognised at
merger implementation date.
As a result of the merger with Saracen during FY21,
treatment under Australian Accounting Standards
has resulted in a number of significant adjustments
to the financial accounts. Further to this, we have
calculated Cash Earnings for the financial year.
This is defined as underlying EBITDA less net
interest, tax and sustaining capital. Northern Star
believes that this metric provides shareholders with
a clearer understanding of the Company’s strong
cash-generating performance both during the year
and on an ongoing basis.
26
table 3 Net Profit After Tax to EBITDA, Underlying EBITDA and Cash Earnings Reconciliation
Net Profit After Tax
Tax
Depreciation & Amortisation
Interest Income
Finance Costs
EBITDA
Financial Instrument Fair Value Adjustments
Impairment Charges
Pre-tax gain on remeasurement of KCGM (NST 50% share)
Acquisition & Integration Costs
Merger fair value uplift on run-of-mine stockpiles and gold-in-
circuit8
Delivery of Saracen non-cash hedge book9
Underlying EBITDA
Tax & Net Interest Paid
Sustaining Capital
Cash Earnings
FY21
FY20
1,032.5
258.3
551.4
660.0
(4.3)
28.4
2,268.0
18.9
545.6
(1,919.2)
231.8
74.0
(59.9)
86.3
354.8
(4.2)
21.9
717.1
0.5
28.3
-
44.9
-
-
1,159.2
790.8
(155.0)
(46.4)
(356.3)
(156.7)
647.9
587.7
A$M
A$M
A$M
A$M
A$M
A$M
A$M
A$M
A$M
A$M
A$M
A$M
A$M
A$M
A$M
A$M
27
The Group reported a profit after tax of
$1,032.5 million for the 12 months ending
30 June 2021, a 300 percent increase from
the prior year (2020: $258.3 million).
8. Run-of-mine (ROM) stockpiles and gold-in-circuit inventory at the time of the merger was required to be remeasured to fair value, resulting in a non-cash
increase of A$74 million. This adjustment represents the non-cash amount expensed in FY21 on sale of the contained gold.
9. The mark-to-market position on Saracen’s hedge book was required to be recognised as a liability as part of the merger accounting. As the gold in those
hedge contracts is delivered the liability is unwound and recorded as a non-cash increase to revenue.
NORTHERN STAR RESOURCES LIMITED ANNUAL REPORT 2021NORTHERN STAR RESOURCES LIMITED ANNUAL REPORT 2021 table 4 Net Profit After Tax to Underlying Net Profit After Tax Reconciliation
OPERAtIONS REPORt
OPERAtIONS REPORt
FY21
FY20
A$M
1,032.5
258.3
Net Profit After Tax
Add:
Acquisition & Integration Costs
Impairment Charges
Financial Instrument Fair Value Adjustments
Losses taken up on Associates
Finance Transaction Costs
Merger Fair Value uplift on Run-of-Mine Stockpiles and Gold-in-
Circuit 8
Less:
A$M
A$M
A$M
A$M
A$M
A$M
231.8
545.6
18.9
1.5
3.9
74.0
Pre-Tax Gain on remeasurement of KCGM (NST 50% share)
A$M
(1,919.2)
Tax Adjustments:
Tax Effect on Adjustments
Permanent Tax Differences on Merger 10
Echo Tax Losses
Underlying Net Profit After Tax
A$M
A$M
A$M
A$M
313.1
69.5
-
371.6
45.0
28.3
0.5
3.6
-
-
-
(23.2)
-
(21.5)
291.0
28
29
The above underlying net profit after tax has not been
adjusted to reflect certain increased non-cash costs
arising from acquisition accounting from the merger
with Saracen Minerals Holdings Limited (Saracen).
Due to the requirement to recognise the Saracen
assets and liabilities at fair value and also remeasure
Northern Star’s existing (50%) interest in KCGM (on
obtaining 100% control) to fair value, there has been a
significant increase in the net assets of the Group.
Saracen’s net assets immediately prior to the merger
were approximately $1.7 billion. This compares to the
value of the shares issued on merger date, which is
required to be used as the deemed consideration for
the deal, of approximately $5.1 billion. Consequently,
Saracen’s net asset value increased by approximately
$3.4 billion, when compared to its previously
reported net assets. Further, Accounting Standards
require Northern Star to remeasure its existing 50%
interest in KCGM further increasing net assets by
~$1.3 billion (pre-tax gain on remeasurement of ~$1.9
billion, outlined in table above, less the applicable
non-cash tax effect of ~$0.6 billion).
As outlined above, the approximate increase in net
assets of the combined Group, when compared
to the previously reported net assets of the Group
prior to the merger, was ~$4.8 billion (excluding
transaction costs). A significant proportion of this
increase has been allocated to inventory, mine
properties and property, plant and equipment. This
increase in value is non-cash and has arisen due to
the issue of ~422.5 million shares at the agreed ratio
as part of the merger (0.3763 new Northern Star
Shares for every 1 Saracen share held on the record
date) and the other non-cash revaluation of Northern
Star’s existing 50% interest in KCGM.
This significant increase in asset carrying values will
subsequently be expensed in the income statement
and will increase future non-cash charges to net
profit. These future charges will increase costs of
goods sold (via expensing of revalued inventory on
processing and selling gold produced), amortisation
(mine properties) and depreciation (property,
plant and equipment) charges. Consequently, it is
expected over time that there will be an increased
spread between Net Profit After Tax and the Group’s
operating cash flow generation. For this reason,
the Board believe that Cash Earnings (as defined)
represents the most appropriate measure of
Company performance going forward.
10. A proportion of stamp duty attributed to KCGM is non-deductible for tax purposes, which results in a permanent tax difference that increases the current
year’s effective tax rate (income tax expense divided by profit before income tax per profit and loss)
Cale Pike, Apprentice
Heavy Duty Fitter,
Kanowna Belle,
Kalgoorlie operations.
NORTHERN STAR RESOURCES LIMITED ANNUAL REPORT 2021NORTHERN STAR RESOURCES LIMITED ANNUAL REPORT 2021 OPERAtIONS REPORt
OPERAtIONS REPORt
Balance sheet
The increase in current assets as at 30 June 2021
to $1.8 billion was driven by the recognition and
fair value uplift of the stockpiles at the acquired
assets expected to be processed within 12 months.
With the sale of EKJV (51%), Kundana and Carbine
operations to Evolution Mining Limited, completing
on 18 August 2021, the book value of the associated
assets and liabilities have been reclassified and
presented within current assets/liabilities held for
sale at 30 June 2021.
Non-current assets increased by $6.7 billion
primarily resulting from the merger, whereby
$7.3 billion of value was recognised on balance
sheet with the majority allocated within the
classes of Property, Plant and Equipment ($0.6
billion), Mine Properties ($5.6 billion including
the remeasurement of NST’s pre-merger share of
table 5 Non-cash impacts from the merger
KCGM) and Exploration and evaluation assets
($0.2 billion).
Current liabilities were $771.6 million at 30 June
2021 (30 June 2020: 638.2 million) principally due
to the higher trade and other payables consistent
with the increased size of the business post-merger
and recognition of the stamp duty estimate payable
resulting from the merger which is recognised in
Provisions.
The Group’s corporate bank debt was refinanced
during the year resulting in the full amount being
reclassified to non-current Borrowings, and
there was an increase in non-current Provisions,
principally in relation to closure liabilities being
recognised and deferred tax liabilities recognised as
part of the merger.
Incremental
Impact
Earnings impact
in future years
30
Estimated future Group increase in depreciation and amortisation
compared to these charges by the two standalone companies prior to
the merger
~$200-
250/oz 11
Ongoing
paid as a percentage of revenue during the year
until the tax return is finalised after the financial
year-end). FY20 tax payments were lower due to
temporary differences relating to the vesting of FY17
Performance Rights being deductible. Stamp duty
on both NST and Saracen's respective 50 percent
acquisitions of KCGM was paid during the year.
Payments for property, plant and equipment
increased $99.6 million with a full year of investment
at KCGM and contribution to merger operations.
Investment in exploration increased over the year
with the enlarged merged business and acquisition
of the Kurnalpi project during the year. Payments
for mine properties increased 85% from prior year
to $351.3 million with a full year of investment at
KCGM and operations acquired on merger. The
Company acquired $402.5 million in cash on the
merger with Saracen. Cash flows from financing
activities highlight the refinancing of the Group’s
debt facilities during the year and the repayment
of $325 million. Dividends paid to the Company’s
shareholders during the year ($310.5 million)
included the FY20 interim dividend ($55.5 million)
paid on 16 July 2020 that was previously deferred
due to COVID-19 uncertainty in March 2020.
table 6 Free Cash Flow
Free Cash Flow
Mergers and acquisitions 13
Net (sale)/purchase of Investments
Movement in bullion awaiting settlement & finished goods
Working capital movement
Payments for equipment financing & leases for operating assets
FY21
819.7
(318.1)
(30.4)
(48.2)
16.4
(80.9)
358.5
FY20
(959.9)
1,322.3
2.6
26.9
36.7
(63.2)
365.4
31
Increase in non-cash value of KCGM Marginal Stockpiles per ounce,
excluding cash rehandle, processing and royalty charges on their future
processing
~$260/oz12
Ongoing
Underlying Free Cash Flow
The table above includes an estimate of the
increases in the above-mentioned charges, when
compared to the aggregate charges to earnings that
would have previously arisen by the two merged
companies on a separate basis. No adjustments
have been made to Underlying NPAT, EBITDA,
Adjusted EBITDA or Cash Earnings for the items
outlined in the above table. The amounts shown in
this table are pre-tax and, due to the revaluation of
these amounts for tax purposes, it is expected that
there will be a corresponding reduction in future
cash tax payments.
Cash flow
Cash flows include contributions from the Saracen
business from 12 February 2021. Cash flows from
operating activities for the 12 months ended 30
June 2021 were $1,076.8 million, being 52 percent
higher than the previous financial year driven
principally by increased revenues from higher
gold sold on the back of the expanded business
post-merger and a 3 percent increase in realised
gold price per ounce received for the year. Income
taxes paid were higher for the year (2021: $140.9
million; 2020: $41.3 million) consistent with stronger
revenues post-merger (monthly tax instalments are
11. Estimate makes assumptions about the blend of production from different mining areas that have differing depreciation and amortisation rates and the
future production activities may differ proportionately to this estimate. Further depreciation and amortisation rates are reviewed annually and are subject
to the estimation uncertainties outlined in Note 8(d) of the financial statements.
12. These non-cash charges will affect profit and loss at the time the related gold recovered is sold. Consequently, the timing and amount of these charges in
future periods depends on when these stockpiles are processed and sold. Carrying value per estimated ounce of contained gold (~616Moz at 1.03gpt) on
the KCGM Marginal Stockpiles at 30 June 2021 was $1,013/oz.
FY22 Production & Costs Guidance
The following guidance was announced to the ASX on 22 July 2021
table 7 FY22 Production and Costs Guidance
Site
Kalgoorlie
Yandal
Pogo
Group
Production
AISC/Oz
(Koz)
(A$)
900 - 950
1,500 - 1,600
430 - 450
1,375 - 1,475
220 - 250
1,700 - 1,800
1,550 - 1,650
1,475 - 1,575
13. Mergers and acquisitions includes: 30 June 2021- Saracen cash obtained on Merger ($402.5 million) less acquisitions of assets during the period ($11.9
million) and merger and acquisition related costs paid ($72.5). 30 June 2020 – merger and acquisition related costs paid (6.7 million), acquisition of assets
($177.7 million) and payments for acquisition of businesses net of cash acquired ($1,137.9 million)
NORTHERN STAR RESOURCES LIMITED ANNUAL REPORT 2021NORTHERN STAR RESOURCES LIMITED ANNUAL REPORT 2021 Continuing to
increase our reserves
and resources.
Exploration drilling at Pogo
Operations.
Resources
& Reserves
RESOuRCES & RESERVES
RESOuRCES & RESERVES
Mineral Resources
MINERAL RESOURCES AS AT 31 MARCH 2021
MINERAL RESOURCES AS AT 31 MARCH 2021
MEASURED
INDICATED
INFERRED
TOTAL RESOURCES
MEASURED
INDICATED
INFERRED
TOTAL RESOURCES
Tonnes Grade Ounces
Tonnes Grade Ounces
Tonnes Grade Ounces
Tonnes Grade Ounces
Tonnes Grade Ounces
Tonnes Grade Ounces
Tonnes Grade Ounces
Tonnes Grade Ounces
NST ATTRIBUTABLE INCLUSIVE OF RESERVE
(000’s)
(gpt)
(000’s)
(000’s)
(gpt)
(000’s)
(000’s)
(gpt)
(000’s)
(000’s)
(gpt)
(000’s)
NST ATTRIBUTABLE INCLUSIVE OF RESERVE
(000’s)
(gpt)
(000’s)
(000’s)
(gpt)
(000’s)
(000’s)
(gpt)
(000’s)
(000’s)
(gpt)
(000’s)
44
5,441
1.3
234
3,489
1.2
131
10,220
1.2
409
Surface
-
-
-
-
-
-
-
-
-
-
-
-
SKO GOLD PROJECT
39,046
3.2
3,963
12,469
2.6
1,025
51,634
3.0
4,992
Underground
1,932
2.8
174
11,681
2.9
1,085
9,148
2.9
860
22,761
2.9
2,119
Surface
1,290
Underground
119
597
-
1.1
1.2
1.3
-
5
21
6
-
-
-
-
-
-
-
-
-
-
-
-
597
1.3
-
-
21
6
2,007
1.2
75
44,488
2.9
4,197
15,957
2.3
1,156
62,452
2.7
5,428
Stockpiles
Jubilee ROM stocks
Gold in Circuit
Sub-Total SKO
-
-
38
3.6
-
-
-
4
1
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
38
3.6
-
-
-
4
1
1,970
2.8
180
11,681
2.9
1,085
9,148
2.9
860
22,799
2.9
2,125
Surface
2,800
2.6
237
17,116
1.9
1,045
5,310
1.5
263
25,226
1.9
1,545
CAROSUE DAM GOLD PROJECT
Underground
-
-
-
-
-
-
-
-
-
-
-
-
Surface
3,123
1.5
149
24,270
1.6
1,278
9,670
1.4
429
37,062
1.6
1,856
2,800
2.6
237
17,116
1.9
1,045
5,310
1.5
263
25,226
1.9
1,545
Underground
6,522
2.9
602
13,968
2.6
1,184
6,583
2.9
546
27,074
2.8
2,332
JUNDEE GOLD PROJECT
Stockpiles
Gold in Circuit
Sub-Total Jundee
BRONZEWING PROJECT
Sub-Total Bronzewing
THUNDERBOX
Stockpiles
Gold in Circuit
-
-
-
354
12.0
136
354
12.0
136
PAULSENS PROJECT
Surface
1,795
Underground
5,503
1,664
-
1.3
2.1
1.4
-
77
28,104
1.7
1,538
2,752
1.6
365
11,606
2.1
802
2,381
2.4
41
4
-
-
-
-
-
-
-
-
-
-
140
180
-
-
32,651
1.7
1,755
19,490
2.2
1,347
1,664
1.4
-
-
41
4
Sub-Total Thunderbox
8,961
1.7
483
39,710
1.8
2,340
5,133
1.9
321
53,805
1.8
3,144
CONSOLIDATED YANDAL OPERATIONS
Total Yandal Operations
POGO PROJECT
13,769
1.8
799
101,314
2.3
7,582
26,401
2.1
1,740
141,483
2.2
10,121
36
Stockpiles
Gold in Circuit
Sub-Total Pogo
KCGM
Stockpiles
Gold in Circuit
Sub-Total KCGM
KANOWNA GOLD PROJECT
Surface
Underground
Surface
Underground
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
7
7
-
-
12,864
9.5
3,949
9,679
9.0
2,814
22,543
9.3
6,764
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
7
12,864
9.5
3,949
10,033
9.1
2,951
22,897
9.4
6,907
206,004
1.8
12,110
103,458
1.4
4,715
309,462
1.7
16,825
40,757
2.0
2,603
51,316
2.4
3,878
92,073
2.2
6,481
124,669
0.7
2,964
-
-
29
-
-
-
-
-
-
-
-
-
-
-
-
124,669
0.7
2,941
-
-
29
Stockpiles
Gold in Circuit
Underground
3,424
147
-
3.1
2.1
-
10
7
-
-
-
-
-
-
-
-
-
-
-
-
147
2.1
-
-
10
7
Sub-Total Kanowna
3,572
3.1
360
14,171
2.6
1,204
12,216
2.3
901
29,958
2.6
2,464
KUNDANA GOLD PROJECT
Stockpiles RHP
Gold in Circuit
Surface
-
-
Underground
541
4.2
49
3.3
-
-
-
73
5
1
-
-
-
-
-
-
-
-
-
4,074
4.4
571
3,267
3.8
403
7,882
4.1
1,047
-
-
-
-
-
-
-
-
-
-
-
-
49
3.1
-
-
5
1
Sub-Total Kundana Gold
590
4.2
80
4,074
4.4
571
3,267
3.8
403
7,931
4.1
1,053
EAST KUNDANA JOINT VENTURE
Surface
1
9.3
0
125
5.3
21
26
3.7
3
153
5.1
25
Underground
1,071
6.3
218
2,751
5.2
464
2,032
4.5
292
5,854
5.2
974
Stockpiles RHP
Stockpiles Raleigh
Stockpiles GEM (100%)
Gold in Circuit
43
3.0
0
5
-
1.7
3.9
-
4
0
1
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
43
3.0
0
5
-
1.7
3.9
-
4
0
1
-
Sub-Total East Kundana JV
1,121
6.2
223
2,876
5.2
485
2,058
4.5
295
6,056
5.2
1,003
Stockpiles
Gold in Circuit
Sub-Total Carosue Dam
CARBINE PROJECT
Surface
Underground
Sub-Total Carbine
CONSOLIDATED KALGOORLIE OPS
3,212
2.0
-
-
81
7
-
-
-
-
-
-
-
-
-
-
-
-
3,212
2.0
-
-
81
7
12,857
2.0
838
38,238
2.0
2,463
16,253
2.0
975
67,348
2.0
4,275
-
-
-
-
-
-
-
-
-
2,136
1.8
753
3.7
2,889
2.3
123
90
213
537
1.5
1,334
3.4
1,871
2.9
26
148
174
2,673
1.7
149
2,087
3.5
238
4,760
2.5
387
Total Kalgoorlie Operations
145,276
1.0
4,673
320,691
2.0 20,733
199,587
1.9
12,201
665,553
1.8 37,606
Stockpiles
Gold in Circuit
Sub-Total Paulsens
ASHBURTON PROJECT
Stockpiles
Sub-Total Ashburton
Surface
-
-
Underground
341
5.8
11
-
1.6
-
-
64
1
0
129
3.1
88
5.6
-
-
-
-
13
16
-
-
1,766
1.9
106
1,895
2.0
43
6.6
-
-
-
-
9
-
-
473
5.8
11
-
1.6
-
119
89
1
0
37
353
5.7
65
217
4.1
29
1,809
2.0
115
2,379
2.7
209
Surface
-
-
-
-
-
-
-
-
-
98
1.6
-
-
98
1.6
5
-
5
444
1.2
-
-
444
1.2
17
-
17
542
1.3
-
-
542
1.3
22
-
22
WESTERN TANAMI PROJECT
Surface/Underground
107
7.8
Stockpiles
Sub-Total Western Tanami
375
1.4
482
2.8
27
17
44
1,079
6.0
208
1,449
5.8
271
2,635
6.0
506
-
-
-
-
-
-
375
1.4
17
1,079
6.0
208
1,449
5.8
271
3,010
5.4
523
NORTHERN STAR TOTAL
162,941
1.1
5,832
440,693
2.3 32,907
244,565
2.3
17,748
848,199
2.1 56,486
Note:
1. Mineral Resources are inclusive of Ore Reserves.
2. Mineral Resources are reported at various gold price guidelines: a. A$2,250/oz Au - All Australian assets except Ashburton; b. A$1,850/oz Au - Ashburton;
US$1,500/oz Au - USA assets.
3. Rounding may result in apparent summation differences between tonnes, grade and contained metal content.
4. Numbers are 100 % NST attributable.
Competent Persons:
1. Michael Mulroney
2. Daniel Howe
3. Brook Ekers
125,166
0.7
2,993
246,762
1.9
14,713
154,774
1.7
8,593
526,702
1.6 26,299
CENTRAL TANAMI PROJECT JV
Surface
1
1.4
0
1,065
2.5
86
3,756
1.5
176
4,823
1.7
262
Stockpiles
560
0.7
13
-
-
-
-
-
-
560
0.7
13
Surface/Underground
2,502
2.9
232
4,430
2.8
400
4,842
2.9
453
11,774
2.9
1,085
344
13,106
2.7
1,118
8,459
2.7
725
24,989
2.7
2,186
Sub-Total Central Tanami JV
3,062
2.5
245
4,430
2.8
400
4,842
2.9
453
12,334
2.8
1,097
NORTHERN STAR RESOURCES LIMITED ANNUAL REPORT 2021NORTHERN STAR RESOURCES LIMITED ANNUAL REPORT 2021 RESOuRCES & RESERVES
RESOuRCES & RESERVES
Ore Reserves
ORE RESERVES AS AT 31 MARCH 2021
ORE RESERVES AS AT 31 MARCH 2021
NST ATTRIBUTABLE RESERVE
(000’s)
(gpt)
(000’s)
(000’s)
(gpt)
(000’s)
(000’s)
(gpt)
(000’s)
NST ATTRIBUTABLE RESERVE
(000’s)
(gpt)
(000’s)
(000’s)
(gpt)
(000’s)
(000’s)
(gpt)
(000’s)
PROVED
PROBABLE
TOTAL RESERVE
Tonnes
Grade
Ounces
Tonnes
Grade
Ounces
Tonnes
Grade
Ounces
PROVED
PROBABLE
TOTAL RESERVE
Tonnes
Grade
Ounces
Tonnes
Grade
Ounces
Tonnes
Grade
Ounces
JUNDEE GOLD PROJECT
Stockpiles
Gold in Circuit
Sub-Total Jundee
BRONZEWING PROJECT
Stockpiles
Gold in Circuit
Sub-Total Bronzewing
THUNDERBOX PROJECT
Surface
1,290
Underground
119
597
-
2,007
1.1
1.2
1.1
-
1.2
44
5
21
6
75
998
14,126
-
-
1.3
4.0
-
-
43
2,288
1,824
14,245
-
-
597
-
1.2
4.0
1.1
-
87
1,829
21
6
15,124
3.8
1,867
17,131
3.5
1,942
Surface
3,600
2.0
234
11,891
1.5
557
15,491
1.6
791
Underground
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
3,600
2.0
234
11,891
1.5
557
15,491
1.6
791
SKO GOLD PROJECT
Stockpiles
Gold in Circuit
Sub-Total SKO
CAROSUE DAM PROJECT
Stockpiles
Gold in Circuit
Sub-Total Carosue Dam
CARBINE PROJECT
1,471
3,636
1,445
-
6,552
1.1
1.9
0.8
-
1.5
54
219
37
4
19,605
7,983
-
-
1.5
1.9
-
-
957
485
-
-
21,076
11,619
1,445
-
314
27,588
1.6
1,442
34,140
1.5
1.9
0.8
-
1.6
1,011
704
37
4
1,756
Stockpiles
Sub-Total Carbine
CONSOLIDATED KALGOORLIE OPS
Surface
Underground
-
177
38
-
215
Surface
1,323
Underground
Surface
Underground
-
734
-
2,056
-
-
-
-
-
4.0
3.1
-
4.0
1.3
-
1.5
-
1.5
-
-
-
-
-
23
4
1
28
56
-
34
7
97
-
-
-
-
-
2,254
-
-
-
3.4
-
-
-
248
-
-
-
2,431
38
-
2,254
3.4
248
2,469
15,948
10,782
-
-
1.4
3.0
-
-
734
17,271
1,023
10,782
-
-
734
-
-
3.5
3.6
-
3.5
1.4
3.0
1.5
-
-
270
4
1
276
790
1,023
34
7
26,731
2.0
1,757
28,787
2.0
1,855
1,241
2.0
-
-
-
-
1,241
2.0
78
-
-
78
1,241
2.0
-
-
-
-
1,241
2.0
78
-
-
78
12,159
1.6
622
54,603
2.2
3,866
66,762
2.1
4,489
PAULSENS PROJECT
Total Kalgoorlie Operations
130,676
1
3,479
183,222
2
11,484
313,899
1
14,963
Surface
Underground
Stockpiles
Gold in Circuit
Sub-Total Thunderbox
CONSOLIDATED YANDAL OPERATIONS
Total Yandal Operations
POGO GOLD PROJECT
38
Surface
Underground
Stockpiles
Gold in Circuit
Sub-Total Pogo
KCGM
Stockpiles
Gold in Circuit
Sub-Total KCGM
KANOWNA GOLD PROJECT
Stockpiles
Gold in Circuit
Sub-Total Kanowna
KUNDANA GOLD PROJECT
Stockpiles
Gold in Circuit
Sub-Total Kundana Gold
EAST KUNDANA JOINT VENTURE
Surface
Underground
Stockpiles RHP
Stockpiles Raleigh
Stockpiles GEM (100%)
Gold in Circuit
Sub-Total East Kundana JV
Surface
Underground
-
106
124,669
-
Surface
Underground
Surface
Underground
-
-
-
-
-
-
-
-
-
-
-
2.1
0.7
-
-
-
-
7
7
-
7
2,941
29
-
5,852
-
-
5,852
131,932
13,561
-
-
-
7.9
-
-
8
1.8
2.1
-
-
-
-
1,491
5,852
-
-
-
-
1,491
5,852
7,697
131,932
912
13,667
-
-
124,669
-
-
7.9
-
-
8
1.8
2.1
0.7
-
-
1,491
-
7
1,498
7,697
919
2,941
29
125,272
0.7
3,000
145,493
1.8
8,609
270,766
1.3
11,609
4
2,131
147
-
2,282
-
147
49
-
195
-
607
43
0
5
-
656
2.1
3.0
2.1
-
3.0
-
5.1
3.1
-
4.8
-
4.9
3.0
1.7
3.9
-
4.8
0
206
10
7
830
4,265
-
-
2.6
2.6
-
-
69
353
-
-
834
6,396
147
-
223
5,095
2.6
422
7,377
-
24
5
1
30
-
96
4
0
1
-
-
1,336
-
-
-
4.3
-
-
-
184
-
-
-
1,483
49
-
1,336
4.3
184
1,531
124
949
-
-
-
-
3.9
5.5
-
-
-
-
16
169
-
-
-
-
124
1,555
43
0
5
-
101
1,073
5.4
185
1,729
2.6
2.7
2.1
-
2.7
-
4.4
3.1
-
4.4
3.9
5.3
3.0
1.7
3.9
-
5.1
69
559
10
7
645
-
208
5
1
214
16
265
4
0
1
-
286
39
Surface
Underground
Stockpiles
Gold in Circuit
Sub-Total Paulsens
ASHBURTON PROJECT
Surface
Stockpiles
Sub-Total Ashburton
CENTRAL TANAMI PROJECT JV
Underground
Underground
Stockpiles
Sub-Total Central Tanami JV
WESTERN TANAMI PROJECT
Stockpiles
Sub-Total Western Tanami
-
186
11
-
197
-
-
-
-
-
-
-
-
-
-
5.1
1.6
-
4.9
-
-
-
-
-
-
-
-
-
-
31
1
-
31
-
-
-
-
-
-
-
-
-
-
84
-
-
-
4.0
-
-
84
4.0
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
11
-
-
11
-
-
-
-
-
-
-
-
-
-
269
11
-
281
-
-
-
-
-
-
-
-
-
-
4.8
1.6
-
4.6
-
-
-
-
-
-
-
-
-
-
41
1
-
42
-
-
-
-
-
-
-
-
-
NORTHERN STAR TOTAL
143,033
0.9
4,139
243,761
2.2
16,852
386,794
1.7
20,992
Note:
1. Ore Reserves are reported at various gold price guidelines: a. A$1,750/oz Au - All Australian assets except Bronzewing; b. A$1,850/oz Au - Bronzewing;
US$1,350/oz Au - USA assets.
2. Rounding may result in apparent summation differences between tonnes, grade and contained metal content.
3. Ounces are estimates of metal contained in the Ore Reserve and do not include allowances for processing losses.
4. Numbers are 100 % NST attributable.
Competent Persons:
1. Jeff Brown
2. Stephen King
Ibrahim Omari
3.
NORTHERN STAR RESOURCES LIMITED ANNUAL REPORT 2021NORTHERN STAR RESOURCES LIMITED ANNUAL REPORT 2021 A maintenance employee
inspects the conveyor belt at
the Carosue Dam processing
plant, Kalgoorlie operations.
40
RESOuRCES & RESERVES
Resources and Reserves
As at 31 March 2021, Northern Star’s Consolidated Group Mineral Resource
Estimate (inclusive of Ore Reserves) was 848.2 million tonnes at 2.1 grams
per tonne gold for 56.5 million ounces (refer Table 1) and the Consolidated
Group Ore Reserve Estimate is 386.8 million tonnes at 1.7 grams per
tonne gold for 21.0 million ounces (refer Table 2). Reported in ASX release
“Resources, Reserves and Exploration Update” on 3 May 2021 which is also
found on Northern Star’s website (https://www.nsrltd.com/investor-and-
media/asx-announcements/2021/may/resources,-reserves-and-exploration-
update).
The Mineral Resource inventory growth stems from Northern Star’s
exploration success at its Jundee, Pogo and KCGM Operations portfolio and
the merger with Saracen and after mining depletion of 1.1 million ounces.
Group Mineral Resources increased significantly by 7.5 million ounces gold
from 49.0 million ounces gold as at 30 June 2020 to the current 56.5 million
ounces gold Measured, Indicated and Inferred Mineral Resource, after
mining depletion of 1.1 million ounces.
Group Proved and Probable Ore Reserve increased by 2.0 million ounces
gold from 19.0 million ounces gold as at 30 June 2020 to the current 21.0
million ounces gold Proven and Probable Reserve at 31 March 2021, after
mining depletion of 1.1 million ounces.
Northern Star is not aware of any other new information or data that
materially affects the information contained in the Annual Mineral Resource
and Ore Reserve statement 31 March 2021 other than changes due to normal
mining depletion during the three month period ended 30 June 2021.
Mineral Resource and Ore Reserve governance and internal
controls
Northern Star ensures that the Mineral Resource and Ore Reserve estimates
quoted are subject to governance arrangements and internal controls
activated at a site level and at the corporate level. Internal and external
reviews of Mineral Resource and Ore Reserve estimation procedures and
results are carried out through a technical review team that is comprised
of highly competent and qualified professionals. These reviews have not
identified any material issues. The Company has finalised its governance
framework in relation to the Mineral Resource and Ore Reserve estimates in
line with the expansion of its business.
Northern Star reports its Mineral Resources and Ore Reserves on an
annual basis in accordance with the Australasian Code for Reporting of
Exploration Results, Mineral Resources and Ore Reserves (the JORC Code)
2012 Edition. Mineral Resources are quoted inclusive of Ore Reserves.
Competent Persons named by Northern Star are Members or Fellows of
the Australasian Institute of Mining and Metallurgy and/or the Australian
Institute of Geoscientists and qualify as Competent Persons as defined in
the JORC Code.
Competent Persons Statements
The information in this announcement that relates to Mineral Resource
estimations, exploration results, data quality and geological interpretations
for the Company’s Jundee (including Julius Project), Pogo, Paulsens and
Kalgoorlie Operations (excluding the KCGM Operations) is based on, and
fairly represents, information compiled by Michael Mulroney, a Competent
Person who is a Member of the Australasian Institute of Mining and
Metallurgy and a full-time employee of Northern Star Resources Limited.
Mr Mulroney has sufficient experience that is relevant to the styles of
mineralisation and type of deposits under consideration and to the activity
being undertaken to qualify as a Competent Person as defined in the 2012
Edition of the "Australasian Code for Reporting of Exploration Results,
Mineral Resources and Ore Reserves". Mr Mulroney consents to the
inclusion in this announcement of the matters based on this information in
the form and context in which it appears.
The information in this announcement that relates to Mineral Resource
estimations, exploration results, data quality and geological interpretations
for the Company’s Carosue Dam, Thunderbox and KCGM Operations is
based on, and fairly represents, information compiled by Daniel Howe, a
Competent Person who is a Member of the Australasian Institute of Mining
and Metallurgy and a full-time employee of Northern Star Resources
Limited. Mr Howe has sufficient experience that is relevant to the styles of
mineralisation and type of deposits under consideration and to the activity
being undertaken to qualify as a Competent Person as defined in the 2012
Edition of the "Australasian Code for Reporting of Exploration Results,
Mineral Resources and Ore Reserves". Mr Howe consents to the inclusion in
this announcement of the matters based on this information in the form and
context in which it appears.
The information in this announcement that relates to Ore Reserve
estimations for the Company’s Jundee (including Julius Project), Pogo,
Paulsens and Kalgoorlie Operations (excluding the KCGM Open Pit and
Carosue Dam Operations) is based on, and fairly represents, information
compiled by Jeff Brown, a Competent Person who is a Member of the
Australasian Institute of Mining and Metallurgy and a full-time employee
of Northern Star Resources Limited. Mr Brown has sufficient experience
which is relevant to the style of mineralisation and type of deposit
under consideration and to the activity being undertaken to qualify as a
Competent Person as defined in the 2012 Edition of the "Australasian Code
for Reporting of Exploration Results, Mineral Resources and Ore Reserves".
Mr Brown consents to the inclusion in this announcement of the matters
based on this information in the form and context in which it appears.
The information in this announcement that relates to Ore Reserve estimations
for the Company’s Carosue Dam and Thunderbox Operations is based on,
and fairly represents, information compiled by Stephen King, a Competent
Person who is a Member of the Australasian Institute of Mining and
Metallurgy and a full-time employee of Northern Star Resources Limited. Mr
King has sufficient experience which is relevant to the style of mineralisation
and type of deposit under consideration and to the activity being undertaken
to qualify as a Competent Person as defined in the 2012 Edition of the
"Australasian Code for Reporting of Exploration Results, Mineral Resources
and Ore Reserves". Mr King consents to the inclusion in this announcement
of the matters based on this information in the form and context in which it
appears.
The information in this announcement that relates to Ore Reserve estimations
for the Company’s KCGM Open Pit Operations is based on, and fairly
represents, information compiled by Ibrahim Omari, a Competent Person
who is a Member of the Australasian Institute of Mining and Metallurgy and
a full-time employee of Northern Star Resources Limited. Mr Omari has
sufficient experience which is relevant to the style of mineralisation and type
of deposit under consideration and to the activity being undertaken to qualify
as a Competent Person as defined in the 2012 Edition of the "Australasian
Code for Reporting of Exploration Results, Mineral Resources and Ore
Reserves". Mr Omari consents to the inclusion in this announcement of the
matters based on this information in the form and context in which it appears.
The information in this announcement that relates to Mineral Resource
estimations, data quality, geological interpretations and potential for
eventual economic extraction for the Groundrush deposit at the Central
Tanami Gold Project is based on, and fairly represents, information
compiled by Brook Ekers a Competent Person who is a Member of
the Australian Institute of Geoscientists and a full-time employee of
Northern Star Resources Limited. 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 2012 Edition of the "Australasian Code
for Reporting of Exploration Results, Mineral Resources and Ore Reserves".
Mr Ekers consents to the inclusion in this announcement of the matters
based on this information in the form and context in which it appears.
The information in this announcement that relates to the Central and
Western Tanami Gold Projects is extracted from the Tanami Gold NL ASX
announcement entitled “Quarterly Report for the Period Ending 31 March
2014” released on 1 May 2014 and is available to view on www.tanami.com.au.
The Company confirms that it is not aware of any further new information
or data that materially affects the information included in the original
market announcement entitled “Quarterly Report for the Period Ending
31 March 2014” released on 1 May 2014 and, in the case of estimates of
Mineral Resources, that all material assumptions and technical parameters
underpinning the estimates in the relevant market announcement continue
to apply and have not materially changed. To the extent disclosed above,
the Company confirms that the form and context in which the Competent
Person’s findings are presented have not been materially modified from the
original market announcement.
The information in this announcement that relates to the Bronzewing
Project (excluding the Julius Project) is extracted from the Echo Resources
Ltd announcement entitled “Yandal Gold Project BFS & Growth Strategy”
released on 23 April 2019 and is available to view on www.asx.com.au.
The Company confirms that it is not aware of any further new information
or data that materially affects the information included in the original
market announcement entitled “Yandal Gold Project BFS & Growth
Strategy” released on 23 April 2019 and, in the case of estimates of
Mineral Resources, that all material assumptions and technical parameters
underpinning the estimates in the relevant market announcement continue
to apply and have not materially changed. To the extent disclosed above,
the Company confirms that the form and context in which the Competent
Person’s findings are presented have not been materially modified from the
original market announcement.
The information in this announcement that relates to the Mt Clement
Project is extracted from the Artemis Resources Limited announcement
entitled “Substantial Resource Increase at Mt Clement Gold & Silver
Project” released on ASX Announcement dated 26 July 2011 and is available
to view on www.artemisresources.com.au.
The Company confirms that it is not aware of any further new information or
data that materially affects the information included in the original market
announcement entitled “Substantial Resource Increase at Mt Clement Gold
& Silver Project” released on ASX Announcement dated 26 July 2011 and,
in the case of estimates of Mineral Resources, that all material assumptions
and technical parameters underpinning the estimates in the relevant market
announcement continue to apply and have not materially changed. To the
extent disclosed above, the Company confirms that the form and context
in which the Competent Person’s findings are presented have not been
materially modified from the original market announcement.
NORTHERN STAR RESOURCES LIMITED ANNUAL REPORT 2021 Risk
Management
RISK MANAGEMENt
Figure 1 Top 10 Company Risks
Risk Level
Low
Medium
High
44
Risk Management
“The Exploration & Growth Committee provides significant risk
management, in reviewing and assessing risks associated with
major capital projects and business development initiatives,
and ensuring that appropriate risk mitigation measures have
been implemented in such projects.”
JOHN RICHARDS, CHAIR OF THE EXPLORATION & GROWTH COMMITTEE
Risk is part of operating a business, and
Northern Star is committed to the adequate
identification, monitoring and management
of material risks presented by our operational and
corporate activities. A positive culture is fundamental
to effective risk management in the Company. Our
Code of Conduct instils values which promote a
positive culture, requiring transparency, honesty,
integrity, ethical behaviour and accountability.
The Independent Board members, who possess
the required values and a suitable mix of skills and
diversity of life experience, are at the apex of our
risk management framework. Senior management
is responsible for reinforcing and modelling the
appropriate behaviours and judgements required
to maintain effective risk management and risk
awareness. At the quarterly meetings of the Audit
and Risk Committee, information about emerging
and existing risks is presented by management
and the internal audit function, involving debate on
operational risk management across all sites and in
corporate activity. This risk management framework
enables the Board to identify further areas to mitigate
risks and continuously monitor and improve risk
management and internal controls.
Examples of this risk management framework in
action include crisis management and business
continuity training drills; comprehensive insurance
to transfer risk to external insurers; a rigorous
annual budgeting system based on up to date
Reserves and Resources information; appropriate
due diligence and advisory expertise for acquisitions
and divestments, and the new Exploration and
Growth Committee provides a forum for technically
based scrutiny of management decisions on capital
allocation for organic and inorganic growth initiatives
in pursuit of the Board’s role in approving and
monitoring performance of the Company’s strategy.
The quarterly risk review process identifies, assesses
and prioritises risks, and as part of that process,
identifies risk mitigation actions to be implemented
and monitored at all sites, using the risk assessment
matrix tool. This ensures the Board receives the most
up to date information about the Company, enabling
them to make strategic decisions regarding risks
which affect the Company now, but also those which
have potential to impact our success in the future.
Post-merger, we also focused on assessing our
new Group risk profile and making changes to our
corporate risk register as a result of our expanded
operations and Company footprint.
Figure 1 is a summary of the Company’s top 10
ranked risks from the Group corporate risk register
as at the Report date, and Figure 2 shows the key
environmental1 and social2 risks outside of the top
10 ranked risks to which the Company has a material
exposure, that are likely to affect Northern Star’s
financial condition or operating performance, as
disclosed in accordance with Recommendation 7.4 in
the ASX Corporate Governance Council Principles &
Recommendations (4th edition). “Material exposure”
means a real possibility that the risk in question could
materially impact the Company’s ability to create
or preserve value for shareholders over the short,
medium or longer term.
Northern Star’s understanding of climate change
related risks is continually improving with dedicated
bi-annual climate change related risk assessments as
part of our risk management process aligned with the
Task force on Climate-Related Financial Disclosures
(TCFD) recommendations, to better identify and
manage risks relating to climate change. These
include transitional risks and physical risks. Results of
these climate change risk assessments are submitted
to both the ESS Committee and the Audit & Risk
Committee ensuring Board oversight of the risks and
direction on key measures to be implemented to
reduce these risks, such as identifying greenhouse
gas emissions targets and conducting region-wide
water allocation studies.
Further information is detailed in our latest Sustainability Report available on our website at www.nsrltd.com/sustainability/.
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Residual
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Key control measures examples
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against shareholder
expectations
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virus or infectious disease
Market risk
Loss of social licence to
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7
Exploration
8
9
10
Geology
Mining Operations
Not managing stakeholder
expectations in relation to
sustainablity
• Competitive remuneration and benefits framework
• Ongoing training and mentoring programmes
• Group Safety Management system
• Regular audit and review processes
• Clear communication of investment hurdles and
corporate strategies
• Ongoing assessment of operations against guidance
• Operability levels matrix responding to situational level
• Maintaining close contact and relationships with
supply chain
• Treasury Risk Management Policy addressing
parameters for managing market risk exposures
• Maintain access to liquidity through banking facilities
• Ability to alter/flex operations to suit prevailing
macro-economic climate
• Inclusion and engagement with local communities,
Governments and other key stakeholders
• Environmental, Social & Safety Committee driving
ESR plan and sustainability reporting
• Team competence
• Sufficient budget provided to support exploration
pipeline
• Exploration & Growth Committee scrutiny
• LOM review and reserve and resource updates
• Continued sustained exploration pipeline
• Mine planning and operational procedures, including
reconciliation and grade control plans
• Operational flexiblility
• Disclosure of emissions reductions ambition and
pathways
• KMP ESG KPIs aligned to emissions reductions
Figure 2 Key Environmental and Social Risks
Risk
Risk
#
Inherent
risk rating
Residual
risk rating
Key control measures examples
15
Significant breach
of Operating Licence
Conditions
17
Cybersecurity
21
Climate Change
• Continued compliance and monitoring of compliance
with management systems and regulations
• External independent annual/bi-annual tails dam audit
(Operating procedure and geo-technical) at all sites
• Management of wet tailings storage
• TSF construction reports submitted to relevant
authorities
• Management of underground operations to reduce
waste water
• Weekly inspections of recycle tailings pond
• Offsite disaster recovery for all ICT systems
• Implementation of a security operations centre off-site
• Implemented advanced cybersecurity measures
• Cyber security training for all employees
• Water balance model and water usage forecasting
• Implementation of the TCFD Recommendations
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2
NORTHERN STAR RESOURCES LIMITED ANNUAL REPORT 2021
Environmental,
Social, &
Governance
hEALth & SAFEtY
hEALth & SAFEtY
health and Safety
Safety is our number one priority.
Group health, safety and wellbeing continues
to be a whole-of-Company focus as we
develop and implement plans that lead
the way in areas of safety leadership, technology,
systems, and the practical application of processes,
to mitigate and remove hazards and safety risks at
our operations.
In FY21 as a result of the merger with Saracen,
Northern Star’s safety team confidently rose to the
challenge of integrating the safety processes and
systems of the Thunderbox Operations, the Carosue
Dam Operations, and a 100% interest in the KCGM
Operations into Northern Star’s safety processes
and systems.
afety
S
It matters
and starts
with you
eamwork
T
Together
we can
ccountability
A
The
responsibility
lies with you
espect
R
To get it
you must
give it
esults
R
We deliver
on our
promises
Safety
Pre-empting new legislation yet to be enacted in
Western Australia (the Work Health and Safety Act
2020, and Work Health and Safety Regulations),
Northern Star’s workforce is focussing on:
•
critical hazard and risk identification, and
• management tools, in face-to-face externally
facilitated workshops on site which are aimed
at:
-
-
-
strengthening workers’ understanding,
empowering decision making in relation
to hazard and risk identification, and
exposure to risk.; and
providing an additional platform for the site
teams to discuss and qualitatively assess
critical risks to Northern Star’s operations.
Group health, safety
and wellbeing
continues to be a whole
of Company focus to
mitigate and remove
hazards and safety risks
at our operations.
_ - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
48
Safety Snapshot
49
FY21
LTIFR
0.9
2.1
FY21
TRIFR
10.0
9.1
5.6
2.5
2.0
1.5
1.0
0.5
0
1.6
0.5
0.5
2.0
0.9
3.3
8.0
6.0
4.0
2.0
0
6.4
3.3
6.2
5.6
FY19
FY20
FY21
FY19
FY20
FY21
Northern Star
Industry average
FY21 LTIFR of 0.9 includes 100% of KCGM and Saracen safety statistics from 1 July
2020 – 30 June 2021.
FY19 Industry means the DMIRS Safety Performance in the Western Australian
Mineral Industry - Accident and Injury Statistics 2017-18 Underground Metalliferous.
FY21 TRIFR of 5.6 includes 100% of KCGM and Saracen safety statistics from 1 July
2020 – 30 June 2021.
The pre-merger Northern Star TRIFR was 4.2 at 30 June 2021. as a consequence of
the merger with Saracen the group TRIFR was 5.6 at 30 June 2021.
FY20 LTIFR and FY20 TRIFR include 50% of KCGM safety statistics from 1 January
2020 (date on which Northern Star acquired financial benefit of 50% of KCGM).
FY20 & FY21 Industry means the DMIRS Safety Performance in the Western
Australian Mineral Industry – Accident and Injury Statistics 2018-19 and 2019-20
Metalliferous total.
There was one fatality in FY21 on 13 July 2020 at the Carosue Dam Operations,
under previous Saracen ownership (prior to their merger with Northern Star on 12
February 2021).
Tobi Freeman, Senior
Metallurgist at Thunderbox,
Yandal operations.
NORTHERN STAR RESOURCES LIMITED ANNUAL REPORT 2021NORTHERN STAR RESOURCES LIMITED ANNUAL REPORT 2021 hEALth & SAFEtY
hEALth & SAFEtY
50
Case Study: Work Health and Safety Act
(WHS Act)– Face-to-Face in the Goldfields
There is no doubt that the WHS Act and
associated changes are generating conversation
at all levels of the mining industry. This State-
based harmonisation with National work health and
safety legislation has been anticipated for several years.
The absence of a final draft of the Work Health and
Safety Regulations is contributing to confusion amongst
workers generally in Western Australia, with questions
being asked by employees at all levels of the Company
around what the new legislation will mean for different
roles.
Northern Star’s Health and Safety Department took
the lead in educating our workforce about the changes
under the WHS Act and the consequences, with a
series of site-based face-to-face workshops across
our Western Australian operations. This practical legal
guidance was delivered by a specialist workplace safety
lawyer to a broad range of employees, to upskill them
in preparation for the standards required under the new
legislation.
In collaboration, we developed legal training materials to
educate our workforce and onsite Contractors, including
scrutiny of real case studies of serious incidents in the
mining industry. The assessment and demonstration of
potential legal outcomes was invaluable as a method
to focus the minds of the workforce on the hazards
and risks presented, what should have occurred and
been actioned by whom to mitigate the risk or avert
the incident, as well as understanding the legal liability
implications of safety incidents and near misses for
Northern Star.
Over 70 workshops have been delivered to
approximately 750 Northern Star personnel including
the Board of Directors, the Executive and senior
leadership team, our Safety and Health Representatives,
and the workforce more broadly on site.
The level of active participation and debate during
these ~70 separate workshops demonstrated an
excellent level of engagement in relation to safety and
related topics on site. In addition, the feedback loop has
provided an invaluable perspective on:
•
•
opportunities and recommendations from the
workforce for improvement, and
the areas for further focus in the coming year, to
continue our development of Safety education and
training for our workforce.
This built on legal safety workshops conducted at Pogo
in 2019 by our US specialist workplace safety lawyer.
Educating our
workforce
Jundee personnel
undergo onsite training,
Yandal Operations
51
Northern Star’s Health and Safety Department
took the lead in educating our workforce about the
changes under the WHS Act and the consequences,
with a series of site-based face-to-face workshops
across our Western Australian operations.
•••••••••••••••••••••••••••••••• •••••••••••••••••••••••••••••••• ••••••••••••••••••••••••••••••••
NORTHERN STAR RESOURCES LIMITED ANNUAL REPORT 2021NORTHERN STAR RESOURCES LIMITED ANNUAL REPORT 2021 hEALth & SAFEtY
hEALth & SAFEtY
hAZIDaR Programme
In FY21 we launched a reward-based programme
‘HAZIDaR’ across Group sites to encourage and
incentivise employees:
•
to be more aware of hazards through
established programs such as HAZID and the
Strive for Five at pre-start meetings; and
Figure 1 How HAZIDaR works
•
to identify opportunities to rectify hazards
using the Hierarchy of Control (HoC).
HAZIDaR results are encouraging, with employees
already suggesting innovative changes for a safer
working environment.
training
Northern Star is constantly investigating
opportunities to integrate more technology into
training systems. In FY21 we explored the use of
simulator technologies and virtual reality capabilities
in our training and development programmes,
allowing us to assess our operators and provide
targeted development opportunities.
In FY22, in partnership with Kalgoorlie Central
TAFE, we will be launching a more structured
internal training framework which is aligned with
Australian Qualifications and Training Framework
(AQTF). This will enable Northern Star to utilise
our own training packages, providing employees
with nationally accredited training and professional
development, whilst strengthening the safety
leadership team within Northern Star.
Everyone in the
workplace
• HAZID completed
prior to commencing
any tasks; focus on
Rectification
Pre-Start Meeting
• Open Hazards discussed
• Good & Robust Hazards
discussed (even if closed out)
• Crew discussion of any
key learnings or innovative
solutions: these are also
escalated to Dept Manager
for nomination
• $50 to be given out by
Manager for each excellent
HAZIDaR
52
53
Supervisor / Manager
• Sign off on all HAZIDaR
• Unrectified Hazards recorded on Hazard Board
• Higher level & rectified Hazards also added to Hazard Board
• Total number of Hazards identified & total number rectified
recorded in INX
Jake Benstead and Matthew
McDonald of the Fimiston
Maintenance team, KCGM,
Kalgoorlie Operations.
health
As part of Northern Star’s commitment to the health
and wellbeing of our employees we offer a range of
health and wellbeing services across all operations.
Our EAP providers, site-based programmes and
clinical-level occupational health nurses support
workers in relation to diet and nutrition, mental
health, physical strength and conditioning, as well as
general fitness for work. We understand the support
which is required for employees to maintain mental
health and physical conditioning.
Reflecting on FY21, we are grateful for the learnings
and opportunities identified that have further
strengthened the Company health and safety
system. This has, in turn, provided Northern Star with
the platform to increase our support for the local
communities which our operations form part of.
Systems
Post-merger, it has been Northern Star’s priority
to ensure that Saracen safety systems are
migrated into Northern Star’s internal management
system, INX, so that systems are consistent
across the whole Northern Star Group. This is a
significant undertaking which is therefore being
completed in two phases. Migration involves
creating a centralised location of data and
further educating the workforce on reporting and
recording incidents, capturing recordable hours,
co-ordinating flights and accommodation, and
managing our training requirements to ensure a
consistent
approach is used.
Phase one has been
completed, with
the historical data from Saracen and Northern Star
being reviewed, adjusted to achieve alignment
with Northern Star classifications, combined
and collated into the INX modules “InControl”,
“InTuition” and “InFlight”. We are now in phase two,
aligning and integrating the safety system of the
KCGM Operations into our centralised Northern
Star system.
NORTHERN STAR RESOURCES LIMITED ANNUAL REPORT 2021NORTHERN STAR RESOURCES LIMITED ANNUAL REPORT 2021 PEOPLE & CuLtuRE
PEOPLE & CuLtuRE
54
People & Culture
Our STARR Core Values continue to underpin
how our people work together and provide a solid
foundation for everything we do.
Throughout FY21 Northern Star has grown in
the areas of people engagement, delivery,
training and development, and support.
Building on our work in previous years, we have
continued to actively use data analytics and
technology to better understand our employees’
experience and support our employees and their
families.
Since 2012 Northern Star has offered eligible
employees the opportunity to become shareholders
in the Company through the $1000 Employee
Share Plan. In FY21, the scheme was offered to
new employees who joined with us as part of the
merger with Saracen. We are pleased that now
93% of eligible employees have chosen to become
shareholders in Northern Star, investing in the
Company’s future growth and aligned with our other
shareholders.
Development
In FY20 we developed a customised leadership
development programme, which we continued to
deliver to all of our sites in FY21. The programme
focusses on increasing our leaders’ self-awareness
and strategies to coach and develop their people
and teams. With COVID-19 related travel restrictions
still in place during FY21, we worked with our
Pogo workforce remotely to deliver the leadership
development programme via an interactive online
format, to ensure their development was not
compromised.
Growing our senior leaders’ capability to lead and
develop our people is key to the future success
of the Company. As part of their leadership
development, an internationally recognised
programme, Dare to Lead ™ is being facilitated
across all of our sites through online modules
and one-on-one coaching. This will be further
complemented by additional profiling, coaching,
education, networking and leadership activities
planned for FY22.
Paid Parental Leave
As part of our commitment to a diverse and
inclusive workplace and harmonising our employee
benefits, in August 2021 Northern Star announced
a harmonised Australian paid parental leave benefit.
The maximum benefit provides 20 weeks’ paid
leave, additional return to work payments, and
superannuation and long service leave top up.
This level of benefits positions Northern Star with
industry leaders in Australia, making us an atttractive
employer. The benefit increases with service and
therefore provides an important retention tool in this
period of high people demand. The application in
our US operations is currently being reviewed in line
with applicable legislation and benchmarks, and will
be finalised in FY22.
Culture
Our STARR Core Values are at the heart of our
culture. They guide our decisions and behaviours;
Safety, Teamwork, Accountability, Respect and
Results are all integral to how Northern Star
operates. As part of the merger, we continue to
embed the STARR Core Values across all sites to
ensure that they are understood and adopted by all
employees.
Northern Star uses annual culture surveys to gain an
understanding of our people and their experiences
as Northern Star employees. Pre-merger, our second
culture survey was completed in December 2020
by all Northern Star sites, measuring the STARR
Core Values, engagement and wellbeing. With an
employee participation rate of 82%, the survey
results help us to celebrate what we are doing well,
and identify opportunities for improvement.
After completion, results were delivered to each
site by site leaders. Site teams created actions to
respond to areas identified for improvement. In
FY22, we will conduct a survey to capture the data
of the expanded Group employees and additional
sites to create a new baseline for data across the
whole Northern Star Group and allow us to track
future progress more accurately.
55
L to R: Angelo Villanueva, Cleo
Leunig and Kalum Rogers,
Carosue Dam's Metallurgical
team, Kalgoorlie operations.
NORTHERN STAR RESOURCES LIMITED ANNUAL REPORT 2021NORTHERN STAR RESOURCES LIMITED ANNUAL REPORT 2021 PEOPLE & CuLtuRE
57
Mental health & Wellness
T he mental and physical health and wellbeing
of our employees is our priority. Our
demonstrated strengths during the COVID-19
pandemic are: Northern Star’s culture of Teamwork,
the organic support networks embedded throughout
our workforce, and our increased use of technology
to better connect employees. We have continued to
leverage off these in FY21.
Northern Star’s Mental Health First Aid Programme
continues to expand to ensure our frontline
supervisors and management are equipped through
the 12 hour programme to provide on-the-ground,
early intervention support and referral to their
colleagues who are experiencing mental health
challenges. In FY22, COVID-19 restrictions allowing,
we look forward to re-offering the programme to
people in our near mine communities.
Northern Star’s Contractors make up 42% of
our workforce and we are committed to offering
opportunities to improve and strengthen their
knowledge, mental and physical health and
wellbeing. Northern Star encourages Contractors to
engage and utilise the Group programmes offered
across our sites, including the social activities and
services and access to our EAP Hotline whilst on
site. In FY21, our Contractors also participated in our
WHS Act legislation training and played a critical
role in our F1 Business Improvement Programme,
which involved employees and Contractors
working side by side to solve challenges and create
innovative solutions for our operations. In FY22,
we will continue to offer training and development
opportunities to support a meaningful, constructive
and collaborative relationship with our Contractors.
With a focus on minimising psychosocial harm, we
continue to build on valuable relationships with
our EAP providers, gaining important insights from
de-identified data to understand trends and help us
target interventions to support our workforce, both
employees and site Contractors.
Marie-Clare Parks,
Exploration Geology
Technician at Thunderbox,
Yandal operations.
NORTHERN STAR RESOURCES LIMITED ANNUAL REPORT 2021 PEOPLE & CuLtuRE
PEOPLE & CuLtuRE
Culture & Capability
Our People in Numbers
Figure 1 Key elements that underpin our culture and capability
• GoldStarr Wellness & Benefits Hub
• Second opinion Best Doctors service
• FaceTime Exercise Physiologists
• Mindfulness & Workout Programs
• Industry Leading Mental Health Programs
• 300 internationally accredited Mental
Health First Aider
Attract
& Retain
• World class Assets
• Diverse Portfolio
• Growth Trajectory
• Huge Intellectual Capital
• Employee Engagement Specialist
• Culture Checkpoint Survey
• Cloud based Communications
Platform
Wellness
Develop
58
• Agile, fast feedback culture
• Succession development KMP
• Digital Performance Dashboards
• Cross-Asset, Cross-Discipline
Development Program
high
Performance
Gender Balance
Figure 2 Gender composition of the workforce in Australia (% females)
• Graduate Program
• Customised Capability
Framework
• Emerging Leaders
Program
• 360 Degree Feedback
Senior Leaders
• 1-on-1 Coaching
.
0
2
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s
i
l
b
u
p
t
s
a
l
KMP (excluding CEO)
Directors
Other Executives /
General Managers
4.8%
Senior Managers
Other Managers
Non-Managers
13.6%
15.4%
15.3%
18.5%
18.0%
30.8%
25.0%
33.3%
29.9%
25.4%
24.3%
Key
Northern Star
Comparison group*
s
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e
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G
A
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G
W
l
Employees who
are shareholders
Female
participation
Apprentices/trainees
and Graduates
80% 24% 8%
total
employees^
total Contractors
across Group sites
3,383 2,524
59
Culture Survey
Engagement
76%
Positive
+1%
Wellbeing
75%
Positive
+4%
Respect
71%
Positive
+2%
teamwork
70%
Positive
+4%
Participation rate: 82%. Sites surveyed: Pogo, Kalgoorlie Operation, Jundee, Bronzewing, Corporate
NORTHERN STAR RESOURCES LIMITED ANNUAL REPORT 2021NORTHERN STAR RESOURCES LIMITED ANNUAL REPORT 2021
SuStAINABILItY
SuStAINABILItY
Sustainability
Northern Star regularly identifies and updates the range of
sustainability issues which we consider are likely to affect the
financial condition or operating performance of Northern Star.
Northern Star’s Mission
To generate superior returns for our shareholders, while providing
positive benefits for our stakeholders, through operational
effectiveness, exploration and active portfolio management.
The image below reflects the SASB
financial materiality map for
Northern Star, based on our industry.
60
Employees
STARR Core Values
Physical and mental wellbeing
Inclusion, diversity, fair processes
Competitive pay and benefits
Environment
Energy use and GHG emissions
reduction focus
Water security and efficient use
Hazardous material and waste
management
Rehabilitation and closure
In FY21 we undertook an ESG perception
study involving direct discussion by an
external consultant with institutional investors
representing one third of the Company’s register,
both before and after the merger. This allowed
us to explore whether there were any unforeseen
or unexpected common themes of interest in
relation to the sustainability of our operations
across our institutional shareholders, as well as
identify opportunities to meet stakeholders’ general
expectations from an ESG perspective in relation to
future operational decisions and ESG disclosures.
For instance, the study informed us on how some
investors are formally pricing carbon and taking into
account water use when assessing relative valuation
whilst other investors focus more on potential
controversies and reputational risk areas in the
communities in which we operate, and human rights
violations risks.
We think it is important that our workforce have the
opportunity to fully understand the sustainability
issues for Northern Star’s business, and we aim
to increase the level of information and education
extended to our workforce in this area, for example
in offering presentations on our TCFD journey to
date. This level of communication is particularly
important following the merger to ensure that all
employees have the opportunity to understand
and appreciate how Northern Star is increasing its
operational resilience and enhancing its business
continuity for future value creation for shareholders.
To allow employees’ added involvement in
relation to sustainability issues for Northern Star,
we facilitated several externally facilitated ESG
Figure 1 Voluntary Alignments
Native flora at
Thunderbox, Yandal
operations.
Focus Group discussions with voluntary employee
participants across most sites. This provided
valuable insights on what is important to our
workforce allowing us to recalibrate the information
provided to employees and included in decision
making.
Annually, an employee representative is appointed
to attend ESS Committee meetings, to increase
employee engagement in the Committee’s
discussions and recommendations to the Board.
We continue our climate change related risk
assessment work aligned to the recommendations
of the Task Force on Climate-Related Financial
Disclosures (TCFD) and support continued action on
the UN Sustainable Development Goals (SDGs).
61
Social
Governance
Support local economic development
Social and community support
Increase local employment and procurement
Free Prior and Informed Consent principles
Prudent financial and operational
management
Corporate governance and ethics
Risk management framework
Supply chain integrity
Governance
Strategy
Risk
Metrics
& targets
We understand and appreciate that disclosing
our sustainability performance is a critical part of
gaining and maintaining stakeholder trust. In FY21,
we established a dedicated ESG engagement
team reporting direct to the Executive, and we
strengthened our resources to improve the range,
quality and integrity of data on sustainability issues.
This includes the use of Nasdaq’s OneReport unified
platform for responding to sustainability questions
raised by external stakeholders allowing us to more
efficiently participate in reporting such as CDP, GRI
and S&P Dow Jones.
NORTHERN STAR RESOURCES LIMITED ANNUAL REPORT 2021NORTHERN STAR RESOURCES LIMITED ANNUAL REPORT 2021 SuStAINABILItY
SuStAINABILItY
Climate Change
Figure 2 Net Zero ambition for Scope 1-2 GHG Emissions by 2050
Our current focus is to ensure operational resilience
to climate change related risks and setting clear
greenhouse gas emissions reduction targets.
Focussing our efforts on first modifying the source
of electricity at our operations provides the greatest
opportunity for change in our emissions profile.
2021
2030
Existing
Technology
2040
Innovation
path
Indicative Scope 1-2
way (t C
O2-e)
Renewable Energy
- Wind
Renewable
Energy -
Wind & Solar
Electrified
Fleet
Battery
/Electrified
Fleet
Hydrogen
Fleet
Gas,/Propane,
Coal, Diesel
Gas, Diesel
62
Grid, Gas, Diesel
Grid Greening
Renewable Energy -
Wind & Solar
Electrified/
Hydrogen Fleet
Key
Kalgoorlie
Yandal
Pogo
Carbon Capture Offsets
In FY21 our Board embraced a shift in focus to
mitigating climate change related risks. Northern
Star adopted a Climate Change Policy (nsrltd.com/
about/corporategovernance) announcing Net Zero
ambition for scope 1-2 greenhouse gas emissions
by 2050. Detailed planning for our Paris-aligned1
emissions reduction roadmap is underway to be
disclosed in our 2021 Sustainability Report for
release in March 2022.
Detailed planning for our
Paris-aligned emissions
reduction roadmap is underway
to be disclosed in our 2021
Sustainability Report.
1. Paris-aligned refers to ‘The Paris Agreement’ the legally binding international treaty on climate change which was adopted by 196 Parties at the 21st
session of the United Nations Conference of the Parties, in Paris on 12 December 2015, and entered into force on 4 November 2016.
Figure 3 Northern Star Scope 1 & 2 Emissions by Source (t CO2-e)
3%
Haulage & LV
Transport - On Road
(Diesel, ULP)
25%
Mine Fleet transport -
Off Road (Diesel)
2%
Other (Grease,
Acetylene,
Lubricants, LPG)
70%
Electricity - Purchase
& Generated (Grid,
Gas, Diesel)
Yvonne Hynes, Senior
Environmental & Social
Responsibility Advisor at Kanowna
Belle, Kalgoorlie Operations.
Northern Star’s Sustainability Report
Northern Star publishes a standalone annual
Sustainability Report on our ESG performance on a
calendar year basis. Our 2020 Sustainability Report
released on 11 February 2021 contains detailed ESG
data, case studies and other disclosures aligned to
SASB, TCFD and the UN SDGs.
Sustainability
Report 2020
View our most
recent
Sustainability
Report
Visit:
nsrltd.com/
sustainability
NORTHERN STAR RESOURCES LIMITED ANNUAL REPORT 2021
NORTHERN STAR RESOURCES LIMITED ANNUAL REPORT 2021 SuStAINABILItY
SuStAINABILItY
heritage related infringements or human rights
violations detected in our supply chain
Materially adverse Community incidents
Local Community Engagement
Northern Star acknowledges that our activities
impact the local communities near our operations,
and that those impacts, both negative and positive,
are critical to maintaining our social licence to
operate. Our Mission commits us to providing
positive benefits for our stakeholders through
operational effectiveness, exploration and active
portfolio management.
By way of example of one of the communities we are
integrated in, Northern Star’s acquisition of 100%
of KCGM in FY21, the Company’s commitment to
working with the communities in Kalgoorlie-Boulder
can be summarised as follows:
1.
Ensuring that our operations are mutually
beneficial by investing in our majority
residential workforce and supporting local
businesses and community groups.
2.
3.
Being responsive to those impacted by
our operations by engaging with near-mine
communities in a timely and respectful manner,
and by responding to complaints promptly.
Listening to communities so that we
understand the issues that matter most to
them.
4. Understanding our impacts through impact
assessments of major projects, and the
ongoing monitoring of the social, economic
and environmental impacts of our operations.
5. Holding ourselves to account by making
publicly-available the results of quarterly
Kalgoorlie-Boulder Community Pulse
surveys by independent external consultant
VoconiqTM on KCGM’s social performance
and environmental monitoring, at: https://
voconiqlocalvoices.com/results-kcgm/.
65
KCGM External Relations Advisors
examine a Marsdenia australis fruit with
Kym Eckert from the Kalgoorlie-Boulder
Urban Landcare Group, Kalgoorlie.
Economic Value Add
The economic value that Northern Star returns
to society has seen year-on-year growth, and
totals $ 3.4B for FY21. The figure below provides
a breakdown of those economic contributions,
including State and Federal taxes and charges,
employee and supplier spend, community
investments, donations and sponsorship, and
dividends paid to shareholders in the year to 30
June 2021.
Figure 4 FY21 Total Economic Value Add2
$4M
Community
Investments
$348M
Tax, Stamp Duty &
WA Gov Royalties
64
total Economic
Value Add
$3.4B
$353M
Dividends Paid to
shareholders
$2,165M
Goods & Services Payments
$493M
Total Employee Costs
Modern Slavery
Northern Star condemns all human rights abuses,
including modern slavery practices in all its forms.
Modern slavery is a business risk for every industry
and sector, which has severe consequences for
victims. We recognise our role in protecting the
human rights of all people involved in, or impacted
by, our business practices. We take meaningful steps
to identify and address our modern slavery risks and
maintain responsible and transparent supply chains.
In February 2021, Northern Star published its first
mandatory Modern Slavery Statement under the
Modern Slavery Act 2018 (Cth) covering FY20. An
update on steps taken by us in H1 FY21 appeared in
our 2020 Sustainability Report.
Please refer to our FY21 Modern Slavery Statement
released together with this Report for detailed
disclosures on how we are addressing modern slavery.
View our
FY21 Modern
Slavery Statement.
Visit:
nsrltd.com/about/
corporate-governance
24 August 2021
nsrltd.com
| Northern Star Resources Limited Modern Slavery Statement covering financial year ended 30 June 2021
2. This figure includes all Northern Star Group entities as at 30 June 2021 for full year FY21, i.e. 100% Saracen and 100% KCGM, notwithstanding the merger
implementation date of 12 February 2021
NORTHERN STAR RESOURCES LIMITED ANNUAL REPORT 2021NORTHERN STAR RESOURCES LIMITED ANNUAL REPORT 2021
SuStAINABILItY
SuStAINABILItY
Indigenous Peoples
Indigenous Peoples remain important long-term
stakeholders and partners of Northern Star.
We acknowledge that Indigenous Peoples often
maintain special physical and cultural connections
to, and identification with, the lands on which we
conduct our business activities. Cultural knowledge
created through this connection with the natural
environment can be of value to our Company and
brings different perspectives for us to consider within
project planning and development practices.
Through this understanding, we strive to develop
and maintain respectful, long-term and mutually
beneficial relationships with all Indigenous Peoples
who are our stakeholders.
Critical to these relationships is an awareness that
Indigenous Peoples in many regions across the world
have been historically disadvantaged by economic,
social and political systems. In some regions this
disadvantage remains.
In response to this understanding, we commit to the
2013 International Council on Mining and Metals
(ICMM) Position Statement on Indigenous Peoples
and Mining.
Specific to the ICMM Position Statement, we
continue to adopt the Free, Prior and Informed
Consent (FPIC) approach to our engagement
with Indigenous Peoples, as defined by the United
Nations.
Figure 5 Free, Prior and Informed Consent approach
Governance
Northern Star is committed to consistently
demonstrating the highest standards of corporate
governance. The Company’s current corporate
governance practices are set out in the FY21
Corporate Governance Statement released
together with this Report and found on Northern
Star's website at http://www.nsrltd. com/about/
corporate-governance/.
Northern Star is
committed to consistently
demonstrating the highest
standards of corporate
governance.
_ - - - - - - - - - - - - - - - - - - - - - -
Kristen Anderson,
Martu Ranger at Jundee,
Yandal operations
66
Free
Free from
manipulation
or coercion
Consent
Reached through
customary decision-
making processes
Prior
Occurs in advance of any
activity associated with
the decision being made
and allows adequate time
for traditional decision-
making processes
Informed
Facilitate the
sharing of objective,
accurate, and easily
understandable
information
NORTHERN STAR RESOURCES LIMITED ANNUAL REPORT 2021
NORTHERN STAR RESOURCES LIMITED ANNUAL REPORT 2021
Directors’
Report
DIRECtORS' REPORt
DIRECtORS' REPORt
Directors’ Report
Your Directors present their report on the consolidated
entity consisting of Northern Star and the entities it
controlled at the end of, or during, FY21.
Current
Directors
(as at the
Report Date)
Michael Chaney AO
Chairman
Stuart Tonkin
Managing Director & CEO
Raleigh Finlayson
Executive Director
Overview of Board changes
On the merger implementation date of 12 February 2021, the
Board was reconstituted with the addition of Raleigh Finlayson
as Managing Director, Anthony Kiernan as Lead Independent
Director, and Sally Langer and John Richards as Non-Executive
Directors, all from the Saracen Board of Directors.
Peter O’Connor retired from the Board on 12 February 2021.
Subsequently on 30 June 2021 Shirley In’t Veld retired as Non-
Executive Director, and Bill Beament, retired as Executive Chair
on 1 July 2021. On 1 July 2021 Michael Chaney joined the Board as
Chairman. On 22 July 2021 Raleigh Finlayson retired as Managing
Director, and Stuart Tonkin joined the Board as Managing Director
& CEO.
70
Anthony Kiernan AM
Lead Independent Director
Mary Hackett
Non-Executive Director
John Fitzgerald
Non-Executive Director
On 23 August 2021, the Company announced that Sharon
Warburton will join the Board on 1 September 2021.
71
John Richards
Non-Executive Director
Nick Cernotta
Non-Executive Director
Sally Langer
Non-Executive Director
Incoming
Director
Former
Directors
Figure 1 Board statistics effective 1 September 2021 (includes incoming Director)
Gender
Independence
Age
Sharon Warburton
Non-Executive Director,
(commencing 1 September 2021)
Female
30%
Non-
Independent
20%
70+
20%
60-69
10%
40-49
40%
Bill Beament
Executive Chair
(resigned 1 July 2021)
Shirley In’t Veld
Non-Executive Director
(resigned 30 June 2021)
Peter O’Connor
Non-Executive Director
(resigned 12 February 2021)
Male
70%
Independent
80%
50-59
30%
NORTHERN STAR RESOURCES LIMITED ANNUAL REPORT 2021NORTHERN STAR RESOURCES LIMITED ANNUAL REPORT 2021 DIRECtORS' REPORt
DIRECtORS' REPORt
72
Biographies of current Directors
Michael Chaney AO
BSc, MBA, Hon. LLD W.Aust, FAICD
Independent Chairman
Term of office: Director since 1 July 2021
Mr Chaney AO was appointed Chairman on 1 July
2021. He is currently Chairman of Wesfarmers
Limited and was previously Chairman of Woodside
Petroleum Limited (retired April 2018) and National
Australia Bank (retired December 2015); a former
Director of BHP Limited (retired October 2005) and
Managing Director of Wesfarmers from 1992 to
2005.
Mr Chaney holds Bachelor of Science and Master of
Business Administration degrees from The University
of Western Australia and worked for eight years as
a petroleum geologist in Australia and the USA. He
completed the Advanced Management Program at
Harvard Business School in 1992 and has also been
awarded an Honorary Doctorate of Laws from The
University of Western Australia.
He is former Chancellor of The University of Western
Australia (retired December 2017) and former
Governor of the Forrest Research Foundation
(resigned December 2020). Michael is currently
Chair of the National School Resourcing Board, a
Director of the Centre for Independent Studies and
a member of the Gresham Resources Royalties Fund
Investment Committee.
Board skills matrix: Executive Leadership,
Finance / Commerce / Accounting, Capital Markets,
Previous Board Experience, and Strategy
Stuart tonkin
BEng (Hons)
Managing Director & CEO
(Chief Executive Officer for FY21 )
Term of office: Director since 22 July 2021
Mr Tonkin is a mining engineer with more than
20 years’ experience working in the underground
hard-rock mining industry. He was appointed Chief
Executive Officer of Northern Star in November
2016 and had been the Company’s Chief Operating
Officer since 2013. Prior to joining Northern
Star, he was Chief Operating Officer for mining
contractor Barminco, and a Non-Executive Director
of African Underground Mining Services Ghana.
He has extensive experience in the production of
gold, copper, zinc and nickel and has held senior
operational positions with Oxiana and Newmont
in Western Australia. Mr Tonkin is currently a
Director of the Gold Industry Group, a not-for-profit,
member-based industry association.
Board skills matrix: Executive Leadership, HSE,
Major Projects/Construction, Technical skills in
Resources, Industry Knowledge, Commodities
exposure, Risk management & Compliance, Mergers
and Acquisitions.
Raleigh Finlayson
AdMineSurvey, Bsc (Mine & Engineering Surveying),
GradDipMinEng, GradCertAppFin
Executive Director (Managing Director
from 12 February 2021 to 22 July 2021)
Term of office: Director since 12 February 2021
Mr Raleigh Finlayson is a mining engineer with over
20 years’ of technical and operational experience in
the mining industry in multiple disciplines including
both underground and open pit operations. Mr
Finlayson commenced with Northern Star as
Managing Director following the merger.
During his 13-year tenure at Saracen, Mr Finlayson
was responsible for the acquisition and subsequent
development of Saracen’s second operating mine,
the Thunderbox project for $23M and the purchase
of 50% of the KCGM Super Pit for $1.1B in 2019.
growing from a market cap from $53M in 2008 to
$6.0B in 2021 before merging with Northern Star.
Prior to Saracen Mr Finlayson was Underground
Manager for Panoramic Resources and various mining
engineering roles with OceanaGold and Gold Fields.
Mr Finlayson studied at the Western Australian
School of Mines holds a First Class Mine Managers
Certificate. He served for 5 years on the WA School
of Mines Alumni Council.
Board skills matrix: Executive Leadership, Capital
Markets, Technical skills in Resources, Industry
Knowledge, Risk Management & Compliance,
Strategy, Mergers and Acquisitions
Anthony Kiernan AM
LLB
Lead Independent Director since
12 February 2021
Term of office: Director since 12 February 2021
Mr Anthony Kiernan is a former solicitor
with extensive experience, particularly in the
management and operation of listed public
companies in the resource sector through
exploration, development and production. Mr
Kiernan has a strong understanding of the capital
markets and the business of value creation. Mr
Kiernan is currently Chairman of Pilbara Minerals Ltd
and was previously Chairman of Venturex Resources
Limited and Saracen Mineral Holdings Limited.
Board skills matrix: Capital Markets, Previous
Board Experience
John Fitzgerald
CA, Fellow FINSIA, GAICD
Independent Non-Executive Director
(Lead Independent Director until 12
February 2021)
Term of office: Director since November 2012
Mr Fitzgerald has over 25 years’ resource financing
experience and has provided project finance and
corporate advisory services to a large number of
companies in the resource sector. He has previously
held senior positions at NM Rothschild & Sons,
Investec Bank Australia, Commonwealth Bank, HSBC
Precious Metals and Optimum Capital. Mr Fitzgerald
is a Chartered Accountant, a Fellow of the Financial
Services Institute of Australasia and a graduate
member of the Australian Institute of Company
Directors.
Board skills matrix: Finance / Commerce /
Accounting, Capital Markets, Commodities
exposure, Previous Board Experience, Risk
Management & Compliance
Mary hackett
B.Eng-Mech, FIEAUST, GAICD
Independent Non-Executive Director
Term of office: Director since July 2019
Ms Hackett has an extensive career in the resource
sector, spanning more than 30 years, with senior
executive roles in Brown & Root, Woodside, and
General Electric. Her most recent executive role
was Vice President of General Electric Oil & Gas for
Australasia.
A fellow of Engineers Australia, Ms Hackett holds a
degree in Mechanical Engineering from University
College Galway, Ireland.
Board skills matrix: Executive Leadership, ESG /
Legal / Regulatory / Policy, HSE, Major Projects
/ Construction, Risk Management & Compliance,
Strategy, Mergers and Acquisitions
Nicholas Cernotta
B.Eng-Mining
Independent Non-Executive Director
Term of office: Director since July 2019
Mr Cernotta is a mining engineer having held senior
operational and executive roles in Australia and
overseas for over 30 years. He has considerable
experience in the management and operation of
large resource projects, with a track record for
improving safety performance, managing costs
and improving operational efficiencies, across
multiple commodities and international jurisdictions.
Most recently Mr Cernotta served as Director
of Operations at Fortescue Metals Group, and
was previously Director of Operations for Barrick
(Australia Pacific) Pty Ltd.
Board skills matrix: Executive Leadership,
HR / Workplace Relations, HSE, Major Projects
/ Construction, Technical skills in Resources,
Commodities exposure, Risk Management &
Compliance, Strategy
John Richards
BEcon (Hons)
Independent Non-Executive Director
Term of office: Director since 12 February 2021
Mr Richards is an economist with more than 35
years’ experience in the resources industry. He has
held strategy and business development positions
across several mining companies and has worked
extensively in the investment banking and private
equity industries. He has been involved in a wide
range of mining M&A transactions on a global scale.
Previous experience has included Group Executive
– Strategy & Business Development at Normandy
Mining Ltd, Head of Mining & Metals Advisory
(Australia) at Standard Bank, Managing Director at
Buka Minerals Ltd and Operating Partner at Global
Natural Resources Investments (GNRI).
Board skills matrix: Finance / Commerce /
Accounting, International Growth, Industry
Knowledge, Commodities exposure, Strategy,
Mergers and Acquisitions
Sally Langer
BCom, CA, GAICD
Independent Non-Executive Director
Term of office: Director since 12 February 2021
Ms Langer has more than 25 years’ experience in
professional services across a variety of sectors,
including substantial experience in the resources
sector, where she has advised both ASX-listed and
private boards on talent, organisational design,
succession planning and leadership. Ms Langer has
also been responsible for management functions
including strategy, business development, budgeting
and human resources. Originally qualified as an
accountant with Arthur Andersen, Ms Langer
spent time in their insolvency, corporate finance
and management consulting practices before
transitioning into Executive Search initially with
Michael Page and subsequently Derwent Executive,
where for 13 years she led Derwent’s national
Mining Practice based in Western Australia.
Board Skills matrix: Executive Leadership, HR/
Workplace Relations, Finance / Commerce /
Accounting
73
NORTHERN STAR RESOURCES LIMITED ANNUAL REPORT 2021NORTHERN STAR RESOURCES LIMITED ANNUAL REPORT 2021 The Carosue Dam
processing plant at sunrise,
Kalgoorlie Operations.
DIRECtORS' REPORt
Biography of incoming Director
Biographies of former Directors
Sharon Warburton
CA, BBus, GAICD
Independent Non-Executive Director
(commencing 1 September 2021)
Ms Warburton is a Chartered Accountant with
experience in the construction, mining and
infrastructure sectors, holding senior executive
positions at Rio Tinto, Brookfield Multiplex, Aldar
Properties PJSC, Multiplex and Citigroup. Ms
Warburton is a non-executive director of Gold
Road Resources Limited (retiring from that role on
30 September 2021), Worley Limited, Wesfarmers
Limited and Blackmores Limited and a part-time
member of the Takeovers Panel. She is also on the
board of not-for-profit organisation, Perth Children’s
Hospital Foundation and a non-executive Director
of Karlka Nyiyaparli Aboriginal Corporation RNTBC.
She was formerly the Co-Deputy Chair of Fortescue
Metals Group Limited, Chairman of the Australian
Government's Northern Australia Infrastructure
Facility and a non-executive director of NEXTDC
Limited. Ms Warburton holds a Bachelor of Business
(Accounting and Business Law) from Curtin
University. She is a Fellow of Chartered Accountants
Australia and New Zealand, the Australian Institute
of Building and the Australian Institute of Company
Directors. She was awarded WA Telstra Business
Woman of the Year in 2014 and was a finalist for The
Australian Financial Review’s Westpac 100 Women
of Influence in 2015.
Board skills matrix: Executive Leadership,
Finance/Commerce/Accounting, Major Projects/
Construction, International Growth, Capital Markets,
Industry Knowledge, Commodities exposure,
Previous Board Experience, Risk management &
Compliance, Strategy, Mergers and Acquisitions
74
Bill Beament
B.Eng-Mining (Hons), MAICD
Executive Chair in FY21
Mr Beament is a mining engineer with more than 20
years’ experience in the resource sector. Previously
he held several senior management positions,
including General Manager of Operations for
Barminco Limited with overall responsibility for 12
mine sites across Western Australia, and General
Manager of the Eloise Copper Mine in Queensland.
Shirley In’t Veld
B.Com LLB (Hons)
Independent Non-Executive Director in
FY21
Ms In’t Veld was the CEO of Verve Energy, a WA
utility, for five years. Prior to this Ms In’t Veld held a
number of senior commercial, legal and marketing
positions with Alcoa, WMC Resources Ltd, Bond
Corporation and BankWest, including Managing
Director of Alcoa of Australia Rolled Products based
in Geelong.
Peter O’Connor
MA, Economics and Political Science;
Barrister-at Law
Independent Non-Executive Director in
FY21 until 12 February 2021
Mr O’Connor has extensive global experience in the
funds management industry, both public and private
companies in developed and emerging economies.
He was co-founder, Director and Deputy Chairman of
IMS Selection Management Ltd which had $10 billion
under management or advice from 1998 to 2008.
Following the sale of IMS to BNP Paribas in 2008,
he was Deputy Chairman of FundQuest UK Ltd
with $10 billion under management, and FundQuest
globally had $35 billion of assets under management
from 2008 to 2010. Mr O’Connor was the Lead
Director and then Chairman of TSX-listed Neo
Material Technologies from 1993 to 2012.
NORTHERN STAR RESOURCES LIMITED ANNUAL REPORT 2021 DIRECtORS' REPORt
DIRECtORS' REPORt
Directors
Directors during FY21
The following persons were on the Board of Directors
during the financial year ended 30 June 2021:
Directors for full year FY21
Bill Beament Executive Chair
John Fitzgerald Non-Executive Director
Shirley In’t Veld Non-Executive Director
Mary Hackett Non-Executive Director
Nick Cernotta Non-Executive Director
Directors for part year FY21
Peter O’Connor Non-Executive Director
Raleigh Finlayson Managing Director
Anthony Kiernan AM Lead Independent Director
John Richards Non-Executive Director
Sally Langer Non-Executive Director
76
Treescape, Carosue Dam,
Kalgoorlie Operations
Former Directors
The following persons have resigned from the Board of
Directors:
Peter O’Connor resigned as a Non-Executive Director
on 12 February 2021
Shirley In’t Veld resigned as a Non-Executive Director
on 30 June 2021
Bill Beament resigned as Executive Chair on 1 July 2021
New Directors since FY21
Since the end of FY21, the following persons have been
appointed to the Board of Directors:
Michael Chaney Chairman on 1 July 2021
Stuart Tonkin Managing Director & CEO on 22 July
2021
Sharon Warburton is commencing as a Non-Executive
Director on 1 September 2021.
Company Secretary
Hilary Macdonald LLB (Hons), FGIA, was the Company
Secretary (in addition to her role as General Counsel)
for full year FY21. Ms Macdonald is a corporate and
resources lawyer with 30 years’ experience in the UK
and Australia with particular focus on corporations
compliance and governance.
table 1 Directorships in listed companies held by members of the Board over the past 3 years
Director
Entity
Appointment
Bill Beament
Managing Director of Venturex Resources Limited
Jul 2021 to present
John Fitzgerald
Director of Danakali Limited
Chair of Medallion Metals Limited
Executive Chair of Turaco Gold Ltd
Shirley In’t Veld
Director of APA Group
Director of Alumina Limited
Director of Venturex Resources Ltd
Mary Hackett
Director of Strike Energy Limited
Nick Cernotta
Director of Pilbara Minerals Ltd
Chair of Panoramic Resources Limited
Director of New Century Resources Ltd
Peter O’Connor
Chair of Boss Energy Ltd
Anthony Kiernan Chairman of Pilbara Minerals Ltd
Chairman of Venturex Resources Ltd
Chairman of Redbank Copper
John Richards
Director of Sandfire Resources Limited
Director of Sheffield Resources Ltd
Director of Adriatic Metals Plc
Sally Langer
Director of Sandfire Resources Limited
Director of MMA Offshore Limited
Feb 2015 to present
Jan 2019 to present
July 2021 to present
Mar 2018 to present
Aug 2020 to present
July 2021 to present
Oct 2020 to present
Feb 2017 to present
May 2018 to present
Mar 2019 to present
Jan 2020 to present
July 2016 to present
July 2010 to Mar 2021
April 2021 to present
Jan 2021 to present
Aug 2019 to present
Nov 2019 to Jul 2020
Jul 2020 to present
May 2021 to present
77
Michael Chaney
Chairman Wesfarmers Limited
Nov 2015 to present
Raleigh Finlayson None applicable
Stuart Tonkin
None applicable
MSCI ESG Ratings
Northern Star’s MSCI Ratings Report for 2021
which measures resilience to long term ESG risk
puts Northern Star in the top quartile for corporate
governance and corporate behaviour.
Northern Star was upgraded from an A to a AA
rating in FY21 on the basis of enhanced assessment
of governance practices and lower water risk
exposure.
MSCI
ESG RATINGS
AA
CCC
B
BB
BBB
A
AA
AAA
NORTHERN STAR RESOURCES LIMITED ANNUAL REPORT 2021NORTHERN STAR RESOURCES LIMITED ANNUAL REPORT 2021 DIRECtORS' REPORt
DIRECtORS' REPORt
Board Committees
Following the merger with Saracen implemented
on 12 February 2021, the Board resolved to create
a new Exploration & Growth (E&G) Committee,
chaired by independent Non-Executive Director,
John Richards. The function of the E&G
Committee is to assist the Board in its oversight of
management’s decisions on capital expenditure
allocation for exploration, organic and inorganic
growth initiatives. Its key aim is to ensure
competing capital expenditure priorities across the
Company are guided by the following principles:
• maximising shareholder value, in accordance
with the Company’s mission;
•
•
take into account various stakeholder interests, in
accordance with our Mission; and
consistency with the Company’s overarching
corporate strategy and fiscal framework.
table 2 Committee membership and Director attendance 1 at meetings held during FY21
Director
Board
Audit
& Risk
Environmental
Social &
Safety
Exploration
& Growth
Nomination Remuneration
Non-
Executive
Directors2
Bill Beament
Chair
15 of 17
-
Member
4 of 4
John
Fitzgerald
Shirley
In’t Veld
Member
17 of 17
Chair
4 of 4
Member
14 of 17
Member
3 of 3
-
-
Mary Hackett Member
16 of 17
Member
4 of 4
Chair
4 of 4
Nick
Cernotta
Raleigh
Finlayson
John
Richards
Anthony
Kiernan
Sally Langer
Member
17 of 17
Member
3 of 3
Member
7 of 7
-
Member
7 of 7
Member
1 of 1
Member
7 of 7
-
Member
7 of 7
Member
1 of 1
Peter
O’Connor
Member
10 of 10
-
-
-
-
Member
2 of 2
-
Member
2 of 2
Member
2 of 2
-
Member
2 of 2
-
Member
2 of 2
-
Chair
2 of 2
-
-
-
Member
3 of 3
Member
3 of 3
Member
3 of 3
Member
3 of 3
Member
3 of 3
-
Member
3 of 3
Chair
3 of 3
Member
3 of 3
-
-
-
Member
13 of 14
-
-
Chair
14 of 14
-
-
Member
6 of 6
Member
7 of 7
Member
6 of 7
Chair
4 of 4
Member
3 of 4
Member
4 of 4
Member
4 of 4
-
Member
1 of 1
Member
0 of 0
Member
1 of 1
Member
4 of 4
78
table 3 Committee composition and membership for FY223
Director
Audit & Risk
Environmental
Social & Safety
Exploration
& Growth
Remuneration
Nomination
Chair
Members
John Fitzgerald
Mary Hackett
John Richards
Nick Cernotta
Michael Chaney
Mary Hackett
John Richards
Sally Langer
Sally Langer
Anthony Kiernan
Nick Cernotta
Michael Chaney
John Fitzgerald
Sally Langer
Anthony Kiernan
John Fitzgerald
Mary Hackett
Nick Cernotta
John Richards
Sally Langer
Anthony Kiernan
1. The number of meetings held during the time the Director held office, or was a member of the Committee, during FY21 at which the Director was eligible
to attend (i.e. excludes any meetings at which the Director was excluded for example due to a conflict of interest, or which the Director attended but in an
invitee/observer capacity only). A dash indicates the Director was not a member of that Committee at any time during FY21. Note higher than usual total
Board meetings is due to several special Board meetings held in connection with the merger.
2. During FY21 meetings of the Non-Executive Directors were held separately to the full Board meetings without the Executive Chair, CEO or Managing
Director in attendance. A higher than usual number of NED meetings were held due to discussions around KMP remuneration and the merger.
3. Sharon Warburton will be appointed to Committees once commenced on 1 September 2021.
Board evaluation
In addition to the annual performance evaluation
of each individual Director conducted by the
Executive Chair, in FY21 the Board again undertook
a comprehensive evaluation conducted by external
governance specialists at Nasdaq Corporate
Solutions. The objective of the evaluation was to:
• provide the Board with an unbiased, greater
understanding of its functioning and
performance;
In addition to the effectiveness of the Board, the
evaluation also covered the sub-committees of
the Board – the Audit and Risk Committee, the
Remuneration Committee, the Environmental, Social
& Safety Committee, the Nomination Committee
and the Exploration & Growth Committee. Separate
evaluation reports were created for each sub-
committee, for discussion at sub-committee level.
The areas of assessment included:
• highlight areas of strength and opportunities for
• Mission and Values
improvement;
• encourage positive relationships among Board
members, and
•
improve the Board’s overall performance and
effectiveness.
Effective corporate governance advances the
Company’s culture of continuous improvement.
Nasdaq anonymously gathered and assessed
Directors’ individual responses to questions crafted
by governance specialists in conjunction with
the Company Secretary, aligned with Northern
Star’s business and governance goals. The web-
based Q&A accommodated insightful, more
comprehensive contributions where Directors
wished to expand on their responses, and delivered
an actionable report of aggregated and anonymous
individual responses and comments. There was
subsequent opportunity for discussion on any outlier
results and patterns in the responses.
• Ethics and Accountability
• Board Composition and Culture
• Board Meetings and Administration
• Strategy and Performance Measures
• Board’s Relationship to Management
• Risk Monitoring and Crisis Control
• Succession Planning and Human Resources
•
shareholder and stakeholder Involvement, both
generally and specific to the mining industry.
Various areas were identified in the evaluation
report for focus and action by the Board.
79
The Board will address these action points during
FY22 and in subsequent years. The Board intends
to repeat the evaluation in FY22.
Alex Boceski, Purchasing
Officer, Corporate office,
Perth.
NORTHERN STAR RESOURCES LIMITED ANNUAL REPORT 2021NORTHERN STAR RESOURCES LIMITED ANNUAL REPORT 2021 DIRECtORS' REPORt
DIRECtORS' REPORt
Board skills matrix
The Company first devised a Board skills matrix
in 2018, for each Director to self-assess their
hard skills and experience considered relevant to
Northern Star and soft skills considered desirable
for effective Directors generally.
An assessment of the composition of the Board
is undertaken in relation to the Board skills matrix
annually, to identify any potential gaps and ensure
there is an appropriate balance of skills, experience,
expertise and diversity on the Board.
The review of the Board skills matrix during FY21
following the merger and reconstitution of the
Board resulted in:
•
•
the addition of four new skills – International
Growth; Industry Knowledge; M&A
experience; and Industry & Political; and
changes to the descriptors of some of the skills,
to ensure the skills in the matrix remained
suitable for the Company post-merger.
The below includes Sharon Warburton.
Executive
Leadership
Evaluating the
performance of senior
management, overseeing
strategic human capital
planning, industrial
relations, organisational
change management
programmes and
sustainable success in
business at a senior level.
Finance /
Commerce /
Accounting
Financial accounting
and reporting, internal
financial and risk
controls, corporate
finance and, restructuring
corporate transactions
(eg: JVs, listings etc).
Understanding of the
sensitivity to cash flow
and value of key variables.
ESG, Legal /
Regulatory, Policy
Experience in integrating
environmental, social
and governance (ESG)
principles into company
decision-making,
expertise in sustainability
initiatives, working in a
legal and/or regulatory
role or organisation,
and identifying key ESG
issues and developing
appropriate policy
parameters.
hR / Workplace
Relations
Board Remuneration
Committee membership
or, succession planning,
remuneration and talent
management (including
incentive programs,
superannuation etc),
the legislative and
contractual framework
governing remuneration
and, the legislative
framework workplace
relations.
80
Key Board
Rating Per Skill
5 Expert
skills &
experience
Capital Markets
Experience in equity
raising, debt raising and
investor engagement.
4 Extensive
skills /
experience
3 Sufficient
skills /
experience
2 Somewhat
skilled /
experienced
1 Basic skills /
experience
0 Priority to
seek new skills/
experience
technical skills
in Resources
Advanced technical
understanding of geology,
mining engineering or
processing.
Industry
Knowledge
Understanding of the
international mining
industry and a company's
competitive position in
that industry.
Commodities
exposure
Executive expertise in
commodities, mining or
resources sectors.
Previous Board
Experience
Serving on Boards
of varying size and
composition, in varying
industries and for a
range of organisations.
An awareness of
global practices and
benchmarking and, some
international experience.
Risk Management
& Compliance
Applying broad based risk
management frameworks
in various regulatory or
business environment,
identifying key risks to an
organisation related to
key areas of operations,
monitoring risk and
compliance.
Strategy
Identifying and critically
assessing strategic
opportunities and threats
to the organisation
and, developing and
implementing successful
strategies in context to
an organisation's policies
and business objectives.
Mergers and
Acquisitions
The identification,
assessment and
integration of mergers,
acquisitions, JVs and
similar transactions.
81
hSE
Workplace health and
safety and environmental,
implementing health,
safety and wellbeing
strategies, proactive
identification and
mitigation of health,
safety and environmental
risks.
It & Innovation
Executive knowledge
and experience in
the management of
information technology
including but not limited
to IT strategies and
networks, data storage,
data security, cyber
security.
Major Projects /
Construction
Contract negotiations,
project management,
projects involving
large-scale outlays and
projects with long-term
investment horizons.
International
Growth
Experience in building
businesses outside the
domestic (Australian)
market, including as an
offshoot of a domestically
managed business.
Board Dynamics
Constructively challenge
and contribute to
Board discussions and
communicate effectively
with management and
other Directors. Build
consensus, negotiate
and achieve stakeholder
support for Board decisions.
Issues
Management
Constructively manage
major issues, provide
leadership around
solutions and contribute
to a communications
strategy with
stakeholders.
Ethics & Integrity
Model correct behaviours
as a Director and, contine
to self educate on legal
responsibility, maintain
Board confidentiality,
declare conflicts etc.
Industry
& Political
Experience in industry
groups and government
and political relationships.
NORTHERN STAR RESOURCES LIMITED ANNUAL REPORT 2021NORTHERN STAR RESOURCES LIMITED ANNUAL REPORT 2021 DIRECtORS' REPORt
DIRECtORS' REPORt
Principal activities
In FY21 the principal activities of the Group were:
•
exploration, development, mining and
processing of gold deposits and sale of refined
gold derived from the Kalgoorlie (including
KCGM) and Yandal Operations in Western
Australia and the Pogo Operations in Alaska;
and
•
exploration in relation to gold deposits in
Western Australia, the Northern Territory and
Alaska.
Dividends paid
table 4 Dividends paid in FY21
Interim ordinary dividend for FY20 of 7.5 cents per fully paid Share paid on
16 July 2020 4
FY21
$’000
$55,503
FY20
$’000
n/a
Final ordinary dividend for FY20 of 9.5 cents (FY19: 7.5 cents) per fully paid
Share paid on 30 September 2020
$70,377
$48,670
Special dividend of 10 cents per fully paid Share paid on 30 September
2020
$74,080
-
Interim ordinary dividend for FY21 of 9.5 cents (FY20: 7.5 cents) per fully
paid Share paid on 30 March 2021
$110,513
$55,459
Total
$310,473
$104,129
82
Dividends recommended
Events since the end of FY21
but not yet paid
Since the end of FY21, the Directors have recommended
the payment of a fully-franked final ordinary dividend
of $111 million (9.5 cents per fully paid Share; FY20:
9.5 cents), to be paid on 29 September 2021 out of
retained earnings at 30 June 2021.
Review of operations
Information on the operations and financial position
of the Group and its business strategies and
prospects is set out in the Operations Report section
of this Annual Report.
Significant changes in the state
of affairs
A significant change in the state of affairs of the
Group during FY21 was the Company’s merger with
Saracen Mineral Holdings Limited. The merger was
announced on 6 October 2020 and implementation
occurred on 12 February 2021. For further details
of the merger refer to note 12 of the financial
statements.
Since the end of FY21, the Company sold its
Kundana Assets to Evolution Mining Limited.
The sale was announced on 22 July 2021 and
completion occurred on 18 August 2021. For further
details of the sale of the Kundana assets refer to
note 14 of the financial statements.
On 2 August 2021, Northern Star entered into
a contract with GR Engineering Services Ltd in
relation to the Thunderbox 6Mtpa expansion project
for a contract sum of $101 million.
No other matter or circumstance has arisen since 30
June 2021 that has significantly affected the Group’s
operations, results or state of affairs, or may do so in
future years.
Likely developments and expected
results of operations
There are no likely developments to disclose in the
Group’s operations in future financial years.
4. The FY20 interim dividend payment date was originally 30 March 2020. It was deferred on 26 March 2020 as a cash preservation initiative to ensure
the Company was in the strongest possible financial position to respond to the COVID-19 pandemic and subsequent global financial impact. The interim
dividend was paid subsequent to the FY20 balance date, on 16 July 2020 (i.e. during FY21).
Performance in relation to
environmental regulation
The Group’s exploration, mining and processing
operations are subject to Commonwealth of
Australia, Western Australian, Northern Territory,
State of Alaska and Federal US legislation which
regulates the environmental aspects of the Group’s
activities, including discharges to the air, surface
water and groundwater, and the storage and use of
hazardous materials. The Group is not aware of any
material breach of environmental legislation and
regulations applicable to the Company’s operations
during FY21. The Group continues to comply with
environmental regulations in all material respects.
Insurance of officers and
indemnities
During FY21 the Company has paid a premium to
insure the Directors and Officers of the Company
and its controlled entities. Details of the premium
are subject to a confidentiality clause under
the contract of insurance. The liabilities insured
are costs and expenses that may be incurred in
defending civil or criminal proceedings that may
be brought against the Directors and Officers in
their capacity as officers of entities in the Group,
to the extent permitted by the Corporations Act. In
addition, similar liabilities are insured for Officers
holding the position of nominee Director for the
Company in other entities.
The Group is not aware of any material breach of
environmental legislation and regulations applicable
to the Company’s operations during FY21. The
Group continues to comply with environmental
regulations in all material respects.
Proceedings on behalf of the
Company
No person has applied to the Court under Section
237 of the Corporations Act 2001 for leave to bring
proceedings on behalf of the Company, or to intervene
in any proceedings to which the Company is a party,
for the purpose of taking responsibility on behalf of the
Company for all or part of those proceedings.
Non-audit services
The Company may decide to employ the Auditor on
assignments additional to their statutory audit duties
where the Auditor’s expertise and experience with
the Company and/or Group are important.
Details of the amounts paid or payable to the Auditor
(Deloitte Touche Tohmatsu) for the audit and non-
audit services provided during FY21 are disclosed in
note 21 to the financial statements.
The Directors are satisfied that the provision of
non-audit services is compatible with the general
standard of independence for Auditors imposed
by the Corporations Act 2001. The Directors are
satisfied that the provision of non-audit services
by the Auditor (review of the 2020 Sustainability
Report disclosures) did not compromise the Auditor
independence requirements of the Corporations Act
2001 because none of the services undermine the
general principles relating to Auditor independence
as set out in APES 110 Code of Ethics for
Professional Accountants.
Auditor independence declaration
A copy of the Auditor’s independence declaration
as required under section 307C of the Corporations
Act 2001 is set out on page 128.
Rounding
The Company is of a kind referred to ASIC
Legislative Instrument 2016/191, relating to
the “rounding off” of amounts in the financial
statements. Amounts in the financial statements
have been rounded off in accordance with the
instrument to the nearest hundred thousand dollars,
or in certain cases, the nearest dollar.
Corporate Governance Statement
Northern Star and the Board are committed to
consistently demonstrating the highest standards
of corporate governance. In addition to this Annual
Report, a description of the Company’s current
corporate governance practices is set out in the
Corporate Governance Statement (http://www.
nsrltd.com/about/corporate-governance/).
Northern Star has elected to publish the 2021
Tax Corporate Governance Statement on a
voluntary basis as a part of our commitment to
tax transparency. The report includes information
recommended to be disclosed under the Australian
voluntary Tax Transparency Code (TTC). The report
can be found on the Company website under
Corporate Governance - Rules and Special Reports.
This report is made in accordance with a Resolution
of Directors dated 24 August 2021.
Michael Chaney
Chairman
24 August 2021
83
NORTHERN STAR RESOURCES LIMITED ANNUAL REPORT 2021NORTHERN STAR RESOURCES LIMITED ANNUAL REPORT 2021
Remuneration
Report
REMuNERAtION REPORt
REMuNERAtION REPORt
Letter from the Chair
of the Remuneration
Committee
Dear shareholder,
On behalf of the Board of Directors of Northern
Star Resources Limited, I am pleased to
provide you with the Remuneration Report
for the year ended 30 June 2021.
86
The Remuneration Committee oversees Northern
Star’s remuneration approach on behalf of
the Board. The key tenets of its approach to
remuneration are to ensure that it supports the
Company’s strategy, is undertaken inside a clear
and transparent framework and aligns with the
drivers of long-term shareholder value. However, the
Committee is also cognisant of the need to maintain
flexibility to address specific circumstances that
may arise within the Company or within the industry
in which we operate. The executive remuneration
framework is designed to reward, retain and attract
capable quality executives, maintain a focus on
both near term and long-term goals and support an
effective and socially acceptable culture.
Since the last Annual Report to shareholders
Northern Star has experienced major growth as a
result of the merger with Saracen Mineral Holdings
in February this year and is now one of the top
50 listed companies on the Australian Securities
Exchange. The last year has also been characterised
by a continuation of the challenges associated
with the global COVID-19 pandemic, including the
ongoing restricted labour supply and hard borders
constraining people movements, both in and out of
Western Australia, and in and out of the US, where
our Pogo operations are located.
2020/21 Remuneration Outcomes
Short term incentives awarded to the KMP ranged
from 45.5% to 71% of maximum, as detailed on
pages 100 and 102. Long term incentives awarded in
FY21 are detailed on p104.
Through the merger and coping with the pandemic
we continued to make our employees’ job security
a priority, with zero redundancies and a focus on
acknowledging and aligning our best talent, as we
designed the new organisation and a remuneration
structure appropriate for the enlarged company.
Organisational changes included the retirement
of Executive Chair Bill Beament on 1 July 2021; in
July this year the retirement of Managing Director
Raleigh Finlayson and the appointment of Stuart
Tonkin to that position; and a number of new
appointments to senior roles in the larger company.
In designing a new remuneration structure the
Committee engaged an independent remuneration
consultant to assist with the provision of executive
remuneration benchmarking information. One of
the Board’s major concerns in this review was the
need to retain key executives following the merger,
particularly given the current environment in the
mining industry of high demand for talent.
After considering the benchmarking data, the
Board agreed to maintain the Company’s broad
remuneration framework, with adjustments made
to fixed remuneration from 1 July 2021 but the
majority of KMP remuneration continuing to be at
risk. Details of the remuneration arrangements for
KMP for the 2021/22 financial year are described on
pages 106 to 111 of this report.
Historically the vesting period in the Company’s long
term incentives has been three years. The Board
has resolved to increase the vesting period to four
years, commencing with the 2022 LTI grant, in
order to increase management’s focus on long term
shareholder wealth creation.
Given the past practice of making annual 3-year
awards, one effect of this change is to leave a
vesting gap in FY24 which, if the vesting period
were not being extended, would not occur. In
order to compensate for this, an additional one-off,
3-year LTI award will be made this year, at the level
of 75% of the annual 4-year LTI. For example, for
the 4-year award, 200% of FAR will apply for the
Managing Director and CEO, and for the 3-year
LTI award, 150% of FAR will apply. This one-off
award thus does not represent any ‘doubling up’ of
remuneration; but rather reduces by 50% of FAR the
award that would have been received by the KMP in
year 3 in the absence of this change.
This year’s LTI plan includes for the first time KPIs
related to environmental, social and governance
factors in addition to shareholder return metrics, as
detailed on page 110.
Board and Committee Fees
Board fees were reviewed considering the size
and nature of the Company post-merger, utilising
benchmarking data provided by an independent
remuneration consultant. Details of the fees
applying from 1 July 2021 are provided on page 111
of this report.
The Remuneration Committee and Board believe
that the remuneration framework with the
outlined changes is appropriate and that the FY21
remuneration outcomes are fair and reflect the
performance of the executives and organisation over
the year.
The Board will continue to monitor the remuneration
framework, provide ongoing updates, and continue
direct dialogue with shareholders to ensure the
effective alignment between performance and
reward is maintained.
Response to the “First Strike” at the
2020 Annual General Meeting
We believe we have addressed the concerns raised
by investors in relation to which a “first strike” was
received by the Company at the 2020 AGM, with a
25.12% vote against the FY20 Remuneration Report.
The concerns raised by investors were:
•
•
150,000 time tested restricted shares were
issued to the Chief Operating Officer during
FY20. These restricted shares vested on 1 July
2021; the employee remains employed by the
Company. In FY21, no time tested restricted
shares were granted to KMP, and none are
proposed to be granted to KMP in FY22.
The 300% of FAR which former Executive
Chair, Bill Beament, had as a 3-year maximum
LTI. The incoming MD & CEO, Stuart Tonkin,
will have an ongoing maximum four-year LTI of
200% of FAR.
Native flora at Thunderbox,
Yandal operations.
•
•
•
The lack of disclosure about the treatment
of Bill Beament’s FY20 LTI and FY21 LTI
Performance Rights, given that he was to
step down as an executive on 30 June 2021.
No decision had been made at the time of
the 2020 Annual Report or the 2020 AGM.
The decision was recommended by the
post-merger re-constituted Remuneration
Committee in February 2021, approved by the
new Board and is disclosed on page 105 in this
Remuneration Report.
In addition, this Report discloses that no
payments were made to Bill Beament upon his
departure from the Company on 1 July 2021
other than payment of the 4-month balance
of his contractual notice period, and statutory
accrued entitlements.
The Remuneration Committee engaged
remuneration consultants and ensured rigour
was applied in benchmarking deliberations,
with the result that the Board is confident
the FY22 remuneration structure is entirely
appropriate for the Company, in order to
reward and retain Northern Star’s high
performing team.
On behalf of the Board, I invite you to review the full
report and thank you for your ongoing support of
Northern Star.
87
Nick Cernotta
Remuneration
Committee Chair
24 August 2021
NORTHERN STAR RESOURCES LIMITED ANNUAL REPORT 2021NORTHERN STAR RESOURCES LIMITED ANNUAL REPORT 2021 REMuNERAtION REPORt
REMuNERAtION REPORt
transparency in reporting Key
Management Personnel Remuneration
Easy to access information and transparency in remuneration reporting is important to Northern Star and
its shareholders. This Remuneration Report includes the following voluntary and statutory disclosures:
1. Details of the Key Management Personnel
2. Remuneration Governance
3. Financial Performance over the Past 5 Years
4. Executive KMP Remuneration Policy and Link to Performance
5. FY21 Executive KMP Remuneration Mix
6. Fixed annual remuneration (FAR)
7. Short Term Incentives – Performance Against FY21 STI Targets
8. Long Term Incentive
9. Vesting of Long Term Incentives during FY21
10. Vesting of FY20 Restricted Shares held by Chief Operating Officer under
88
Retention Share Plan
11. Treatment of unvested FY20 and FY21 LTI Performance Rights held by Bill Beament
(Executive Chair, employment ended 1 July 2021)
12. FY22 Executive KMP remuneration changes
13. FY22 Executive KMP remuneration mix
14. FY22 Short Term Incentive
15. FY22 Long Term Incentive
16. FY21 and FY22 Non-Executive Directors’ Remuneration
17. Allocation methodology for grant of FY21 STI & LTI Performance Rights
18. Allocation methodology for grant of FY21 NED Share Rights
19. Securities held by the KMP during FY21
20. Contractual Arrangements with Executive KMP
21. Transactions with KMP and previous disclosure of “Related party”
transactions with Bill Beament
22. Summary of Company’s FY20 Share Plan
23. Summary of Company's FY20 NED Share Plan
24. Auditor's Independence Declaration
89
90
91
94
95
97
97
103
105
105
105
106
106
107
109
111
118
119
120
122
123
124
126
128
1. Details of the Key Management Personnel
The following Executives and Non-Executive
Directors (NEDs) were the Key Management
Personnel (KMP) for FY21. Former Executives and
NEDs who were KMP for part of FY20 or FY21
are also covered by this Report, where required.
Movement since 30 June 2021 to the date of this
Report is also included.
table 1 Key Management Personnel during FY21 and movement after 30 June 2021
KMP
Role
Executives
Appointment
Date
Ceased
Date
Bill Beament
Executive Chair
20 August 2007
1 July 2021
Raleigh
Finlayson 1
Managing Director/Executive Director
12 February 2021
Stuart Tonkin 2
Chief Executive Officer/Managing Director 29 October 2016
Date of change of role -
22 July 2021
Date of commencement as
MD & CEO – 22 July 2021
Morgan Ball
Chief Financial Officer
12 February 2021
Luke Creagh
Chief Operating Officer – Yandal and Pogo
1 November 2018
Simon Jessop
Chief Operating Officer – Kalgoorlie
operations
12 February 2021
Hilary
Macdonald
Ryan Gurner 3
General Counsel & Company Secretary
23 February 2018
Chief Financial Officer/Executive General
Manager Finance
16 October 2018
-
-
-
-
Date of cessation as CFO
and commencement as
EGM Finance - 12 February
2021
89
Non-Executive Directors
Michael Chaney Chairman
1 July 2021
-
Anthony Kiernan Lead Independent Director
12 February 2021
Expected date of cessation
- 18 November 2021
John Fitzgerald
Lead Independent Director and Non-
Executive Director
30 November 2012 Date of cessation as Lead
Independent Director -
12 February 2021
Peter O’Connor
Non-Executive Director
21 May 2012
12 February 2021
Shirley In’t Veld
Non-Executive Director
1 September 2016
30 June 2021
Mary Hackett
Non-Executive Director
Nick Cernotta
Non-Executive Director
John Richards
Non-Executive Director
Sally Langer
Non-Executive Director
1 July 2019
1 July 2019
12 February 2021
12 February 2021
Sharon
Warburton
Non-Executive Director
1 September 2021
-
-
-
-
-
1. Mr Finlayson moved to the position of Executive Director for a period of
2 months commencing 22 July 2021, having announced his intention to
resign as a Director with effect on 30 September 2021
2. Mr Tonkin was appointed Managing Director on 22 July 2021
3. Mr Gurner has stepped down from the role of CFO effective the date of
the merger 12 February 2021 but has remained with the Company.
NORTHERN STAR RESOURCES LIMITED ANNUAL REPORT 2021NORTHERN STAR RESOURCES LIMITED ANNUAL REPORT 2021
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2. Remuneration Governance
Until the merger, the Remuneration Committee
comprised three independent non-executive
Directors, Nick Cernotta (Chair), John Fitzgerald
(Lead Independent Director) and Peter O’Connor.
Following the merger, the Remuneration Committee
comprised four independent non-executive
Directors, Nick Cernotta (Chair), Anthony Kiernan
(Lead Independent Director), John Fitzgerald and
Sally Langer. The Managing Director & CEO and
other Directors are invited to attend all, or part of
the Committee meetings as required but have no
vote on matters before the Committee.
The Committee meets several times a year to
review and make recommendations to the Board
in accordance with the Remuneration Committee
Charter to ensure that KMP remuneration remains
aligned to business needs and performance. A copy
of the Charter is available under the Corporate
Governance section of the Company’s website
available at www.nsrltd.com.
The role of the Remuneration Committee is to
review and make recommendations to the Board in
relation to KMP and other executives in respect of:
•
•
•
Remuneration and incentive policy including
structures, practices, and quantum;
Determining the eligibility, award and vesting
of Short Term Incentives (STI) and Long Term
Incentives (LTI)
Non-Executive Director individual
remuneration, and the aggregate pool for
approval by shareholders (as required);
•
Disclosure of remuneration in the Company’s
public materials including ASX filings and the
Annual Report
•
Superannuation arrangements; and
• Overseeing remuneration by gender and other
diversity measures.
The Board and the Remuneration Committee
use remuneration consultants’ advice and
recommendations from time to time. The
Remuneration Committee observes the following
protocols:
•
•
•
Remuneration consultants are engaged by
and report directly to the Remuneration
Committee;
The Committee must, in deciding whether
to approve the engagement, have regard to
any potential conflicts of interest including
factors that may influence independence
such as previous and future work performed
by the adviser. and any relationships that
exist between any executive KMP and the
consultant, and
Communication between the remuneration
consultants and Executive KMP is restricted
to minimise the risk of undue influence on the
remuneration consultant.
The Board makes its decisions after it considers
the recommendations from the Remuneration
Committee and advice from remuneration
consultants.
No remuneration recommendations (within the
meaning of the Corporations Act 2001) were sought
or provided during FY21.
90
The Board makes its decisions after
it considers the recommendations from
the Remuneration Committee and advice
from remuneration consultants.
XXXXXX XXXXXX XXXX XXXXXXXXXXXXXXXXXXXXX XXXXXXXXXXXX XX XXX XX XXX XX X
3. Financial Performance Over the Past 5 Years
Northern Star has a strong history of improving
its key financial metrics on a year-on-year basis
and this trend continued in FY21. From a financial
perspective, the Company’s key short term incentive
performance measures in FY21 were:
•
•
•
Production growth (and associated revenue
generation);
Cost management; and
Free cashflow.
The Company’s strong operational and financial
performance during FY21 resulted in:
•
•
•
The achievement of production guidance and
record revenues supported by a positive A$
gold price;
The achievement of cost guidance against a
backdrop of COVID-19 related management
and inflationary pressures; and
Free cashflow that support a strong post-
merger balance sheet position.
The charts below illustrate some of the Company’s FY21 key financial achievements:
Figure 1
Underlying NPAT 4
400
350
300
250
200
150
100
50
0
2
7
3
1
9
2
5
1
2
2
1
2
9
7
1
Figure 3
Revenue ($m)
7
1
Y
F
8
1
Y
F
9
1
Y
F
0
2
Y
F
1
2
Y
F
3,000
3,000
2,500
2,500
2,000
2,000
1,500
1,500
1,000
1,000
500
500
0
0
1
1
6
6
7
7
,
,
2
2
2
2
7
7
9
9
,
,
1
1
1
1
0
0
4
4
,
,
1
1
9
9
1
1
Y
Y
F
F
0
0
2
2
Y
Y
F
F
1
1
2
2
Y
Y
F
F
9
9
6
6
8
8
7
7
1
1
Y
Y
F
F
4
4
6
6
9
9
8
8
1
1
Y
Y
F
F
Figure 4
Underlying EBITDA ($m)4
1,400
1,200
1,000
800
600
400
200
0
9
5
1
,
1
1
9
7
0
2
Y
F
1
2
Y
F
1
6
4
7
1
Y
F
3
4
4
8
1
Y
F
0
8
4
9
1
Y
F
91
Figure 2
Cashflow from
Operations ($m)
1,200
1,000
800
600
400
200
0
7
7
0
,
1
0
1
7
0
2
Y
F
1
2
Y
F
9
5
3
7
1
Y
F
3
5
3
8
1
Y
F
9
7
3
9
1
Y
F
Figure 5
Gold Sold (Moz) 5
1.8
1.6
1.4
1.2
1.0
0.8
0.6
0.4
0.2
0
9
2
7
,
5
9
5
,
1
1
2
Y
F
,
0
8
5
0
4
8
9
1
Y
F
,
8
8
3
0
0
9
0
2
Y
F
,
5
1
5
6
2
5
7
1
Y
F
0
1
1
,
0
7
5
8
1
Y
F
4. See Operations Report / Financial Review on page 24 for details of reconciliation to Underlying NPAT and Underlying EBITDA.
5. Gold Sold on an annualised basis.
NORTHERN STAR RESOURCES LIMITED ANNUAL REPORT 2021NORTHERN STAR RESOURCES LIMITED ANNUAL REPORT 2021
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Figure 6 Dividends (cents per Share) approved
Figure 7 NST Share price performance over 5 years to August 2021
e
r
a
h
s
/
s
t
n
e
c
40
35
30
25
20
15
10
5
0
2.5
FY12
2.5
1
FY13
2.5
1
FY14
10
9.5
7.5
9.5
9.5
3
6
3
7.5
6
5
4.5
3
2
4
3
18
16
14
12
10
8
6
4
2
0
FY15
FY16
FY17
FY18
FY19
FY20
FY21
6
1
/
8
/
1
6
1
/
0
1
/
1
6
1
/
2
1
/
1
7
1
/
2
/
1
7
1
/
4
/
1
7
1
/
6
/
1
7
1
/
8
/
1
7
1
/
0
1
/
1
7
1
/
2
1
/
1
8
1
/
2
/
1
8
1
/
4
/
1
8
1
/
6
/
1
8
1
/
8
/
1
8
1
/
0
1
/
1
8
1
/
2
1
/
1
9
1
/
2
/
1
9
1
/
4
/
1
9
1
/
6
/
1
9
1
/
8
/
1
9
1
/
0
1
/
1
9
1
/
2
1
/
1
0
2
/
2
/
1
0
2
/
4
/
1
0
2
/
6
/
1
0
2
/
8
/
1
0
2
/
0
1
/
1
0
2
/
2
1
/
1
1
2
/
2
/
1
1
2
/
4
/
1
1
2
/
6
/
1
1
2
/
8
/
1
Interim
Final
Special
NST 5 Years
92
93
Ben Goldbloom, Troy Irvin
and Alan Thom from the
Business Development
and Investor Relations
teams, Corporate Office,
Subiaco, Western
Australia.
NORTHERN STAR RESOURCES LIMITED ANNUAL REPORT 2021 REMuNERAtION REPORt
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4. KMP Remuneration Policy and Link to Performance
5. FY21 Executive KMP Remuneration Mix
The table below outlines the remuneration policy framework which applied in FY21.
Key
FAR
STI
LTI
Our remuneration policy is designed to support
our Mission. Our objective is clear: to develop a
responsible Company that is attractive to global
investors. Our KMP remuneration policy and
practices underpin our business objectives, which
include:
Results
Deliver
on our
promises
Returns
target superior
financial
performance
Responsibility
Positive legacy
from business
activity
• Reliable delivery of
production and cost
guidance
• Capital discipline balancing
re-investment and returns to
shareholders
• Sustainable employee,
Environmental, Social and
Governance performance
• Active portfolio management,
• Sustainable discovery and
lowering costs
mine life extension
table 2 Our Remuneration Policy
Remuneration policy
objective
Remuneration practices aligned
with policy objective
94
Retain an experienced,
cohesive, proven, high
performance, multi-disciplinary
team to deliver the Company’s
strategic objectives
• Provide remuneration that is internally fair and benchmarked against
appropriate peer group on a regular basis.
• Ensure remuneration is competitive with the gold industry labour market and
other competition for our people.
• Provide total remuneration opportunities to retain proven and experienced
KMP who are global company poaching targets.
Align KMP interests with the
interests of shareholders
• A significant proportion of remuneration is at risk, performance-based and
delivered in Shares, aligning Executive KMP reward with increased value for
shareholders.
• Performance metrics measured against stretch targets that reward for longer
term value, consistent with our business strategy.
• Minimum holding condition policy applies to KMP requiring a minimum level
of Share and vested Performance Rights ownership as follows:
- Managing Director & CEO:
- COO, CFO, GC & Co Sec:
- Non-Executive Directors:
100% of FAR6
50% of FAR
100% NED base fee
Focus on safety
• Safety performance metrics (employee and contractors) building in year on
year improvements, to measure performance over different time horizons for
sound risk management and to ensure outcomes focus on the longer term.
Focus on sustained costs and
production performance
• STI including:
- Challenging annual production targets;
- Deliver on competitive production costs.
Focus on our people and create
a desirable Company culture
• Provide targeted strategic incentives from the top down, to promote
improvements in organisational culture, to attract and retain a diverse and
inclusive workforce in line with the STARR Core Values7.
• Focus and facilitate the development and retention of our people to ensure a
sustainable pipeline of diverse talent within the business.
6.
7.
FAR means fixed annual remuneration comprising base salary plus superannuation capped at $25,000 per annum
Our STARR Core Values are: Safety, Teamwork, Accountability, Respect, Results.
Executive remuneration has a fixed component
(base salary plus superannuation capped at
$25,000 per annum) and a component that varies
with performance (STI and LTI). The remuneration
mix is weighted towards the variable component
and is awarded in cash and Performance Rights for
STI (with right to elect to take 100% in Performance
Rights), to reward for achievement of strategic
objectives aligned with shareholders’ interests.
Figure 8 FY21 Remuneration Mix for Northern Star Executive KMP (pre-merger)
Bill Beament
19%
23%
Stuart Tonkin
24%
29%
58%
48%
Luke Creagh
31%
Ryan Gurner
Hilary Macdonald
34%
38%
38%
31%
34%
Maximum opportunity - FY21 Northern Star STI: BB ST & LC STI = 120% of FAR, RG & HM STI = 90% of FAR
FY21 Northern Star LTI: BB LTI = 300% of FAR, ST LTI = 200% of FAR, LC & RG LTI = 100% of FAR, HM LTI = 75% of FAR
Figure 9 FY21 Remuneration Mix for Saracen Executive KMP (pre-merger)
Raleigh Finlayson
Morgan Ball
Simon Jessop
33%
36%
36%
33%
27%
27%
Key
FAR
STI
LTI
31%
34%
28%
33%
36%
36%
95
Maximum opportunity - RF FY21 Saracen STI & LTI = 100% of FAR. MB & SJ FY21 Saracen STI = 75% of FAR, LTI = 100% of FAR
Figure 10 FY21 Remuneration Mix for ex-Saracen Northern Star Executive KMP from 12 Feb 2021
Raleigh Finlayson
Morgan Ball
Simon Jessop
38%
37%
38%
23%
26%
25%
38%
37%
38%
Key
FAR
STI
LTI
Maximum opportunity - RF FY21 Northern Star STI = 100%, LTI = 200% of FAR. MB & SJ FY21 Northern Star STI = 75% of FAR, LTI = 100% of FAR
The following sections 6-8 of this Report provide more information about:
•
•
FAR (and the reasons for the changes to FAR);
STI and LTI KPIs (and the reasons for changes made to the KPIs between FY20, FY21 and FY22), and
• measurement of performance against the FY21 STI (for both Saracen and NST pre-merger).
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6. Fixed annual remuneration (FAR)
•
Cash salary with superannuation capped at
$25,000 per annum
•
Benchmarked against ASX100 and mining
industry peers for comparable roles and
responsibilities
•
Periodic remuneration reviews conducted as
appropriate
7. Short term Incentives – Performance Against FY21 StI targets
Under the agreed terms of the merger, it was
decided that the respective short term incentive
schemes for pre-merger Northern Star KMP and
pre-merger Saracen KMP would continue to
operate for the balance of FY21 after the merger
implementation date of 12 February 2021.
The tables below set out performance against
the KPIs applicable to both the Northern Star and
Saracen FY21 STI granted to the Executive KMP.
The total FY21 STI achievement for the Executive
KMP (including Saracen pre-merger KMP) ranged
from 45.5% to 71%8.
(a) FY21 StI for Northern Star pre-merger Executive KMP
•
STI opportunity is calculated as a percentage
of FAR
• Maximum STI opportunity was 120% of FAR
for the Executive Chair, and from 90% to 120%
of FAR for the other Executive KMP
-
efficient use of capital and operational
expenditure is key to maintaining control
over costs; and
Strategic measures – These are nominated
by the Board for Executive KMP according
to role performed, and assessed on an
individual basis with a view to targeting
specific areas for improvement or focus in
the operations, the achievement of which
are above and beyond business as usual
requirements of the role
97
96
Darren Pike, Light
Vehicle Maintenance
Fitter, Kanowna Belle,
Kalgoorlie operations.
•
•
•
•
80% of the STI is weighted towards
companywide performance metrics with 20%
weighted toward individual strategic measures
STI is measured over a one year performance
period (1 July 2020 to 30 June 2021)
The STI is settled 50% in cash and 50% in
Performance Rights. KMP can elect at the
time of offer to have the STI settled 100% in
Performance Rights.
The following Company wide performance
metrics, which are aligned with our Mission,
were chosen:
-
Focus on Safety – Total Recordable
Injury Frequency Rate (TRFIR) – this is
a measure of how many restricted work
injuries (RWIs)9 and lost time injuries
(LTIs)10 occur per million hours worked by
our employees and contractors. The safety
of our employees is key to our success
and in sustaining long term operational
performance
-
Production Performance – Our production
is directly related to the financial returns
we generate for our shareholders
-
Financial Management – disciplined and
A summary of the FY20 Share Plan under which
the FY21 STI Performance Rights were granted is
provided at page 124.
Table 3 sets out the Companywide performance
metrics (80% of the FY21 STI), relative weightings
and performance outcome for the FY21 Northern
Star pre-merger STI. The outcome of the Northern
Star pre-merger Executive KMP against the FY21 STI
Individual performance metrics (20% of the FY21
STI) are provided in Table 4.
The total FY21 STI achievement for the pre-merger
Northern Star Executive KMP ranged from 58.5%
to 71%. The STI comprises 50% cash and 50%
Performance Rights, with the ability to elect at offer
to take the cash component in Performance Rights
in lieu of cash, as shown in Table 5. Total Northern
Star pre-merger FY21 STI Company and Individual
KPI final outcome, percentage and number of rights
and cash is provided to pre-merger Executive KMP
is shown in Table 5.
8. For all Saracen KMP, the overall quantum of STI available was reduced by 20% in light of the tragic fatality which occurred in July 2020 at Saracen’s
Carosue Dam operations.
9. RWI is a work injury that results in the injured person being unable to fully perform their ordinary occupation any time after the day or shift on which the
injury occurred regardless of whether they are rostered to work, or where alternative/light duties are performed or hours restricted.
10. LTI is a work injury that results in an absence from work for at least one full day or shift any time after the day or shift on which the injury occurred.
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table 3 FY21 STI Company KPI performance measures and outcomes (80% of STI)
Company
KPIs
Focus
on safety
(20%)
Location Weighting Measure
Metric
Outcome
% STI
vested
All
20%
Total
Recordable
Injury
Frequency
Rate
TRIFR ≥6.4 = 0%
Threshold TRIFR <6.4 = 50%
Target TRIFR <4.3 = 100%
Stretch TRIFR <3.3 = 125%
TRIFR 4.2
21%
Production
Performance
(40%)
Australia
30%
Pogo
10%
Gold
Production
within
stated
guidance
Australia
15%
Financial
Management
(20%)
AISC within
stated
guidance
98
Pogo
5%
80%
Threshold 760koz = 0%
Target 840koz = 100%
Stretch 860koz = 125%
779koz
gold sold
8%
Threshold 180koz = 0%
Target 200koz = 100%
Stretch 230koz = 125%
204koz
gold sold
11%
Threshold A$1,540/oz = 50%
Target A$1,490/oz = 100%
Stretch A$1,465/oz = 125%
A$1,537
per ounce
8%
Threshold US$1,400/oz = 50%
Target US$1,300/oz = 100%
Stretch US$1,250/oz = 125%
US$1,357
per ounce
3%
51%
Mt Charlotte headframe,
KCGM, Kalgoorlie
operations.
table 4 FY21 STI pre-merger NST Individual KPI performance measures and outcomes
(20% of STI)
Individual
KPIs
Measure
Weighting
STI
Outcome
% STI
vested
Bill Beament
(20%)
Demonstrate improved retention of talent
initiatives
20%
7.5%
7.5%
Stuart Tonkin
(20%)
Luke Creagh
(20%)
Focus and facilitate a sustainable pipeline of
talent within the business
Culture Survey > 80% staff participation
Culture Survey - Improved year on year
average score for Engagement & STARR
Core Value Elements
Pogo - achieve over 65koz in Q3 or Q4 at
under US$1,200/oz)
Develop strategy & plan for Yandal to
produce over 400koz by FY23
Culture Survey - Improved year on year
average score for Engagement & STARR
Core Value Elements
Target annualised operational and
corporate cost reductions of 2-3% of total
spend ($20-$30/oz):
10%
5%
5%
10%
5%
5%
10%
0%
5%
0%
5%
5%
15%
10%
99
Ryan Gurner
(20%)
<$20M cost reduction = 0%
$20M cost reduction = 50%
$30M cost reduction = 100% (pro-rata
>$20M-$30M)
20%
15%
15%
Develop program of Board education
by subject matter experts on risk and
opportunities flowing from Nasdaq Board
evaluation
10%
10%
Develop and implement best practice legal
document management system
10%
10%
Hilary
Macdonald
(20%)
TOTAL
20%
7.5% to 20%
TOTAL STI
(out of 100%) Company + Individual STI outcome
58.5% to 71%
NORTHERN STAR RESOURCES LIMITED ANNUAL REPORT 2021NORTHERN STAR RESOURCES LIMITED ANNUAL REPORT 2021
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table 5 Northern Star pre-merger FY21 STI final outcome, percentage and number
of Performance Rights and cash (where no election was made to take STI in 100%
Performance Rights)
Name
Performance
Rights
Awarded
Company
KPI %
achieved
Individual
KPI %
achieved
Total
STI %
achieved12
(STRETCH 120%)
(MAX 80%)
(MAX 20%)
Performance
Rights
vested
Rights
Cash
STI
paid
Performance
Rights
lapsed11
%
Performance
Rights
lapsed11
Bill Beament
123,951
Stuart Tonkin
106,244
Luke Creagh
26,561 (cash
50% election)
Ryan Gurner
33,201
Hilary
Macdonald
15,770 (cash
50% election)
51%
51%
51%
51%
51%
15%
10%
15%
7.5%
58.5%
60,426
66%
58,434
nil
nil
63,525
51.3%
47,810
45.0%
61%
13,501
$183,000
13,060
49.2%
66%
18,260
nil
14,941
45.0%
20%
71%
9,330
$126,469
6,440
40.8%
100
(b) FY21 StI for Saracen pre-merger Executive KMP
Under the agreed term of the merger, it was decided
that the respective STI schemes for pre-merger
Northern Star Executive KMP and pre-merger
Saracen Executive KMP would continue to operate
for the balance of FY21.
Table 6 shows the pre-merger Saracen FY21 STI
performance metrics, weightings, and outcomes for
the pre-merger Saracen Executive KMP.
StI Saracen pre-merger KMP
Details of the STI for the pre-merger Saracen KMP
are as follows:
•
STI opportunity is calculated as a percentage
of FAR
• Maximum STI opportunity is 100% of FAR for
the MD and 75% for other KMP
•
For the MD, 50% of the STI is weighted
towards companywide performance metrics
and 50% weighted towards individual strategic
measures.
•
For the other KMP, 75% of the STI is weighted
towards companywide performance metrics
and 25% weighted towards individual strategic
measures.
•
Individual strategic measures were:
-
Raleigh Finlayson: Delivering Strategy 25%
and Board Measures 25%
-
Simon Jessop: Board Measures 25%
- Morgan Ball: Board Measures 25%
•
•
STI is measured over a one year performance
period (1 July 2020 to 30 June 2021)
The STI is settled 100% in cash, calculated
using the pre-merger FY21 FAR
The total FY21 STI achievement for the pre-Merger
Saracen Executive KMP ranged from 45.5% to
65.5%.
Table 6 sets out the companywide performance
measures and outcomes, and Table 7 the results of
individual performance measures.
11. Based on Performance Rights awarded at maximum opportunity, shown in column 1.
12. This column shows the percentage of STI achieved with reference to the target, not stretch, number of Performance Rights. For example, Stuart Tonkin
was originally granted the full stretch award of 106,244 Performance Rights. The number of Performance Rights to be granted without the stretch
component would have been 88,536 Performance Rights. He achieved 66% STI KPI satisfaction, and therefore he received 58,434 vested Performance
Rights (88,536 x 66% = 58,434). The number of Performance Rights shown as lapsed in the table above for Stuart Tonkin is therefore 106,244 – 58,434 =
47,810 lapsed Performance Rights.
% STI
vested
0%
12.5%
3%
15%
0.5%
table 6 Pre-merger Saracen FY21 STI Company KPI performance measures and outcomes
(50% of RF STI, 75% of MB & SJ STI)
Company
KPIs
Focus
on safety
(40%)
Weighting Measure
Metric
Outcome
20%
Total
Recordable
Injury
Frequency
Rate
Threshold TRIFR 12 maintained = 0%
Target 10% reduction = 50%
Stretch 20% reduction = 100%
Nil award due
to Carosue Dam
operations Fatality in
July 2020 pre-merger
20%
Principal
Hazard
Management
Threshold Revise Principal Hazards
& implement across business = 0%
Target Principal Hazard thinking well
engrained in shop floor = 50%
Stretch Develop Task observations
with Principal Hazard focus against
core production roles = 100%
Threshold: zero penalties for ESG
compliance = 0%
7.5%
ESG
incidents
Target: Zero significant ESG
breaches = 50%
Stretch: Proactive improvement in
ESG status = 100%
ESG
(10%)
Principal Hazards
implemented;
embedded into day-
to-day site thinking.
Critical Control Gap
work completed and
incorporated into the
Change Management
Process
Minor breaches but no
penalties or significant
breaches.
Improved focus and
improvement re ESG
matters.
Engagement with stakeholders
and community. Improvement in
Sustainability Score
ISS sustainability score
improved at December
2020 prior to merger
2.5%
101
Engagement
and
Sustainability
Score
AISC within
stated
guidance
2.5%
15%
15%
Financial
Management
(15%)
Production
Performance
(15%)
Cash build
(10%)
10%
Threshold: Achieve guidance = 0%
Target: Exceed guidance by 1.5% =
50%
Stretch: Exceed guidance by 3% =
100%
Exceeded guidance by
4.8%
(A$1,276 per ounce)
Gold
Production
within stated
guidance
Threshold: Achieve guidance (0%)
Target: Exceed guidance by 2.5%
(50%)
Stretch Exceed guidance by 4%
(100%)
Exceeded guidance by
0.3%
(627koz gold sold)
Budgeted
free cash
flow before
debt
Threshold: Achieve budgeted free
cashflow before debt = 0%
Target: Exceed budgeted free cash
flow before debt by 100% = 50%
Stretch: Exceed budgeted free cash
flow before debt by 200% = 100%
Exceeded budgeted
cash flow before debt
by 354%
10%
Future
proofing
(10%)
10%
Operational
and strategic
planning
Threshold: Deliver operational plan
= 0%
Target: Deliver on strategic plan
= 5%; Stretch: Implement Future
Proofing Plan = 10%
TOTAL
100%
Operational
Plan achieved.
Strategic Plan and
implementation of
future proofing on
track at merger date:
• Additional BCM’s
moved at CDO & TBO
• CDO Mill expansion
7.5%
51%
NORTHERN STAR RESOURCES LIMITED ANNUAL REPORT 2021NORTHERN STAR RESOURCES LIMITED ANNUAL REPORT 2021 REMuNERAtION REPORt
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table 7 Pre-merger Saracen FY21 STI Individual KPI performance measures and outcomes
8. Long term Incentives
Individual KPIs Measure
SAR MD
Other SAR KMP
Weighting
Outcome*
Weighting
Outcome*
“Strategy”
(RF -50% of STI)
Delivering strategy
50%
40%
-
-
“Board
measures”
(RF -of STI
SJ -25% of STI
MB- 25% of STI)
• Excellent operating
parameters - AISC,
production delivery
• Vastly improved KCGM
performance on open pit
and processing
• Delivery of the merger on
good terms and excellent
due diligence
• Exceptional corporate
merger work including
debt delivery and
management of
Saracen’s external legal
and accounting teams.
50%
40%
100%
80%
TOTAL
100%
80%
100%
80%
102
* The post-merger Board awarded full achievement
of these short term incentive performance measures,
and then exercised downward discretion as a result
of the fatality at the Carosue Dam operations in July
2020, reducing the individual STI by 20%.
The Saracen FY21 STI cash payments were
calculated on the basis of pre-merger FAR.
Saracen FY21 STI KMP Company and Individual STI
final outcome, percentage and number of rights and
cash is shown in Table 8.
table 8 Pre-merger Saracen FY21 STI final outcome, percentage and cash
Name
Raleigh
Finlayson
Company KPI
% STI
Individual KPI
% of FAR
% achieved
% STI
% achieved
% of FAR
Total STI %
as % of FAR
Cash
Paid
% of STI
forfeited
51%
50%
25.5%
80%
50%
40%
65.5%
$556,750
34%
Simon Jessop 51%
50%
25.5%
80%
25%
20%
45.5%
$250,250
40%
Morgan Ball
51%
50%
25.5%
80%
25%
20%
45.5%
$238,875
40%
The purpose of the Northern Star LTI is to focus the
senior leadership team on drivers of shareholder
value over a period of three years (this is changing
to four years, for the FY22 annual grant onwards).
Specific performance metrics have been selected
that will reward both KMP and shareholders for
strong and sustained long term performance.
For the FY20 LTI grant the maximum opportunity
was 300% of FAR for the Executive Chair, and
between 75% and 100% of FAR for the other KMP.
Table 9 below sets out the performance metrics
applicable to the FY20 LTI granted to the Executive
KMP to be measured following the end of the 3 year
performance period, on 30 June 2022.
table 9 Summary of FY20 LTI KPIs (performance period 1 July 2019 to 30 June 2022)
KPIs
Weighting
Measure
Metric
Rationale for this KPI
Financial –
Return on
Invested
Capital
(ROIC)
(25%)
25%
ROIC is calculated
as 3 years’ NPAT
divided by the
average invested
capital for the 3 year
performance period
Threshold <15% = 0%
Target 15% = 50%
Stretch ≥20% = 100%
Pro rata vesting between
10% and 20% ROIC
Financial
– Relative
Total
shareholder
Return (TSR)
(50%)
50%
Relative TSR
measured against
the VanEck Vectors
Gold Miners ETF
(GDX)13
Threshold 18% than GDX = 100%
Pro rata vesting for exceeding target
Ore Reserves are
maintained post-
depletion over the three
year performance period
Ore Reserves grown by
10% per Share over the
three year performance
period
Satisfied by the end of year 3 = 100%
Satisfied by the end of year 3 = 100%
TOTAL
100%
The quantum of FY21 LTI granted to ex-Saracen
KMP on joining Northern Star on 12 February 2021,
Raleigh Finlayson, Morgan Ball and Simon Jessop,
was reduced to 4/12 of the annual quantum on the
basis of their only being a Northern Star KMP from
12 February 2021 to 30 June 2021 for FY21.
14. ROIC is calculated as:
Average annual net profit after tax (NPAT) for the 3 year period
(i.e. sum of NPAT divided by 3)
Average capital employed over the vesting period
(i.e. opening and closing capital employed divided by 2)
where: capital employed is defined as equity plus debt
15. If the Company’s TSR performance is negative, but exceeds GDX, only
50% of this metric vests
Kanowna Belle processing
plant, Kalgoorlie operations.
9. Vesting of Long term Incentives during FY21
No Long Term Incentive Performance Rights held
by KMP vested in FY21. This is because in FY17
the KMP received a grant of Long Term Incentive
Performance Rights with a three year performance
period, which vested in October 2019, and there
were no grants of Long Term Incentive Performance
Rights in FY18 or in FY19 to KMP.
10. Vesting of FY20 Restricted Shares held by Chief Operating Officer under
Retention Share Plan
The Restricted Shares granted to Chief Operating
Officer Luke Creagh during FY20, as a retention tool
in the face of a competitive offer of employment
elsewhere, vested on 1 July 2021 as a result of
satisfaction of the service condition to remain
employed with the Company on 1 July 2021. Mr
Creagh continues to remain employed by the
Company.
11. treatment of unvested FY20 and FY21 LtI Performance Rights held by Bill
Beament (Executive Chair, employment ended 1 July 2021)
Bill Beament’s employment ended on 1 July 2021
as a result of Mr Beament’s decision to pursue
other interests. The Board used its discretion to
allow Mr Beament to keep the 388,367 unvested
FY20 LTI Performance Rights granted to him in
November 2019, given his critical contribution to the
Company strategy up to 1 July, 2021 and the impact
his leadership will have had on the Company’s
performance up to the measurement date, 30 June
2022. The 388,367 unvested FY20 LTI Performance
Rights retained by Mr Beament will be measured for
performance as at 30 June 2022.
The FY21 LTI Performance Rights granted to Mr
Beament in November 2020, which are due to be
measured at the end of the three year performance
period on 30 June 2023, were reduced by two
thirds, to reflect that Mr Beament will have
performed an executive role with the Company for
only one out of the three year performance period.
The remainder of the Performance Rights granted
in November 2020 remain subject to meeting the
original performance measures and will be assessed
as at 30 June 2023. Accordingly, the 309,878 FY21
Performance Rights held by Mr Beament as at 30
June 2021 have subsequently been reduced by
206,585 Performance Rights to 103,293.
When Mr Beament left the Company’s employment
on 1 July 2021, he received four months’ pay
being the balance of his contractual notice period,
contractual reimbursements of expenses incurred
by Mr Beament for which the Company was
responsible, and accrued statutory entitlements. No
other payments were made to Mr Beament upon his
departure.
105
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12. FY22 Executive KMP remuneration changes
Figure 11 FY22 Remuneration Mix for Northern Star Executive KMP
During FY21, the Remuneration Committee
conducted a benchmarking review to ensure total
remuneration packages for the Executive KMP (and
other leaders) remain market competitive, to reward
for delivery of strategic objectives and to assist with
retention of a high-performing management team,
for the benefit of shareholders. In addition, the
Committee wished to ensure the additional KMP
joining the Northern Star team from Saracen were
appropriately and equitably positioned.
Industry benchmarking analysis was undertaken
by remuneration consultants against peer groups
included the GDX Index companies, the ASX100
companies and mining industry peers.
The Remuneration Committee’s changes to
Executive KMP fixed and variable remuneration
following the review are set out in Table 11 below. A
high proportion of the overall remuneration is at risk,
with a view to better incentivising the achievement
of the Company’s strategy and further increasing
alignment to shareholders’ interests.
table 11 FY22 Changes to Executive KMP16 Fixed Remuneration17
FY22
Executive
KMP 12
Stuart Tonkin
Managing Director and CEO
from 22 July 2021
FY21
FAR
FY22
FAR
$1,200,000
$1,700,000
106
Simon Jessop
Chief Operating Officer
$600,000
$875,000
Morgan Ball
Chief Financial Officer
$600,000
$750,000
Hilary Macdonald
General Counsel & Company Secretary
$475,000
$625,000
The KMP are subject to a Minimum Holding
Condition Policy, requiring the Managing Director
& CEO to maintain a minimum level of Shares or
vested performance rights ownership of 100% of
FAR and other Executive KMP of 50% of FAR.
13. FY22 Executive KMP17 remuneration mix
Figure 5 illustrates that in relation to the Executive
KMP for FY22, variable remuneration represents at
least 71% of maximum remuneration opportunity,
with the Managing Director & CEO’s variable
remuneration comprising 82% of the maximum
remuneration opportunity. The FY22 LTIs include a
one-off 3-year award to compensate for a vesting
gap in FY24 as a result of moving to 4-year vesting
from this year, as detailed on pages 109 and 110.
16. For FY22, Luke Creagh, Chief Operating Officer and Raleigh Finlayson, Executive Director will not be included in the Company’s Executive KMP since
they will no longer fall within the definition of Key Management Personnel under AASB 124 Related Party Disclosures.
17. Table 11 is a voluntary disclosure included in this Report to improve transparency around how Northern Star rewards Executive KMP and has not been
prepared in accordance with Australian Accounting Standards.
Stuart Tonkin
18%
18%
36%
27%
Simon Jessop
27%
27%
27%
20%
Morgan Ball
Hilary Macdonald
30%
30%
23%
23%
30%
30%
17%
17%
Key
FAR
STI
LTI-1
LTI-2
Maximum opportunity:
Stuart Tonkin FY22 STI = 100%, LTI = 200% of FAR (4yr performance period), plus second LTI of 150% of FAR (3yr performance period).
Simon Jessop FY22 STI = 100% of FAR, LTI = 100% of FAR (4yr performance period), plus second LTI of 75% of FAR (3yr performance period).
Morgan Ball & Hilary Macdonald FY22 STI = 75% of FAR, LTI = 100% of FAR (4yr performance period), plus second LTI of 75% of FAR (3yr performance period).
14. FY22 Short term Incentive
The STI performance metrics have been slightly
modified for FY22 with the removal of Individual
KPIs. All KMP will be assessed on the same
companywide performance measures.
The maximum opportunity for the Managing
Director & CEO is 100% of FAR, with the other KMP
opportunities ranging from 75% to 100% of FAR.
•
STI opportunity is calculated as a percentage
of FAR
• Maximum STI opportunity is 100% of FAR
for the Managing Director & CEO and the
Chief Operating Officer, and the maximum
STI opportunity is 75% for the other Executive
KMP.
•
•
•
•
100% of the STI is weighted towards
companywide performance metrics (with no
individual strategic measures)
STI is measured over a one year performance
period (1 July 2021 to 30 June 2022)
The STI is settled 50% in cash and 50% in
Performance Rights. KMP can elect at the
time of offer to have the STI settled 100% in
Performance Rights.
The following Companywide performance
metrics which are aligned with our Vision and
Mission were chosen:
-
Total Recordable Injury Frequency Rate
(TRFIR) – this is a measure of how many
restricted work injuries (RWIs) and lost
time injuries (LTIs) occur per million hours
worked by our employees and contractors.
The safety of our employees is key to
our success and in sustaining long term
operational performance.
-
Employee Culture – a healthy constructive
culture underpins and promotes
employee engagement, feelings of job
107
satisfaction and retention, which together
contribute significantly to the safety of our
workplaces.
- Nil community, heritage or environmental
incidents – we act responsibly in our
environmental and social business
practices; we believe this supports the
creation of strong economic returns for
our shareholders, and shared value for our
stakeholders
-
Production Performance – Our production
is directly related to the financial returns
we generate for our shareholders.
-
Financial Management – disciplined and
efficient use of capital and operational
expenditure is key to maintaining control
over costs.
A summary of the FY20 Share Plan under which the
FY22 STI Performance Rights are granted is at page
124. Table 12 sets out the performance metrics and
hurdles applicable to the FY22 STI granted to the
Executive KMP, to be measured following the end of
the 1-year performance period on 30 June 2022.
NORTHERN STAR RESOURCES LIMITED ANNUAL REPORT 2021NORTHERN STAR RESOURCES LIMITED ANNUAL REPORT 2021 REMuNERAtION REPORt
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table 12 FY22 STI KPIs (performance period 1 July 2021 to 30 June 2022)
KPIs
Weighting
Measure
Metric
20%
Total Recordable Injury
Frequency Rate18
Threshold TRIFR <5.6 (FY21) = 10%
Target < 5.3 = 15%
Stretch TRIFR <5.0 = 20%
linear pro rata between these figures (no
fatality gateway for vesting)
5%
5%
40%
30%
Employee Culture
Survey Benchmark
Threshold Perform Culture Survey
STARR+E > 65% employees = 5%
(minimum participation rate required is 65% of
all Northern Star group employees)
Environmental
& Social
Nil materially adverse Community, Heritage
or Environmental Incidents
Gold Sales within
stated guidance
(pro-rata)
AISC within stated
guidance
(pro-rata)
Threshold: 1,550 koz = 0%
Target: 1,600 koz = 50%
Stretch: 1,650 koz = 100%
Threshold: A$1,575/oz = 50%
Target: A$1,525/oz = 75%
Stretch: A$1,475/oz = 100%
Employee
Environment
Social
Governance
(30%)
Production
Performance
(40%)
Financial
Management
(30%)
108
TOTAL
100%
The Board retains discretion to adjust the STI payments
Tiffany Collins, Resource
Development Geologist
at Thunderbox, Yandal
operations.
18. The pre-merger Northern Star TRIFR was 4.2 at 30 June 2021. As a consequence of the merger with Saracen, the Group TRIFR was 5.6 at 30 June 2021.
15. FY22 Long term Incentive
To better align the LTI with the interests of
shareholders, the Board has increased the
performance period of the LTI from three to four
years taking effect from FY22 with measurement
at 30 June 2025. To fill the vesting gap in the third
year (30 June 2024) as a result of the increase
in performance period, a decision was made to
award a one-off LTI grant in FY22 with a three-
year performance period (identified below as
LTI-2) which will be measured at 30 June 2024
and is at 75% of the annual grant amount. It does
not represent a doubling up of LTI incentives but
this ensures that KMP will have a portion of LTI
opportunity subject to vesting in each year. Given
the reduction to 75% of the annual grant amount in
year 3, this represents a diminution in the awards
KMP would have received had the Board retained
3-year vesting.
The performance metrics in the FY22 LTI grants
have also been changed.
The Return on Invested Capital has been replaced
by two relative Total shareholder Return measures
against a group of ASX and international gold peers
with whom the Company may compete for inorganic
growth activity and for human capital.
The GDX index has been replaced by the S&P TSX
Global Gold Index as an appropriate alternative peer
group to the ASX/Internatinal gold peers mentioned
above.
The strategic mine life performance measures have
been replaced with new ESG metrics relating to an
absolute reduction in greenhouse gas emissions,
indigenous business supply chain development, and
water management. These measures were included
following feedback from shareholders. Safety
measures have been included in both the STI and
LTI as this rewards consistent performance over the
long term.
•
LTI opportunity is calculated as a percentage
of FAR
• Maximum LTI-1 opportunity is 200% of FAR for
the Managing Director & CEO, and 100% for
the other Executive KMP.
• Maximum LTI-2 opportunity is 150% of FAR for
the Managing Director & CEO, and 75% for the
other Executive KMP.
•
•
•
•
LTI-1 is measured over a four year performance
period (1 July 2021 to 30 June 2025). This is
an annual grant, and differs from the FY20
and FY21 LTI grants which were subject to a
three year performance period. The rationale
for extending the performance period for
the annual LTI grant from three to four years
is to further align the KMP with long term
outcomes.
LTI-2 is measured over a three year
performance period (1 July 2021 to 30 June
2024). As described above, this LTI-2 grant
is designed to fill the vesting gap created by
moving from a three-year vesting scheme to a
four-year scheme.
The LTI is settled 100% in Performance Rights.
A service condition requiring full time
employment applies throughout the
performance period for both LTI.
A summary of the FY20 Share Plan under which
the FY22 STI Performance Rights are granted is at
pages 124 to 125.
Table 13 sets out the KPIs applicable to the FY22
LTI granted to the Executive KMP (in the case
of the Managing Director & CEO, subject to
shareholder approval at Annual General Meeting
on 18 November 2021). The KMP grants will occur
following the Annual General Meeting. The provision
of the two LTI grants for FY22 aligns all KMP with
similar long term incentive opportunity and provides
both retention and aligned awards for KMP.
109
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table 13 FY22 LTI-1 KPIs – 4 and 3 year performance period
16. FY21 and FY22 Non-Executive Directors’ Remuneration
KPIs
Weighting
LTI-1
(4yr)
LTI-2
(3yr)
Measure
Metric
Summary of Fees payable to Non-Executive Directors for FY21 and FY22 is provide in Table 14.
table 14 Non-Executive Director FY21 and FY22 fees
110
35%
40%
RTSR to peer group
including Australian
and international
peers19
Gateway RTSR < 50th percentile = 0% vest
Threshold RTSR = 50th percentile = 50% vest
Target RTSR > 75th percentile = 100% vest
Maximum RTSR between 50th and 75th percentile = 50%
to 100% vest on a linear basis
RTSR to be assessed in home currencies
Relative
Total
shareholder
Return
Modifier: Where the Company TSR performance is negative at the end of the assessment period, and the
Company TSR performance is equal to or exceeds S&P TSX Global Gold Index TSR performance, the number
of Performance Rights which may vest is 50% of the number determined from the vesting scale above
35%
40%
RTSR to the S&P TSX
Global Gold Index
(GGI)
Gateway RTSR< Index 0%
Threshold RTSR=Index – 50%
Target RTSR>7.5% above the Index for the 3-year award
and >10% for the 4-year award = 100% vest on a straight
line basis
Modifier: Where Company TSR performance is negative at the end of the performance period, and the
Company TSR performance is equal to or exceeds S&P TSR Global Gold Index performance, the number
of Performance Rights which may vest is 50% of the number determined from the vesting scale above.
10%
8%
Reduce absolute
carbon emissions
ESG metrics
10%
6%
LTI-1 Introduce
Water conservation
Project(s)
LTI-2 Support
Indigenous
businesses
10%
6%
A Reportable TRIFR
(12 month moving
average)
Reduce absolute carbon equivalent emissions from
existing fixed asset levels:
• LTI-1 – by 100,000t (CO2 equivalent) by end of FY25
on a sustaining annualised basis
• LTI-2 – by 50,000t (CO2 equivalent) by end of FY24
on a sustaining annualised basis
• LTI-1 To reduce baseline usage on potable scheme
water sources (KCGM) by 10%.
• LTI-2 Establish sustaining Indigenous Business Supply
contracts of $20Mpa by end of FY24
Prorated between:
• LTI-1 – 5.0 (50%) and 4.8 (100%)
• LTI-2 – 5.2 (50%) and 5.0 (100%)
subject to a threshold gate of 10% below industry average
for metalliferous mining (surface and underground and
exploration), as reported by DMIRS for 2023-2024 for LTI-
1, and 2022-2023 for LTI-2 20
Service
condition
Board
Discretion
In addition to the KPIs described above, a service condition will apply – that is, subject to Board
discretion, the employee must continue to be employed by the Company on a full time basis until 30
June 2025 for LTI-1 or 30 June 2024 for LTI-2.
The Board retains discretion to adjust LTI outcome in the case of, but not limited to, a fatality
TOTAL
100%
19. Peer group comprises Newcrest, Kirkland Lake, Agnico Eagle, Kinross, Goldfields, AngloGold Ashanti, B2 Gold, Endeavour, Evolution, Newmont, Barrick.
20. Company TRIFR at 30 June 2021 was 5.6 and the industry average was 6.2.
FY21
FY22
Non-Executive Director fees (fixed annual remuneration payable in cash (inclusive of superannuation))
Chairman
n/a
$575,000
Other Non-Executive Directors
$175,000
$190,000 21
Additional fees
Lead Independent Director*
Audit & Risk Committee
Remuneration Committee
Environmental, Social & Safety
Committee
Chair
Member
Chair
Member
Chair
Member
Exploration and Growth Committee Chair
Nomination Committee
Member
Chairman
Member
$40,000
$60,000
$35,000
$20,000
$30,000
$15,000
$15,000
$7,500
n/a
n/a
nil
nil
$50,000
$25,000
$50,000
$25,000
$40,000
$20,000
$30,000
$15,000
nil
nil
111
* The current Lead Independent Director, Anthony
Kiernan, has announced his intention to retire
with effect at the November 2021 Annual General
Meeting. It is not intended that this role will continue
beyond the Annual General Meeting in view of the
Chairman’s appointment on 1 July in a non-executive
capacity.
All the Non-Executive Directors including the
Chairman are subject to a Minimum Holding
Condition Policy, requiring them to maintain a
minimum level of security ownership of 100% of the
NED base fee of $190,000.
Statutory remuneration disclosures for Non-
Executive Directors for the current and previous
financial year are provided in Table 15, calculated
with reference to the Corporations Act and
Australian Accounting Standards, in Australian
dollars.
21. The Non-Executive Directors can elect at the start of each financial year to receive a $50,000 portion of their NED base fee in NED Share Rights under the
FY20 NED Share Plan, the terms of which are summarised at page 126 of this Report. Anthony Kiernan, John Richards and Sally Langer have each elected
to take NED Share Rights in lieu of $50,000 of their NED base fee, subject to shareholder approval at the November 2021 AGM.
NORTHERN STAR RESOURCES LIMITED ANNUAL REPORT 2021NORTHERN STAR RESOURCES LIMITED ANNUAL REPORT 2021
REMuNERAtION REPORt
REMuNERAtION REPORt
table 15 Non-Executive Directors FY20 & FY21 remuneration
Name
Year
Base Fee 26
Performance
Rights
Audit & Risk
Committee
ESS
Committee
Remuneration
Committee
Exploration
& Growth
Super-
annuation
Peter O’Connor22
John Fitzgerald
Shirley In'tVeld 23
Mary Hackett
Nicholas
Cernotta
Christopher
Rowe24
Anthony
Kiernan25
Sally Langer 25
John Richards25
TOTAL
2021
2020
2021
2020
2021
2020
2021
2020
2021
2020
2021
2020
2021
2020
2021
2020
2021
2020
2021
2020
$
70,995
114,155
136,660
150,685
114,155
114,155
114,155
114,155
114,155
114,155
-
42,847
75,383
-
60,862
-
62,268
-
748,633
650,152
112
$
34,035
42,578
54,715
42,578
54,715
42,578
54,715
42,578
54,715
42,578
-
15,933
-
-
-
-
-
-
252,895
228,823
$
-
2,602
31,963
31,963
12,285
13,849
18,265
15,749
11,359
15,663
-
-
-
-
7,296
-
7,116
-
88,284
79,826
22. Peter O'Connor resigned as a Non-Executive Director of the Company on 12 February 2021 on Implementation of the Merger with Saracen Minerals Holdings Limited.
23. Shirley In't Veld resigned as a Non-Executive Director of the Company on 30 June 2021
24. Christopher Rowe resigned as Non-Executive Director of the Company at the Annual General Meeting held on 14 November 2019'.
25. Anthony Kiernan, Sally Langer and John Richards joined the Board as Non-Executive Directors of the Company on 12 February 2021 on Implementation of the merger with
Saracen Minerals Holdings Limited.
26. Base fee in this table includes the Lead Independent Director fee payable to John Fitzgerald until 12 February 2021 from which point Anthony Kiernan
was appointed Lead Independent Director
$
4,131
6,849
-
976
-
976
13,699
11,747
-
-
-
1,952
2,630
-
-
-
-
-
$
8,262
11,736
13,699
14,821
-
1,952
-
-
27,397
25,162
-
2,004
5,259
-
5,472
-
-
-
20,460
22,500
60,089
55,675
$
-
-
-
-
6,178
-
-
-
5,153
-
-
-
-
-
-
-
10,675
-
22,006
-
$
7,922
12,857
17,321
18,852
12,599
12,439
22,881
13,457
15,016
14,723
-
4,400
7,911
-
6,995
-
7,495
-
115,461
76,728
Total
$
125,345
190,777
254,358
259,875
199,932
185,949
223,715
197,686
227,795
212,281
-
67,136
91,183
-
80,625
-
87,554
-
1,290,507
1,113,704
113
NORTHERN STAR RESOURCES LIMITED ANNUAL REPORT 2021NORTHERN STAR RESOURCES LIMITED ANNUAL REPORT 2021
REMuNERAtION REPORt
REMuNERAtION REPORt
table 16 FY20 and FY21 Executive KMP Statutory Remuneration Disclosures
Name & Role
Year
Fixed Remuneration
Variable
Total Remuneration
114
-
Cash
Salary
Other
Benefits32
Movement
in leave
provisions33
Post
Employment
Benefits34
$
$
$
$
Executive
Bill Beament
Executive Chair
Raleigh Finlayson27
Managing Director
Stuart Tonkin
Chief Executive Officer
2021
2020
2021
2020
2021
2020
Luke Creagh
Chief Operating Officer -
Pogo & Yandal
2021
2020
Ryan Gurner28
Chief Financial Officer
Hilary Macdonald
General Counsel &
Company Secretary
Morgan Ball29
Chief Financial Officer
2021
2020
2021
2020
2021
2020
Simon Jessop30
Chief Operating Officer -
Kalgoorlie operations
2021
2020
1,375,000
1,375,000
381,924
10,244
(51,743)
253,685
527,904
-
1,175,000
1,075,000
575,000
540,000
294,110
401,290
450,000
400,000
220,760
-
220,760
-
1,448
-
7,814
7,414
10,263
11,450
10,924
12,185
10,158
10,834
1,428
-
1,424
-
21,162
-
55,323
127,689
43,025
74,071
12,677
55,719
12,308
17,721
10,855
-
13,306
-
25,000
25,000
9,604
-
25,000
25,000
25,000
25,000
15,479
25,000
25,000
25,000
9,604
-
9,604
-
TOTAL
2021
2020
4,838,534
3,791,290
425,383
52,127
116,913
528,885
144,291
125,000
This table represents remuneration for FY21 or part thereof during which a person was a KMP of Northern Star.
27. Appointed as Managing Director on 12 February 2021. Short-term
30. Appointed as Chief Operating Officer - Kalgoorlie operations on 12
incentive pro-rated for the period of service with NST from 12 February
2021 to 30 June 2021.
February 2021. Short-term incentive pro-rated for the period of service
with NST from 12 February 2021 to 30 June 2021.
28. Ceased as Chief Financial Officer on 12 February 2021. Remuneration pro-
rated for the period from 1 July 2020 to 12 February 2021
31. Luke Creagh, Chief Operating Officer held 150,000 Restricted Shares that
were subject to a holding lock until 1 July 2021 with a service condition.
29. Appointed as Chief Financial Officer on 12 February 2021. Short-term
32. Other Benefits include telephone allowance, salary continuance
incentive pro-rated for the period of service with NST from 12 February
2021 to 30 June 2021.
insurance, private health insurance, D&O Insurance and parking - as well
as any termination payments incurred during FY21.
STI Cash
Payment
STI Performance
Rights
LTI Performance
Rights
$
$
Total
$
756,534
490,329
1,689,525
1,004,302
4,176,240
3,158,560
-
-
867,745
385,684
2,190,78931
271,297
167,897
62,680
138,551
97,505
-
-
-
-
74,968
-
613,087
438,520
159,541
132,174
80,326
93,236
93,552
77,735
14,469
-
14,469
-
847,109
0%
2,743,969
2,059,307
3,186,618
1,147,217
581,413
734,579
856,038
628,795
348,085
-
354,864
-
4,121,516
1,307,495
2,739,937
1,745,967
13,094,336
7,728,458
Performance
Related
Remuneration35
%
59%
47%
34%
0%
54%
40%
17%
43%
43%
33%
42%
28%
30%
0%
31%
0%
43%
42%
115
$
-
-
212,023
-
-
-
183,000
93,225
-
84,469
126,469
-
90,969
-
95,301
-
707,762
177,694
33. Recognised in accordance with the Company's long service leave policy.
Refer to Note 8(g) to the Financial Statements for further details. NST
assumed employee entitlements for Saracen employees on merger. Bill
Beament's leave entitlements were paid out on termination.
34. Superannuation, which in FY21 is capped at $25,000 for each member of
the Executive KMP
35. Performance related remuneration percentage calculation excludes COO
retention rights held by Luke Creagh that had no performance conditions
other than a service period to 30 June 2021.
NORTHERN STAR RESOURCES LIMITED ANNUAL REPORT 2021NORTHERN STAR RESOURCES LIMITED ANNUAL REPORT 2021 REMuNERAtION REPORt
117
Maintaining the dry
stack tailings facility
Keith Koval, Surface Operations
Leading Hand, Pogo operations.
NORTHERN STAR RESOURCES LIMITED ANNUAL REPORT 2021 REMuNERAtION REPORt
REMuNERAtION REPORt
17. Allocation methodology for grant of FY21 StI & LtI Performance Rights
18. Allocation methodology for grant of FY21 NED Share Rights
The quantum of LTI and STI Performance Rights
which were granted to the Executive KMP in
FY21 was determined by dividing a percentage of
their respective FAR by the face value of Shares
(20 day VWAP prior to 1 July 2020 which was
$13.5537). The percentage is set by the Board
according to the role performed and experience
held by each of the Executive KMP.
The maximum possible total value of the
Performance Rights is the assessed fair value at the
grant dates of the Performance Rights, calculated in
accordance with Accounting Standards, multiplied
by the number of Performance Rights granted.
table 17 Fair value of vested FY21 STI Performance Rights 36
held by Executive KMP at 30 June 2021
Number
of Rights
Fair value
per right
($)
Fair value
of rights
total ($)
Performance
Achieved
(%)
Number
Vested
Number
forfeited/
lapsed
Bill Beament
123,951
$12.52
$1,551,867
58.5%
60,426
63,525
Raleigh Finlayson
Nil
n/a
n/a
n/a
n/a
n/a
Stuart Tonkin
106,244
$14.85
$1,577,723
66.0%
58,434
47,810
The Non-Executive Directors can elect at the start
of each financial year to receive a $50,000 portion
of their NED base fee in NED Share Rights under
the FY20 NED Share Plan (subject to shareholder
approval), the terms of which are summarised at
page 126 of this Report.
The quantum of NED Share Rights which were
granted to the Non-Executive Directors during FY21
as approved by shareholders at the November AGM
was determined by dividing the amount of $50,000
for each Non-Executive Director by the face value
of Shares (calculated as the 20 day VWAP up to and
including 30 June 2020, which was $13.5537).
The maximum possible total value of the NED Share
Rights is the assessed fair value at the grant dates of
the NED Share Rights, calculated in accordance with
Accounting Standards, multiplied by the number of
NED Share Rights granted.
The only vesting condition of the FY21 NED Share
Rights is that the individual remains a Non-Executive
Director of the Company on 30 June 2021, with pro
rata reduction if the directorship ends for any reason
prior to 30 June 2021.
table 19 Fair value of vested FY21 NED Share Rights held by the
Non-Executive Directors at 30 June 2021
Number
of Rights
Fair value
per right
($)
Fair value
of rights
total ($)
Service
condition
satisfied
to 100%
Number
Vested
Number
forfeited/
lapsed
Luke Creagh
26,561
$14.85
$394,431
61.0%
13,501
13,060
Peter O’Connor 38
2,309
$14.74
$34,035
Hilary Macdonald
15,770
$14.85
$234,185
71.0%
9,330
6,440
118
Morgan Ball
Simon Jessop
Nil
Nil
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
table 18 Fair value of unvested FY21 LTI Performance Rights
held by Executive KMP at 30 June 2021
37
Number
of Rights
Fair value per
right
($)
Fair value
of rights total
($)
Number
Vested
Bill Beament
103,293
$9.81
$1,013,304
Raleigh Finlayson
68,862
$10.36
$713,410
Stuart Tonkin
Luke Creagh
177,073
44,268
Hilary Macdonald
26,284
Morgan Ball
Simon Jessop
14,756
14,756
$11.95
$11.95
$11.95
$9.38
$9.38
$2,116,022
$529,003
$314,094
$138,411
$138,411
SAR KMP FY21 Performance Rights were pro rated for FY21 from 12 Feb 2021
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Number
forfeited/
lapsed
206,585
Nil
Nil
Nil
Nil
Nil
Nil
36. FY21 STI Performance Rights grant date was 30 October 2020; measurement date was 30 June 2021.
37. FY21 LTI Performance Rights grant date was 30 October 2020, except for Raleigh Finlayson, Morgan Ball and Simon Jessop whose LTIs were granted on
12 February 2021. Measurement date is 30 June 2023.
John Fitzgerald
Shirley In’t Veld
Mary Hackett
Nick Cernotta
Anthony Kiernan
Sally Langer
John Richards
3,712
3,712
3,712
3,712
n/a
n/a
n/a
$14.74
$54,715
$14.74
$54,715
$14.74
$54,715
$14.74
$54,715
n/a
n/a
n/a
n/a
n/a
n/a
100%
100%
100%
100%
100%
n/a
n/a
n/a
2,309
3,712
3,712
3,712
3,712
n/a
n/a
n/a
Nil
Nil
Nil
Nil
Nil
n/a
n/a
n/a
119
38. Held as at time of resignation. Total number of FY21 NED Share Rights reduced pro rata to reflect Mr O’Connor’s service period from 30 June 2020
up to the date of his resignation on 12 February 2021.
Ross Wilkinson and Kratonga
Ohuma at the Kanowna Belle
tailings facility, Kalgoorlie
Opertaions.
NORTHERN STAR RESOURCES LIMITED ANNUAL REPORT 2021
REMuNERAtION REPORt
REMuNERAtION REPORt
19. Securities held by the KMP during FY21
The following tables set out the Shares and Performance Rights held by the KMP at the
start and end of financial year ended 30 June 2021.
table 20 Shares held by the KMP 39 on 1 July 2020 and 30 June 2021 and changes
Balance on
1 July 2020
Changes
during FY21
Balance on
30 June 2021
Directors
Converted from vested
Performance Rights /
NED Share Rights
Acquired / sold on
market (as applicable)
Bill Beament
5,845,274 40
60,844
120
John Fitzgerald
63,198
Peter O’Connor
400,000
Shirley In’t Veld
Mary Hackett
Nick Cernotta
Raleigh Finlayson41
Anthony Kiernan41
John Richards41
Sally Langer41
Executive KMP
53,198
15,405
-
-
-
-
-
Stuart Tonkin
1,100,000
Simon Jessop41
-
Luke Creagh
475,000 42
Ryan Gurner
Morgan Ball41
Hilary Macdonald
5,555
-
11,111
-
-
4,623
4,623
4,623
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
5,906,118
63,198
400,000
57,821
20,028
4,623
2,266,97844
2,266,978
33,754
10,558
2,210
33,754
10,558
2,210
236,516 45
(183,620)
-
471,98045
236,516
291,380
5,555
471,980
121,525
110,41443
-
TOTAL
7,968,741
185,127
2,763,376
10,917,244
39. Including their close family members and entities controlled by them. No
42. 150,000 of these were Restricted Shares during FY21, released from
Shares are held nominally by any of the KMP.
40. 976,001 were at 30 June 2021 subject to holding lock until the loan
associated with these former vested FY15 and FY16 performance shares
was repaid. This loan was repaid in August 2021.
41. Was not a KMP on 1 July 2020. Shares acquired during FY21 were as
a result of conversion of Saracen shares to Northern Star Shares as
the Scheme consideration for the merger of the companies which was
implemented on 12 February 2021. Under the Scheme Booklet for the
merger, Raleigh Finlayson, Morgan Ball and Simon Jessop agreed to
holding locks over a portion of their Northern Star shareholding acquired
under the merger. These are detailed in the footnotes to this table.
holding lock upon the service vesting condition being satisfied on 1 July
2021. Employee remains employed by the Company.
43. 58,750 are subject to holding lock until 17 October 2021.
44. 7,839 are subject to holding lock until 30 June 2021; 29,398 are subject
to holding lock until 30 June 2022 and 42,333 are subject to holding
lock until 30 June 2023.
45. 5,880 are subject to holding lock until 30 June 2021; 22,049 are subject
to holding lock until 30 June 2022 and 31,750 are subject to holding lock
until 30 June 2023.
table 21 NED Share Rights held by the Non-Executive
Directors on 1 July 2020 and on 30 June 2021
Non-Executive Directors – NED Share Rights
Balance on
1 July 2020
Balance on
30 June 2021
John Fitzgerald
Peter O’Connor
Shirley In’t Veld
Mary Hackett
Nick Cernotta
John Richards46
Anthony Kiernan46
Sally Langer 46
TOTAL
4,623
4,623
4,623
4,623
4,623
-
-
-
8,335
2,309
3,712
3,712
3,712
-
-
-
23,115
21,780
46. The Non-Executive Directors that commenced on 12 February 2021 following the merger with Saracen did not receive a grant of FY21 NED Share Rights.
121
table 22 Unvested Performance Rights held by the Executive KMP on 1 July
2020 and on 30 June 2021
Bill Beament
Stuart Tonkin
Raleigh Finlayson47
Luke Creagh
Simon Jessop47
Morgan Ball 47
Ryan Gurner
Hilary Macdonald
TOTAL
47. Was not a KMP on 1 July 2020.
Balance on
1 July 2020
Balance on
30 June 2021
535,622
291,668
-
81,959
-
-
196,063
51,825
1,157,137
822,196
459,284
68,862
273,074
14,756
14,756
249,390
71,528
1,973,846
(75,000)
1,025,000
Executive KMP - Performance Rights
NORTHERN STAR RESOURCES LIMITED ANNUAL REPORT 2021NORTHERN STAR RESOURCES LIMITED ANNUAL REPORT 2021 REMuNERAtION REPORt
REMuNERAtION REPORt
20. Contractual Arrangements with Executive KMP
The following contractual arrangements were in place with the Executive KMP for FY21.
table 23 Contractual arrangements
Element
Executive Chair
(1 July 2020 to 1 July 2021)
Other Executive KMP
Element
Managing Director & CEO
(From 22 July 2021)
Other Executive KMP
Contract Duration
No fixed term, subject to termination
with or without cause
No fixed term, subject to
termination with or without cause
Contract Duration
No fixed term, subject to termination
with or without cause
No fixed term, subject to
termination with or without cause
Notice Period for termination
by the company
12 months
Notice period for termination
by the employee
3 months
FAR
$1,400,000
6 months
3 months
$475,000 - $1,200,000 – refer to
Table 11
FY21 STI Opportunity
• 100% Performance Rights
(if election is made)
Or
• 50% Performance Rights/
50% cash
FY21 LTI Opportunity
3 year annual grant
Element
122
120% of FAR
90-120% of FAR
300% of FAR
75%-200% of FAR
Managing Director
(12 February 2021 to 22 July 2021)
Other Executive KMP
Contract Duration
No fixed term, subject to termination
with or without cause
No fixed term, subject to
termination with or without cause
Notice Period for termination
by the company
6 months
Notice period for termination
by the employee
3 months
6 months
3 months
FAR
$1,400,000
$475,000 - $1,200,000 – refer to
Table 11
FY21 STI Opportunity
• 100% Performance Rights
(if election is made) ;
Or
• 50% Performance Rights/
50% cash
FY21 LTI Opportunity
3 year annual grant
100% of FAR (cash)
90-120% of FAR
200% of FAR
75%-200% of FAR
Notice Period for termination
by the company
6 months
Notice period for termination
by the employee
3 months
6 months
3 months
FAR
$1,700,000
$625,000 - $875,000 – refer to
Table 11
FY22 STI Opportunity
• 100% performance rights (if
election is made)
Or
• 50% performance rights/50%
cash
FY22 LTI Opportunity
4 year annual grant
- Performance Rights
3 year once off grant LTI-2-
Performance Rights
100% of FAR
75-100% of FAR – refer to
Section 14
123
200% of FAR
100% of FAR - refer to Section 15
150% of FAR
75% of FAR - refer to Section 15
21. transactions with KMP and previous disclosure of “Related party”
transactions with Bill Beament
The Company has in place policies and procedures
which govern transactions involving KMPs and
their related parties, and these policies and
procedures restrict the involvement of the KMP
or related party in the negotiation, awarding or
direct management of the resultant contract. In
the Company’s 2017 Annual Report, specifically
Note 18 to the Consolidated Financial Statements,
the Company reported that the beneficial minority
interest of 23% held by Mr Beament in AUD Pty
Ltd, the sole shareholder of Australian Underground
Drilling Pty Ltd (AUD), being a supplier of goods and
services to the Company, did not require reporting
under the Accounting Standards. For the purposes
of the FY21 Annual Report, the Company is of the
same view, having applied the necessary criteria
under the Australian Accounting Standards for
FY21. Mr Beament retired from the Company and
Board on 1 July 2021. The addition of Pogo, 100%
of the KCGM operations, Carosue Dam operations
and Thunderbox operations further increased the
diversity and improved the risk mitigation strategy.
Refer to note 19(c) in the annual financial report for
more information.
NORTHERN STAR RESOURCES LIMITED ANNUAL REPORT 2021NORTHERN STAR RESOURCES LIMITED ANNUAL REPORT 2021 REMuNERAtION REPORt
REMuNERAtION REPORt
22. Summary of Company’s FY20 Share Plan
Below is a summary of the FY20 Share Plan
approved by shareholders at the November 2020
AGM. The Company issues long term and short
term incentives as Performance Rights under this
Plan, using a face value allocation methodology.
Incentivising the Company’s high-performing team
is the essential link between senior management
remuneration, the Company’s performance and
delivery of long-term sustainable shareholder value.
1
Purpose
The main objectives of the Plan are to create a stronger link between performance
and longer-term remuneration outcomes for those who participate in the Plan
(Participants) and allow Participants to share in the future growth and profitability of
the Company.
2
Eligible Directors
Broadly, any full or part-time employee (including an executive director) of the
Company or a subsidiary (Group Employee) who has not given a notice of resignation
or been given a notice of termination of employment is eligible. Non-Executive
Directors are not eligible to participate.
3
Administration
of the Plan
The Plan is administered by the Remuneration Committee under the directions of the
Board. The Board may delegate its powers and discretions, determine procedures for
the administration of the Plan, and resolve questions of interpretation and disputes in
relation to the Plan.
4
Invitations
124
The Board may issue Invitations to Eligible Employees to be granted Awards under
the Plan. The terms and conditions in the Invitation will prevail to the extent of any
inconsistency with the FY20 Share Plan rules. For Group Employees, the measurable
objectives, the weighting amongst them and the performance periods during which
time they are required to be met, are set by the Board annually in relation to the
Executive KMP, and by the CEO annually in relation to other senior management
employees, for the short term incentives and long term incentives for each year in
which Awards are granted under the Plan.
5
6
7
8
9
Awards
Awards consist of grants of Performance Rights or other conditional rights to be
delivered a Share on the vesting of the Participant's Share Rights.
No Transfer
A Share Right may not be transferred without the prior written approval of the Board.
Vesting
Conditions
Awards are subject to Vesting Conditions. Vesting Conditions are determined by the
Board and described in the Invitation, and include performance conditions set by the
Board.
The Board may waive, replace or amend a Vesting Condition, for example, if the
Board determines that the original performance measure is no longer appropriate,
practical or applicable.
Vesting of Awards Awards will vest if and when the Board determines that the Vesting Conditions are
satisfied and the Participant is notified of this in writing.
Delivery of Shares
Following vesting of a Share Right, the Participant will be entitled to delivery of a
Share upon exercising the Share Right. Awards that vest are normally exercisable
up until the tenth anniversary of the date of grant of the Awards (although shorter
periods will apply if the Participant ceases to be employed).
The Board will determine how the Shares are to be delivered, which may be by issue
of new Shares to, purchase and transfer to, or procuring Shares to be held for the
benefit of (i.e. through the Company’s Employee Share Trust), the relevant Participant,
or a combination of such methods of delivery.
Alternatively, the Board may determine to settle in cash in lieu of delivering Shares.
The cash payment would be based on the volume weighted average price of Shares
in the 20 ASX trading days prior to the date of exercise.
10
Ranking of Shares Any Shares delivered to a Participant when an Award is exercised will rank equally
with all other issued Shares.
11
Restricted Shares
Invitations may specify that Shares delivered on vesting cannot be disposed of for a
specified period following delivery.
12
Termination
of employment
The Invitation will specify the consequences of cessation of employment during a
performance period, depending on the reasons, and subject to Board discretion.
For example, where employment ends because of agreed mutual separation, the
proportion of the unvested Share Rights which is the same as the proportion of the
relevant performance period during which the Participant was employed, may or may
not lapse according to Board discretion, and the balance of the Share Rights will lapse
on cessation, unless the Board exercises discretion otherwise.
13 Malus and
Clawback
The Board may reduce unvested Awards, and clawback previously vested Awards
from a Participant or former Participant within two years from the date of delivery of
Shares (or receipt of cash paid in lieu of delivering Shares). The Board may exercise
this power having regard to matters it considers relevant acting in good faith in the
interests of the Company, such as instances of:
• material financial misstatements;
• significant negligence;
• significant legal, regulatory and/or policy non-compliance;
• significant harmful act by the individual; or
• the Board holding the opinion that the Participant received or would receive a
grossly unjustifiable benefit because of factors outside the Participant’s control.
14 No participation
Share Rights do not entitle the holder to participate in a new issue of Shares or other
securities, or the right to any dividends or distributions paid on Shares.
125
15
Control
transactions
If a control event occurs:
a the proportion of the unvested Share Rights of each Participant which is the same
as the proportion of the relevant performance period that has expired before
the date of the control event (determined by the Board) will vest immediately
(regardless of the status of the Vesting Conditions, without limiting the Board’s
ability to exercise downward discretion if circumstances warrant this); and
b the balance of the Share Rights will vest or lapse on that date, as the Board
determines in its discretion.
A "control event" includes: a takeover bid where the bidder has acquired a relevant
interest in more than 50% of the Shares and either the Board has recommended the
bid or the bid has become unconditional; court approval of a scheme of arrangement
which will result in a person having a relevant interest in more than 50% of the Shares;
or another event which the Board declares to be a control event.
16
Amendment
The Board may amend the Plan. However, the Participant's consent is required
for amendments to the Plan that reduce the rights of the Participant in respect of
an Award that has already been granted (other than for legal reasons, correcting
manifest errors/mistakes or tax reasons).
17 Operation
The operation of the Plan is subject to the Company's Constitution, the Listing Rules,
the Corporations Act and other applicable laws.
18
Board Discretion
The Board retains absolute discretion to vary Awards or the application of the rules of
the Plan, and to exercise or refrain from exercising any power or discretion under the
FY20 Share Plan rules.
NORTHERN STAR RESOURCES LIMITED ANNUAL REPORT 2021NORTHERN STAR RESOURCES LIMITED ANNUAL REPORT 2021 REMuNERAtION REPORt
REMuNERAtION REPORt
23. Summary of Company’s FY20 NED Share plan
The non-executive Diectors may elect to receive $50,000 worth of NED Share Rights, reducing their fees by
$50,000, subject to shareholder approval. Further information is provided in section 18.
1
2
3
Purpose
The objective of the FY20 NED Share Plan is to provide the Non-Executive
Directors (Participants) with some alignment with the interests of the
Company’s shareholders. The Plan was approved by resolution of the
shareholders on 14 November 2019.
Eligible Directors
Non-Executive Directors.
Administration
of the Plan
The FY20 NED Share Plan will be administered under the directions of
the Board. The Board may delegate its powers and discretions, determine
procedures for the administration of the FY20 NED Share Plan, and resolve
questions of interpretation and disputes in relation to the FY20 NED Share
Plan.
4
Invitations
The Board may issue Invitations to Non-Executive Directors to be granted
Awards under the FY20 NED Share Plan. The terms and conditions in the
Invitation will prevail to the extent of any inconsistency with the FY20 NED
Share Plan rules.
126
5
6
7
8
Awards
Awards will consist of grants of Share Rights or other conditional rights to be
delivered a Share on the vesting of the Participant's Share Rights.
Share Rights not
transferable
A Share Right may not be transferred without the prior written approval of the
Board.
Vesting of Awards
Awards will vest on the last date of the financial year in which Awards are
granted, and the Participant is notified of this in writing.
Delivery of Shares
Following vesting of a Share Right, the Participant will be entitled to delivery
of a Share upon exercising the Share Plan Right. Awards that vest are normally
exercisable up until the tenth anniversary of the date of grant of the Awards
(although shorter periods will apply if the Participant ceases to be a Director
for any reason).
The Board will determine how the Shares are to be delivered, which may be
by issue of new Shares to, purchase and transfer to, or procuring Shares to be
held for the benefit of (i.e. through the Company’s Employee Share Trust), the
relevant Participant, or a combination of such methods of delivery.
Alternatively, the Board may determine to settle in cash in lieu of delivering
Shares. The cash payment would be based on the volume weighted average
price of Shares in the 20 ASX trading days prior to the date of exercise.
9
Ranking of Shares
Invitations may specify that Shares delivered on vesting cannot be disposed of
for a specified period following delivery.
10
Restricted Shares
Any Shares delivered to a Participant when an Award is exercised will rank
equally with all other issued Shares.
11
Non-Executive
Director loss
of office
Pro rata reduction of Awards will apply based on the number of days in the
relevant financial year during which the Non-Executive Director held office,
regardless of the reason for leaving office (such as retirement, not being re-
elected, being removed, death, incapacity, or total and permanent disability).
12
Malus and Clawback
The Board may reduce unvested Awards, and clawback previously vested
Awards from a Participant or former Participant within two years from the date
of delivery of Shares (or receipt of cash paid in lieu of delivering Shares). The
Board may exercise this power having regard to matters it considers relevant
acting in good faith in the interests of the Company. The Board intends for this
power to be exercised in instances of:
• material financial misstatements by the Company;
• significant negligence by the Company;
• significant legal, regulatory and/or policy non-compliance by the
Company;
• significant harmful act by the individual; or
• the Board holding the opinion that the Participant received or would
receive a grossly unjustifiable benefit because of factors outside the
Participant’s control.
13
14
No participation
rights
Share Rights do not entitle the holder to participate in a new issue of Shares or
other securities, or the right to any dividends or distributions paid on Shares.
Control transactions
If a control event occurs:
127
a the proportion of the unvested Share Rights of each Participant which is
the same as the proportion of the relevant financial year that has expired
before the date of the control event (determined by the Board) will vest
immediately (without limiting the Board’s ability to exercise downward
discretion if circumstances warrant this); and
b the balance of the Share Rights will vest or lapse on that date, as the Board
determines in its discretion.
A "control event" includes: a takeover bid where the bidder has acquired a
relevant interest in more than 50% of the Shares and either the Board has
recommended the bid or the bid has become unconditional; court approval
of a scheme of arrangement which will result in a person having a relevant
interest in more than 50% of the Shares; or another event which the Board
declares to be a control event.
The Board may amend the FY20 NED Share Plan. However, the Participant's
consent is required for amendments to the FY20 NED Share Plan that reduce
the rights of the Participant in respect of an Award that has already been
granted (other than for legal reasons, correcting manifest errors/mistakes or
tax reasons).
15
Amendment
16
Operation
The operation of the FY20 NED Share Plan is subject to the Company's
Constitution, the Listing Rules, the Corporations Act and other applicable
laws.
17
Board Discretion
The Board retains absolute discretion to vary Awards or the application of the
rules of the FY20 NED Share Plan, and to exercise or refrain from exercising
any power or discretion under the FY20 NED Share Plan rules.
NORTHERN STAR RESOURCES LIMITED ANNUAL REPORT 2021NORTHERN STAR RESOURCES LIMITED ANNUAL REPORT 2021 REMuNERAtION REPORt
REMuNERAtION REPORt
24. Auditor's Independence Declaration
Deloitte Touche Tohmatsu
ABN 74 490 121 060
Tower 2, Brookfield Place
123 St Georges Terrace
Perth WA 6000
GPO Box A46
Perth WA 6837 Australia
Tel: +61 8 9365 7000
Fax: +61 8 9365 7001
www.deloitte.com.au
The Directors
Northern Star Resources Limited
Level 1, 388 Hay Street
Subiaco WA 6008
24 August 2021
Dear Directors
AAuuddiittoorr’’ss IInnddeeppeennddeennccee DDeeccllaarraattiioonn ttoo NNoorrtthheerrnn SSttaarr RReessoouurrcceess LLiimmiitteedd
In accordance with section 307C of the Corporations Act 2001, I am pleased to provide the following declaration
of independence to the directors of Northern Star Resources Limited and its controlled entities.
128
As lead audit partner for the audit of the financial report of Northern Star Resources limited for the year ended
30 June 2021, I declare that to the best of my knowledge and belief, there have been no contraventions of:
• The auditor independence requirements of the Corporations Act 2001 in relation to the audit; and
• Any applicable code of professional conduct in relation to the audit.
Yours faithfully
DDEELLOOIITTTTEE TTOOUUCCHHEE TTOOHHMMAATTSSUU
DD KK AAnnddrreewwss
Partner
Chartered Accountants
Liability limited by a scheme approved under Professional Standards Legislation.
Member of Deloitte Asia Pacific Limited and the Deloitte organisation.
Peter Ganza, General
Manager - Thunderbox,
Yandal operations
129
NORTHERN STAR RESOURCES LIMITED ANNUAL REPORT 2021NORTHERN STAR RESOURCES LIMITED ANNUAL REPORT 2021
Financial
Report
FInancIal RepoRt
FInancIal RepoRt
In this Financial Report
Consolidated Statement of Profit or Loss and Other Comprehensive Income
For the year ended 30 June 2021
1. Consolidated Statement of Profit or Loss and Other Comprehensive Income
2. Consolidated Statement of Financial Position
3. Consolidated Statement of Changes in Equity
4. Consolidated Statement of Cash Flows
5. Notes to the Consolidated Financial Statements
133
134
135
137
138
132
Notes
3
5(a)
5(b)
5(c)
5(d)
12
6
Revenue
Cost of sales
Other income and expense
Space
Corporate, technical services and projects
Acquisition and integration costs
Impairment of assets
Finance costs
Gain on remeasurement of existing interest in KCGM
Profit before income tax
Income tax expense
Profit for the year
Other comprehensive income (OCI)
Items that may be reclassified to profit or loss
Share of other comprehensive income of associates and joint ventures
accounted for using the equity method
Exchange differences on translation of foreign operations
Gains on cash flow hedges
Items that may not be reclassified to profit or loss
Changes in the fair value of financial assets at fair value through OCI
Income tax relating to these items
Other comprehensive income for the year, net of tax
30 June
2021
$M
2,760.5
(2,183.7)
576.8
(7.8)
(98.6)
(231.8)
(545.6)
(28.4)
1,919.3
1,583.9
(551.4)
1,032.5
-
(33.4)
0.4
26.1
1.9
(5.0)
30 June
2020
$M
1,971.7
(1,447.6)
524.1
(3.0)
(81.3)
(45.0)
(28.3)
(21.9)
-
344.6
(86.3)
258.3
0.2
7.5
-
(10.3)
2.1
(0.5)
133
Total comprehensive income for the year
1,027.5
257.8
Total comprehensive income for the year is attributable to:
Owners of the Company
1,027.5
257.8
Cents
Cents
Earnings per share for profit attributable to the ordinary equity holders of the
Company:
Basic earnings per share
Diluted earnings per share
22(a)
22(b)
114.7
114.3
37.3
37.2
The above Consolidated Statement of Profit or Loss and Other Comprehensive Income should be read in conjunction
with the accompanying notes.
NORTHERN STAR RESOURCES LIMITED ANNUAL REPORT 2021NORTHERN STAR RESOURCES LIMITED ANNUAL REPORT 2021 FInancIal RepoRt
FInancIal RepoRt
Consolidated Statement of Financial Position
As at 30 June 2021
30 June
2021
$M
30 June
2020
$M
Notes
ASSETS
Current assets
Cash and cash equivalents
Trade and other receivables
Inventories
Current tax asset
Assets classified as held for sale
Total current assets
Non-current assets
Trade and other receivables
Inventories
Derivative financial instruments
Financial assets at fair value through other comprehensive income
Investments accounted for using the equity method
Property, plant and equipment
Right of use asset
Exploration and evaluation assets
Mine properties
Intangible assets
Assets classified as held for sale
Total non-current assets
Total assets
134
LIABILITIES
Current liabilities
Trade and other payables
Borrowings
Current tax liabilities
Provisions
Liabilities directly associated with assets classified as held for sale
Total current liabilities
Non-current liabilities
Borrowings
Provisions
Deferred tax liabilities
Total non-current liabilities
Total liabilities
Net assets
EQUITY
Share capital
Reserves
Retained earnings
Total equity
7(b)
7(a)
8(f)
8(e)
14
7(a)
8(f)
8(a)
8(b)
8(c)
8(d)
8(c)
7(d)
7(c)
8(e)
8(g)
14
7(c)
8(g)
8(e)
9(a)
771.9
122.0
583.9
155.9
204.3
1,838.0
0.9
404.3
0.5
23.2
-
1,544.9
138.5
609.3
6,684.1
5.6
-
9,411.3
677.3
144.5
289.7
-
-
1,111.5
4.3
314.8
0.9
13.3
8.0
789.4
44.9
479.0
1,018.5
9.5
17.4
2,700.0
11,249.3
3,811.5
296.5
86.5
-
323.3
65.3
771.6
801.6
772.3
925.3
2,499.2
155.6
361.3
12.0
109.3
-
638.2
449.8
448.1
131.6
1,029.5
3,270.8
1,667.7
7,978.5
2,143.8
6,435.1
14.9
1,528.5
1,323.9
13.4
806.4
7,978.5
2,143.8
Consolidated Statement of Changes in Equity
For the year ended 30 June 2021
Financial
assets at fair
value through
OCI
$M
Share
based
payments
reserve
$M
Foreign
currency
translation
reserve
$M
Retained
earnings
$M
Total
equity
$M
Notes
Share capital
$M
Balance at 1 July 2019
473.7
(6.6)
38.5
10.2
596.9
1,112.6
Profit for the year
Other comprehensive income
Total comprehensive income for the
year
Transactions with owners in their
capacity as owners:
Contributions of equity, net of
transaction costs and tax
Dividends provided for or paid
Employee share and option plans -
value of employee services
Exercise of employee share awards
Share plan loan repayment
Tax
Balance at 30 June 2020
9(a)
11(b)
-
-
-
808.1
-
1.2
12.3
-
28.6
850.2
1,323.9
-
(8.2)
(8.2)
-
-
-
-
-
-
-
(14.8)
-
-
-
-
-
6.6
(12.3)
0.1
(22.5)
(28.1)
10.4
-
7.7
7.7
258.3
-
258.3
(0.5)
258.3
257.8
-
-
-
-
-
-
-
17.8
-
(48.7)
-
-
-
-
(48.7)
806.5
808.1
(48.7)
7.9
-
0.1
6.1
773.5
2,143.8
Financial
assets at fair
value through
OCI
$M
Share
based
payments
reserve
$M
Foreign
currency
translation
reserve
$M
Cash flow
hedge
reserve
$M
Notes
Share capital
$M
Retained
earnings
$M
Total
equity
$M
135
Balance at 1 July 2020
1,323.9
(14.8)
10.4
17.8
Profit for the year
Other comprehensive
income
Total comprehensive
income for the year
-
-
-
-
28.0
28.0
-
-
-
-
(33.4)
(33.4)
-
-
806.5
2,143.8
1,032.5
1,032.5
0.4
-
(5.0)
0.4
1,032.5
1,027.5
The above Consolidated Statement of Financial Position should be read in conjunction with the accompanying notes.
The above Consolidated Statement of Changes in Equity should be read in conjunction with the accompanying notes.
NORTHERN STAR RESOURCES LIMITED ANNUAL REPORT 2021NORTHERN STAR RESOURCES LIMITED ANNUAL REPORT 2021 FInancIal RepoRt
FInancIal RepoRt
Consolidated Statement of Changes in Equity
Financial
assets at fair
value through
OCI
$M
Share
based
payments
reserve
$M
Foreign
currency
translation
reserve
$M
Cash flow
hedge
reserve
$M
Retained
earnings
$M
Total
equity
$M
Notes
Share capital
$M
Transactions with
owners in their
capacity as owners:
Issue of ordinary shares
as consideration for a
business combination,
net of transaction costs
and tax
Dividends provided for
or paid
Employee share and
option plans - value of
employee services
Exercise of employee
share awards
Share plan loan
repayment
Tax
Balance at 30 June
2021
12
5,104.6
11(b)
-
2.4
3.9
-
0.3
5,111.2
6,435.1
-
-
-
-
-
-
-
-
-
10.6
(3.9)
0.3
(0.5)
6.5
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
5,104.6
(310.5)
(310.5)
-
-
13.0
-
-
-
(310.5)
0.3
(0.2)
4,807.2
13.2
16.9
(15.6)
0.4
1,528.5
7,978.5
Nature and purpose of reserves:
136
Financial assets at FVOCI
The Group has elected to recognise changes in the fair value of certain investments in equity securities in OCI. These
changes are accumulated within the FVOCI reserve within equity as described at note Investments and other
financial assets The Group transfers amounts from this reserve to retained earnings when the relevant equity
securities are derecognised.
Share based payments
The share based payments reserve relates to shares, performance shares, performance rights and share options
granted by the Company to its employees. Further information about share based payments to employees is set out
in note 20.
The increase in share based payment reserve and expense for services rendered by employees during the period is
determined with reference to the grant date fair value of the applicable award. The tax benefit, where available, in
respect of those awards is made with reference to the share price at the time the underlying shares are acquired or
issued by the Group to satisfy those awards. Where the tax benefit available is in excess of the tax effect on the
cumulative charge to profit and loss, the remaining credit is determined to relate to the equity issue and is included
within the share based payment reserve. Amounts recorded in the share based payment reserve are reclassified to
contributed equity on vesting of the performance rights. During FY21 $0.3 million (FY20: $28.6 million) was transferred
from the share based payment reserve to contributed equity in relation to tax benefits on respective awards.
Foreign currency translation
Exchange differences arising on translation of the foreign controlled entities are recognised in other comprehensive
income and accumulated in a separate reserve within equity. The cumulative amount is reclassified to profit or loss
when the net investment is disposed of.
Cash flow hedge reserve
The cash flow hedge reserve is used to recognise the effective portion of gains or losses on derivatives that are
designated and qualify as cash flow hedges.
Consolidated Statement of Cash Flows
For the year ended 30 June 2021
Cash flows from operating activities
Receipts from customers (inclusive of GST)
Payments to suppliers and employees (inclusive of GST)
Payment for merger and acquisition related costs
Interest received
Interest paid
Income taxes paid
Net cash inflow from operating activities
Cash flows from investing activities
Payments for property, plant and equipment
Payments for exploration and evaluation
Payments for mine properties
Payments for investments
Payments for acquisition of business and associated assets, net of cash
acquired
Payments for asset acquisitions, net of cash acquired
Proceeds from sale of property, plant and equipment
Proceeds from sale of financial assets at fair value through other
comprehensive income
Lease receipt
Other
Net cash outflow from investing activities
Cash flows from financing activities
Proceeds from/(payments for) issues of shares and other equity securities
Proceeds from borrowings
Repayments of equipment financing and leases
Repayment of borrowings
Dividends paid to Company's shareholders
Net cash inflow/(outflow) from financing activities
Net increase in cash and cash equivalents
Cash and cash equivalents at the beginning of the financial period
Effects of exchange rate changes on cash and cash equivalents
Assets included in a disposal group classified as held for sale
Cash and cash equivalents at end of year
30 June
2021
$M
30 June
2020
$M
Notes
2,726.0
(1,421.6)
(72.6)
2.7
(16.8)
(140.9)
1,076.8
(196.3)
(145.5)
(351.3)
(0.9)
402.5
(11.9)
4.3
31.3
4.2
6.5
(257.1)
(2.2)
658.0
(80.9)
(983.0)
(310.5)
(718.6)
101.1
677.3
(3.3)
(3.2)
771.9
1,939.7
(1,176.1)
(6.7)
4.3
(9.4)
(41.3)
710.5
(96.7)
(76.4)
(189.6)
(2.6)
(1,137.9)
(177.7)
4.9
-
5.7
-
(1,670.3)
803.1
693.6
(63.2)
-
(48.7)
1,384.8
425.0
266.1
(13.8)
-
677.3
7(b)
12
11(b)
7(b)
137
The above Consolidated Statement of Changes in Equity should be read in conjunction with the accompanying notes.
The above Consolidated Statement of Cash Flows should be read in conjunction with the accompanying notes.
NORTHERN STAR RESOURCES LIMITED ANNUAL REPORT 2021NORTHERN STAR RESOURCES LIMITED ANNUAL REPORT 2021 FInancIal RepoRt
FInancIal RepoRt
Contents of the notes to the consolidated financial statements
1 Critical estimates and judgements
1
2
3
4
5
6
7
8
9
Critical estimates and judgements
Segment information
How numbers are calculated
Revenue
Significant changes in the current reporting period
Expenses
Income tax expense
Financial assets and financial liabilities
Non-financial assets and liabilities
Equity
Risk
10
11
Financial risk management
Capital management
Group structure
12
13
14
15
Business combination
Asset acquisition
Assets classified as held for sale
Interests in other entities
Further Details
16
17
18
19
20
21
22
23
24
25
Contingent liabilities
Commitments
Events occurring after the reporting period
Related party transactions
Share-based payments
Remuneration of auditors
Earnings per share
Deed of cross guarantee
Parent entity financial information
Summary of significant accounting policies
138
Page
139
139
143
143
144
144
147
148
153
164
165
165
169
170
170
176
176
177
179
179
179
179
179
180
183
184
185
186
188
(a) Critical accounting estimates and assumptions
(i) Determination of mineral resources and ore reserves
The Group reports its Mineral Resources and Ore Reserves in accordance with the Joint Ore Reserves Committee
(JORC) Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves - the JORC
Code. The information on Mineral Resources and Ore Reserves is prepared by Competent Persons as defined by the
JORC Code.
There are numerous uncertainties inherent in estimating Mineral Resources and Ore Reserves. Assumptions that are
valid at the time of estimation may change significantly when new information becomes available.
Changes in the forecast prices of commodities, exchange rates, production costs or recovery rates may change the
economic status of reserves and may, ultimately, result in the reserves being restated. Such changes may impact
asset carrying values, depreciation and amortisation rates, deferred development costs and provisions for
restoration.
Other critical accounting judgements, estimates and assumptions are discussed in the following notes:
Unit of production method of depreciation/amortisation
Exploration and evaluation expenditure
Business combination
Mine rehabilitation provision
Impairment of assets
Life of component ratio for stripping asset
Gold price forecast relating to hedgebook liability
note 8(d)
note 8(c)
note 12
note 8(g)
note 25(e)
note 8(d)
note 12(a)
2 Segment information
The Group's Executive Committee consisting of the Executive Chairman, Chief Executive Officer, Chief Financial
Officer, Chief Operating Officers and Chief Geological Officer examine the Group's performance and have
identified seven reportable segments relating to the operations of the business:
(a) Description of segments and principal activities
The Group's reportable operating segments are:
1. Pogo, Alaska USA - Mining and processing of gold
2. Kalgoorlie Operations, WA Australia - Mining and processing of gold
3. KCGM, WA Australia - Mining and processing of gold
4. Jundee, WA Australia - Mining and processing of gold
5. Thunderbox, WA Australia - Mining and processing of gold
6. Carosue Dam, WA Australia - Mining and processing of gold
7. Exploration - Exploration and evaluation of gold mineralisation
An operating segment is a component of the Group that engages in business activities from which it may earn
revenues or incur expenses. On 12 February 2021, the Company implemented the Scheme of Arrangement
(Scheme) in relation to the merger of the Company and Saracen Mineral Holdings Limited (Saracen). Refer to note
12 for further details. Following the completion of the transaction, and review by the Executive Committee, the
Group now has seven operating segments (Kalgoorlie Operations, Jundee, Pogo, KCGM, Thunderbox, Carosue Dam
and Exploration). As in the prior year, Kanowna Belle, East Kundana JV, Millennium and South Kalgoorlie is
considered as one and has been presented as one reporting segment (Kalgoorlie Operations). The Exploration
segment for the year ended 30 June 2021 includes Paulsens, Tanami and the Bronzewing project and, where related
exploration assets are transferred to mine properties from the exploration segment in the future, these will be
incorporated into the relevant operating segment.
Exploration comprises all projects in the exploration and evaluation phase of the Group. These include the Group's
regional prospects as well as ongoing exploration programmes at the Group’s respective sites.
An analysis of segment revenues is presented in note 3.
139
NORTHERN STAR RESOURCES LIMITED ANNUAL REPORT 2021NORTHERN STAR RESOURCES LIMITED ANNUAL REPORT 2021 FInancIal RepoRt
FInancIal RepoRt
Segment Information
Segment Information
(b) Segment results
The segment information for the year ended 30 June 2021 is as follows:
Kalgoorlie
Operations
$M
KCGM
$M
Carosue
Dam
$M
Pogo
$M
Jundee
$M
$M
Thunderbox
$M
Exploration
$M
Total
$M
(c) Segment EBITDA (continued)
Interest income, finance charges, interest expense and acquisition costs are not allocated to the operating
segments as this type of activity is driven by the corporate treasury function which manages the cash position of the
Group.
Segment EBITDA reconciles to profit before income tax for the year ended 30 June 2021 as follows:
2021
Segment net operating
profit (loss) before income
tax
Depreciation and
amortisation
Impairment
Finance costs
Fair value loss on
revaluation of financial
assets
Segment EBITDA
(393.7)
102.2
(19.6)
102.8
284.4
(8.2)
(142.3)
(74.4)
220.4
436.6
2.7
129.4
-
1.6
105.4
-
0.4
95.4
-
1.4
93.5
0.2
1.4
-
266.0
-
233.2
-
86.2
-
199.6
-
379.5
7.7
-
0.5
-
-
4.9
108.8
0.3
656.7
545.6
8.3
17.4
(10.9)
17.4
1,153.6
Total segment assets
5,397.0
216.2
1,454.7
592.0
278.5
1,365.0
762.1
10,065.5
Total segment liabilities
(523.6)
(150.5)
(151.5)
(179.9)
(139.2)
(148.6)
(63.5)
(1,356.8)
(9,862.3)
(1,389.4)
Pogo's revenue is generated from production activities located in the United States of America (USA). Its non-current
assets are also held in the USA. Total non-current assets for Pogo as at 30 June 2021 was $567.2 million (2020: $521.0
million). All other segments are Australian.
(5,139.4)
(1,216.4)
(687.7)
(298.9)
(518.8)
(611.7)
140
The Kalgoorlie Operations segment includes East Kundana JV and Millennium operations which are included in a
disposal group classified as non-current assets held for sale as at 30 June 2021. Total net assets classified as held for
sale in relation to these operations was $139.0 million. Refer to note 14 for further details.
The segment information for the year ended 30 June 2020 is as follows:
2020
KCGM
(50%)
$M
Kalgoorlie
Operations
$M
Pogo
$M
Jundee Exploration
$M
$M
Total
$M
Segment net operating profit (loss) before
income tax
Depreciation and amortisation
Impairment
Finance costs
Segment EBITDA
36.8
29.9
-
1.2
67.9
157.4
132.4
-
2.6
292.4
10.9
73.5
-
2.7
87.1
297.5
112.0
-
2.2
411.7
(40.2)
3.3
28.3
0.5
(8.1)
462.4
351.1
28.3
9.2
850.9
Total segment assets
1,363.3
346.8
574.2
222.8
497.9
3,005.0
Total segment liabilities
(227.6)
(188.9)
(166.2)
(132.2)
(46.5)
(761.4)
(1,203.6)
(450.3)
(495.1)
(502.3)
(443.3)
(3,094.6)
(c) Segment EBITDA
Segment EBITDA is a non-IFRS measure, being earnings before interest, tax, depreciation and amortisation and is
calculated as follows: profit before income tax plus depreciation, amortisation, impairment and finance costs, less
interest income.
Segment EBITDA
Other income and expense
Finance costs
Depreciation
Amortisation
Unwind of hedgebook contract liability
Corporate and technical services
Acquisition costs
Share based payments
Impairment of assets
Gain on revaluation of existing interest in KCGM
Profit before income tax
(d) Segment assets
30 June
2021
$M
1,153.6
(7.8)
(28.4)
(209.8)
(450.3)
59.9
(62.2)
(231.8)
(13.0)
(545.6)
1,919.3
1,583.9
30 June
2020
$M
850.9
(3.0)
(21.9)
(130.6)
(224.2)
-
(90.3)
-
(8.0)
(28.3)
-
344.6
Segment assets are measured in the same way as in the financial statements. These assets are allocated based on
the operations of the segment and the physical location of the asset.
Reportable segments' assets are reconciled to total assets as follows:
Segment assets
Unallocated:
Financial assets at fair value through OCI
Asset classified as held for sale
Available-for-sale financial assets
Investment in equity accounted associates
Cash and cash equivalents
Derivative financial instruments
Trade and other receivables
Current tax asset
Property, plant and equipment
Total assets as per the Consolidated Statement of Financial Position
141
30 June
2021
$M
30 June
2020
$M
10,065.5
3,005.0
-
204.3
23.2
-
718.3
0.5
73.0
155.9
8.6
11,249.3
13.4
17.4
-
8.0
643.1
0.8
114.3
-
9.5
3,811.5
Investments in equity securities (classified as financial assets at fair value through OCI) and in associates held by the
Group are not considered to be segment assets as they are managed by the corporate treasury function.
(e) Segment liabilities
Reportable segments' liabilities are reconciled to total liabilities as follows:
NORTHERN STAR RESOURCES LIMITED ANNUAL REPORT 2021NORTHERN STAR RESOURCES LIMITED ANNUAL REPORT 2021 FInancIal RepoRt
FInancIal RepoRt
(e) Segment liabilities (continued)
Segment Information
How numbers are calculated
Segment liabilities
Unallocated:
Trade and other payables
Borrowings
Provisions
Current tax liabilities
Provisions - other
Deferred tax (net)
Derivative financial instruments
Liabilities attributable to assets held for sale
Total liabilities as per the Consolidated Statement of Financial Position
30 June
2021
$M
30 June
2020
$M
(1,356.8)
(761.4)
(15.4)
(659.2)
(11.2)
-
(232.5)
(925.3)
(5.1)
(65.3)
(3,270.8)
(4.0)
(699.1)
(59.6)
(12.0)
-
(131.6)
-
-
(1,667.7)
142
This section provides additional information about those individual line items in the financial statements that the
Directors consider most relevant in the context of the operations of the entity, including:
(a) accounting policies that are relevant for an understanding of the items recognised in the financial statements.
These cover situations where the accounting standards either allow a choice or do not deal with a particular
type of transaction
(b) analysis and subtotals, including segment information
(c)
information about estimates and judgements made in relation to particular items.
3 Revenue
Accounting Policy
(i) Sale of goods
The Group primarily generates revenue from the sale of gold and silver bullion. The Group delivers dore bars to
refiners, who convert the product into investment grade bullion for a fee, which is subsequently sold either to the
refinery or third parties (financial institutions).
Revenue from the sale of these goods is recognised when control over the inventory has transferred to the customer.
Control is generally considered to have passed when:
• physical possession and inventory risk is transferred (including via a third-party transport provider arranged by the
refinery):
• payment terms for the sale of goods can be clearly identified through the sale of metal credits received or
receivable for the transfer of control of the asset;
• the Group can determine with sufficient accuracy the metal content of the goods delivered; and
• the refiner has no practical ability to reject the product where it is within contractually specified limits.
Where the economic inflows arise from other by-products, for example from the presence of other valuable metals,
these amounts are credited to the costs of producing the primary products to the extent the amounts generated
are not considered significant.
143
(ii) Sale of services
Tolling revenue is recognised as the tolling services are performed. The number of units processed is considered to
be the most direct measurement of value delivered to the customer under the contractual arrangements and
therefore tolling revenue is earned per tonne of ore processed.
The Group derives the following types of revenue:
Sale of gold
Sale of silver
Toll treatment
Total revenue
30 June
2021
$M
2,749.3
8.2
3.0
2,760.5
30 June
2020
$M
1,957.6
3.2
10.9
1,971.7
Sale of gold includes an amount of $59.9 million in relation to hedge book liability unwind, which has not been
allocated to segments.
(a) Segment revenue
The total of revenue, broken down by operating segment, is shown in the following table. All revenue is from external
customers. No revenues are generated by the Exploration operating segment.
KCGM*
$M
731.0
235.8
Pogo
$M
474.7
388.2
2021
2020
Kalgoorlie
Operations
$M
590.2
704.2
Jundee
$M
660.1
643.5
Carosue Dam Thunderbox
$M
202.5
-
$M
42.2
-
Total
$M
2,700.7
1,971.7
NORTHERN STAR RESOURCES LIMITED ANNUAL REPORT 2021NORTHERN STAR RESOURCES LIMITED ANNUAL REPORT 2021 FInancIal RepoRt
FInancIal RepoRt
(a) Segment revenue (continued)
(b) Corporate, technical services and projects
Revenue
* KCGM 50 percent interest from 3 Jan 2020 to 12 Feb 2021 at which point the Group obtained 100 percent control
as part of the merger with Saracen Mineral Holdings Limited. Refer to note 12 for further details.
4 Significant changes in the current reporting period
The financial position and performance of the Group was particularly affected by the following events and
transactions during the reporting period:
•
Implementation of the scheme of arrangement (Scheme) in relation to the merger of Northern Star and
Saracen Mineral Holdings Limited (Saracen). For details of the acquisition refer to note 12 of the financial
statements.
For a detailed discussion about the Group’s performance and financial position please refer to our operating and
financial review on pages 16 to 31.
5 Expenses
(a) Cost of sales
Mining
Processing
Site services
Employee benefit expenses
Depreciation
Amortisation
Government and other royalty expense
Change in inventories
144
30 June
2021
$M
480.8
392.0
75.2
405.5
202.8
449.0
62.5
115.9
2,183.7
30 June
2020
$M
395.9
276.8
50.7
305.9
124.9
222.9
41.9
28.6
1,447.6
Depreciation/amortisation method
Items of property, plant and equipment and mine properties are depreciated/amortised over their useful lives. The
Group uses the unit-of-production basis when depreciating/amortising mine specific assets which results in a
depreciation/amortisation charge proportional to the depletion of the anticipated remaining life of mine which is
referenced to the estimated economic reserve and resources of the property to which the assets relate. Each item’s
economic life, which is assessed annually has due regard to both its physical life limitations and to present
assessments of economically recoverable reserves and resources of the mine property at which it is located.
Depreciation of non-mine specific property, plant and equipment is calculated using the straight-line method to
allocate their cost or revalued amounts, net of their residual values, over their estimated useful lives or, in the case of
leasehold improvements and certain leased plant and equipment, the shorter lease term as follows:
Land and buildings
Plant and equipment
•
•
• Motor Vehicles
• Office equipment
5 - 20 years
2 - 20 years
4 - 10 years
2 - 10 years
Depreciation methods, useful lives and residual values are reviewed at each reporting date.
Royalties
Royalties under existing royalty regimes in Australia are payable on lodgement with the refining counterparty and
are recognised as the sale occurs. Production Royalties in Alaska are based on taxable profit and are consequently
treated as an income tax.
Expenses
30 June
2021
$M
30 June
2020
$M
35.6
6.9
35.8
13.0
1.3
6.0
98.6
32.8
5.8
25.6
7.9
1.3
7.9
81.3
Administration and technical services
Depreciation
Employee benefit expenses
Share based payments
Amortisation
Exploration projects
Accounting policy
Share-based compensation benefits are provided to employees via Option, Share and Performance Rights Plans as
discussed in note 20.
The fair value of shares and options granted under these Plans are recognised as a share based payments expense
with a corresponding increase in equity. The total amount to be expensed is determined by reference to the fair
value of the shares or options granted, which includes any market performance conditions and the impact of any
non-vesting conditions, but excludes the impact of any service and non-market performance vesting conditions.
Non-market vesting conditions are included in assumptions about the number of shares and options that are
expected to vest. The total expense is recognised over the vesting period, which is the period over which all of the
specified vesting conditions are to be satisfied. At the end of each period, the entity revises its estimates of the
number of shares and options that are expected to vest based on the non-market vesting conditions. It recognises
the impact of the revision to original estimates, if any, in profit or loss with a corresponding adjustment to equity.
(c) Impairment of assets
Exploration and evaluation assets (note 8(c))
Inventory
Property, plant and equipment
145
30 June
2021
$M
101.3
436.6
7.7
545.6
30 June
2020
$M
28.3
-
-
28.3
Inventory writedown - KCGM mineralised waste
As part of the accounting for the Merger with Saracen Minerals Holding Limited during the year, the Group obtained
control of KCGM. As outlined in note 12, this required the Group to identify and measure the assets acquired at fair
value, including the remeasurement of the Group’s existing 50 percent interest in the KCGM Joint Operations. The
stockpile reserves of KCGM at acquisition included 105 million tonnes of mineralised waste grading 0.68gpt
containing an estimated 2.3 million ounces of gold. These proved reserves were considered to have fair value to a
willing buyer and have the potential to produce economic benefits through the potential to be processed and
recover saleable gold. The initial fair value at acquisition date was determined with reference to an estimate of the
stockpiles’ highest and best use and the most advantageous market from the perspective of market participants at
the time of the acquisition (given the absence of a principal market for low grading stockpile reserves). The initial fair
value ascribed to these stockpiles was $436 million.
Subsequent to acquisition, the Group measures inventory at the lower of cost and net realisable value. Net
realisable value is an entity specific value, whereas fair value is not entity specific, and these amounts may not
equal.
The Group’s post-merger strategy includes substantial investment in and development of the KCGM assets that
improve expectations that new higher-grade material will be added to mine plans in future periods, alternate ore
sources will become available over time and alternate regional processing strategies may be pursued that increase
uncertainty surrounding whether and/or when mineralised waste may be processed. Accordingly, the Group has
considered it appropriate to write this inventory down to nil at 30 June 2021.
NORTHERN STAR RESOURCES LIMITED ANNUAL REPORT 2021NORTHERN STAR RESOURCES LIMITED ANNUAL REPORT 2021 FInancIal RepoRt
FInancIal RepoRt
(c) Impairment of assets (continued)
(a) Income tax expense (continued)
Expenses
This assessment involves judgement, including, but not limited to: expectations surrounding whether and/or when
these stockpiles will be processed; the gold price environment in the future, which in turn may impact the
economics of processing low grade material; the identification of new resources and conversion of resources to
reserves and the development of KCGMs and other regional mine plans over time; changes in regional processing
strategies over time, including any changes in available processing capacity. Future changes in circumstances
surrounding whether and/or when this mineralised waste will be processed would need to be considered for reversal
of impairment at any such time.
(d) Finance costs
Interest expense
Provisions: unwinding of discount (note 8(g))
Finance charges
30 June
2021
$M
30 June
2020
$M
19.8
4.2
4.4
28.4
13.1
4.7
4.1
21.9
Provision - unwinding of discount
The Group records the present value of the estimated cost of legal and constructive obligations to rehabilitate
operating locations and decommission assets in the period in which the obligation is incurred. The unwinding of the
effect of discounting the provision is recorded as a finance charge in profit or loss.
6
Income tax expense
146
The income tax expense for the period is the tax payable on the current period’s taxable income based on the
applicable income tax rate adjusted by changes in deferred tax assets and liabilities attributable to temporary
differences and to unused tax losses.
The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the
end of the reporting period in the countries where the Company’s subsidiaries operate and generate taxable
income. Management periodically evaluates positions taken in tax returns with respect to situations in which
applicable tax regulation is subject to interpretation. It establishes provisions where appropriate on the basis of
amounts expected to be paid to the tax authorities.
Deferred income tax is provided in full, using the liability method, on temporary differences arising between the tax
bases of assets and liabilities and their carrying amounts in the consolidated financial statements. Deferred income
tax is not accounted for if it arises from initial recognition of an asset or liability in a transaction other than a business
combination that at the time of the transaction affects neither accounting nor taxable profit or loss.
Current and deferred tax is recognised in profit or loss, except to the extent that it relates to items recognised in
other comprehensive income or directly in equity. In this case, the tax is also recognised in other comprehensive
income or directly in equity, respectively.
This note provides an analysis of the Group’s income tax expense, showing what amounts are recognised directly in
equity and how the tax expense is affected by non-assessable and non-deductible items. It explains significant
estimates made in relation to the Group's tax position.
Current tax
Current tax on profits for the year
Other
Adjustments for current tax of prior periods
Total current tax
Deferred income tax
Decrease/(increase) in deferred tax assets (note 8(e))
Increase in deferred tax liabilities (note 8(e))
Total deferred tax expense/(benefit)
Income tax expense
(b) Numerical reconciliation of income tax expense to prima facie tax payable
Profit from continuing operations before income tax expense
Tax at the Australian tax rate of 30.0% (2020 - 30.0%)
Tax effect of amounts which are not deductible (taxable)
in calculating taxable income:
Sale of investments
Franking credit gross up
Stamp duty and transaction costs on Saracen merger
Recognition of deferred tax assets on acquired tax losses
Adjustment for current tax of prior periods
Non-deductible amounts
Derecognition of deferred tax assets on investments accounted for using the
equity method
Subtotal
Difference in overseas tax rates
Income tax expense
Income tax expense
30 June
2021
$M
30 June
2020
$M
6.1
2.0
3.2
11.3
(87.5)
627.6
540.1
551.4
30 June
2021
$M
1,583.9
475.2
2.2
(0.1)
69.5
-
3.2
2.3
-
552.3
(0.9)
551.4
58.8
-
0.5
59.3
(1.0)
28.0
27.0
86.3
30 June
2020
$M
344.6
103.4
-
-
-
(21.5)
0.5
3.7
1.4
87.5
(1.2)
86.3
147
The tax rate for Australian Operations remains at 30%. The blended tax rate for Alaskan operations is 35.4%. The
Alaskan operations are subject to the following taxes: Federal (21%) and State Income Taxes (9.4%), Alaska Mining
Licence Tax (7%) and Alaska Production Royalty Tax (3%). The blended rate for Alaskan operations is not the sum of
the aforementioned rates due to the inter-relationship of deductibility of these taxes in determining taxable income
upon which the tax rates are levied.
(2,135.3)
(430.9)
NORTHERN STAR RESOURCES LIMITED ANNUAL REPORT 2021NORTHERN STAR RESOURCES LIMITED ANNUAL REPORT 2021 FInancIal RepoRt
FInancIal RepoRt
(c) Amounts recognised directly in equity
Income tax expense
30 June
2021
$M
30 June
2020
$M
Aggregate current and deferred tax arising in the reporting year
and not recognised in net profit or loss or other comprehensive
income but directly debited or credited to equity:
Deferred tax: Assets available for sale
Deferred tax: financial assets at fair value through OCI
Deferred tax: cost of share issue
Deferred tax: share based payments
8(e)
8(e)
8(e)
-
0.1
1.4
1.0
2.5
(2.1)
-
(5.0)
(5.9)
(13.0)
7
Financial assets and financial liabilities
This note provides information about the Group's financial instruments, including:
•
•
•
•
an overview of all financial instruments held by the Group
specific information about each type of financial instrument
accounting policies
information about determining the fair value of the instruments, including judgements and estimation
uncertainty involved.
The Group holds the following financial instruments:
148
Assets at FVOCI
$M
Assets at FVPL
$M
Notes
Financial assets
at amortised
cost
$M
Financial assets
2021
Cash and cash equivalents
Trade and other receivables*
Derivative financial instruments
Financial assets at fair value through other
comprehensive income
2020
Cash and cash equivalents
Trade and other receivables*
Derivative financial instruments
Financial assets at fair value through other
comprehensive income
7(b)
7(a)
7(b)
7(a)
* Excluding prepayments and goods and services tax recoverable.
-
-
-
23.2
23.2
-
-
-
13.3
13.3
-
-
0.5
-
0.5
-
-
0.8
-
0.8
771.9
42.1
-
-
814.0
677.3
89.3
-
-
766.6
Liabilities at
amortised cost
$M
Notes
Total
$M
771.9
42.1
0.5
23.2
837.7
677.3
89.3
0.8
13.3
780.7
Total
$M
2020
Trade and other payables**
Borrowings
** Excluding payroll tax and other statutory liabilities.
Financial assets and financial liabilities
Liabilities at
amortised cost
$M
7(d)
7(c)
150.1
811.1
961.2
Total
$M
150.1
811.1
961.2
The Group’s exposure to various risks associated with the financial instruments is discussed in note 10. The maximum
exposure to credit risk at the end of the reporting period is the carrying amount of each class of financial assets
mentioned above.
(a) Trade and other receivables
Accounting policy
Trade receivables are recognised initially at fair value and subsequently measured at amortised cost using the
effective interest method, less provision for impairment.
Trade receivables
Sundry debtors
Goods and services tax recoverable
Prepayments*
Net finance lease receivables
30 June
2021
Non-
current
$M
30 June
2020
Non-
current
$M
Total
$M
Current
$M
-
-
-
0.9
-
0.9
25.3
16.8
25.3
55.5
-
122.9
72.5
9.2
9.1
49.2
4.5
144.5
-
-
-
1.2
3.1
4.3
Current
$M
25.3
16.8
25.3
54.6
-
122.0
Total
$M
72.5
9.2
9.1
50.4
7.6
148.8
149
*Included within the current prepayments balance is a US$22.5 million payment made to Newmont as part of the 50
percent acquisition of KCGM. Refer to note 12 for further details of the acquisition. The payment was for a
conditionally refundable option to acquire the Newmont power business which supplies power to KCGM. As a result
of further discussions with Newmont, the Company allowed the option to lapse during the June 2020 quarter,
however the amount remains conditionally refundable. This amount is still expected to be recovered within the next
12 months through conditions being met.
(i) Classification as trade and other receivables
If collection of the amounts is expected in one year or less they are classified as current assets. If not, they are
presented as non-current assets. Trade receivables are generally due for settlement within 30 days and therefore are
all classified as current.
(ii)
Fair value of trade and other receivables
As the majority of receivables are short term in nature, their carrying amount is assumed to be the same as their fair
value.
(b) Cash and cash equivalents
Accounting policy
Cash and cash equivalents includes cash on hand, deposits held at call with financial institutions, other short-term,
highly liquid investments with original maturities of three months or less that are readily convertible to known amounts
of cash and which are subject to an insignificant risk of changes in value.
30 June
2021
$M
771.9
-
771.9
30 June
2020
$M
675.5
1.8
677.3
Financial liabilities
2021
Trade and other payables**
Borrowings
7(d)
7(c)
289.0
888.1
1,177.1
289.0
888.1
1,177.1
Cash at bank and in hand
Restricted cash
NORTHERN STAR RESOURCES LIMITED ANNUAL REPORT 2021NORTHERN STAR RESOURCES LIMITED ANNUAL REPORT 2021 FInancIal RepoRt
FInancIal RepoRt
Financial assets and financial liabilities
Financial assets and financial liabilities
(b) Cash and cash equivalents (continued)
(i) Reconciliation to the statement of cash flows
Reconciliation of profit after tax to net cash flow from operating activities:
Profit for the year
Adjustment for
Depreciation and amortisation
Fair value adjustment to financial assets
Non-cash employee benefits expense - share-based payments
Rehabilitation provision - unwinding of discount
Net (gain)/ loss on sale of non-current assets
Upfront debt transaction costs written off
Impairment of assets during the period
Unwind of hedgebook contract liability
Share of losses of associates and joint ventures
Amortisation of upfront debt transaction costs
Gain on remeasurement of existing interest in KCGM
Change in operating assets and liabilities:
Increase in trade and other receivables
(Increase)/decrease in inventories
(Decrease)/increase in trade and other payables
Increase in interest expense accrual
Increase/(decrease) in income taxes payable
(Decrease)/increase in deferred tax liabilities
Increase in provisions
Net cash inflow from operating activities
150
(c) Borrowings
30 June
2021
$M
1,032.5
660.0
16.0
13.0
4.2
2.9
-
545.6
(59.9)
1.5
5.2
(1,919.3)
37.4
126.8
201.9
-
(95.4)
544.7
(40.3)
1,076.8
30 June
2020
$M
258.3
354.8
-
7.9
4.7
4.2
1.3
28.3
0.5
3.6
1.2
-
(24.1)
23.1
(40.2)
2.5
-
45.1
39.3
710.5
Accounting policy
Borrowings are initially recognised at fair value, net of transaction costs incurred. Borrowings are subsequently
measured at amortised cost.
Borrowings are classified as current liabilities unless the Group has an unconditional right to defer settlement of the
liability for at least 12 months after the reporting date or there is an expectation the Group will repay amounts within
the following 12 months. As at 30 June 2021, the entirety of the $658 million (net of capitalised borrowing costs)
drawn on the revolving credit facility is classified within non-current bank loans as it is not expected that this amount
will be repaid within 12 months ($500 million contractually repayable in June 2024 and the remainder in June 2025).
As at the end of the prior year, the Group had classified $200 million of the fully drawn $300 million revolving credit
facility within current bank loans as it was expected that this amount would be repaid within the following 12 months
(contractually repayable on 31 December 2022). It was subsequently repaid on 6 July 2020. The remaining $100
million drawn on the revolving credit facility was repaid on 30 November 2020 and a $25 million term debt
repayment was made in December 2020.
30 June
2021
Non-
current
$M
30 June
2020
Non-
current
$M
Total
$M
Current
$M
658.0
91.8
51.8
801.6
658.3
141.9
87.9
888.1
302.5
21.0
37.8
361.3
394.8
28.6
26.4
449.8
Current
$M
0.3
50.1
36.1
86.5
Total
$M
697.3
49.6
64.2
811.1
Bank loans
Lease liabilities
Secured asset financing
Total secured borrowings
(c) Borrowings (continued)
Liabilities from financing activities reconciliation
Borrowings
Lease Liability
Opening liabilities from financing activities
Cash flows
New leases
Liabilities from financing activities at 30 June 2020
Opening liabilities from financing activities
Cash flows
New leases
Non-current assets/liabilities held for sale
Liabilities from financing activities at 30 June 2021
(i)
Secured liabilities and assets pledged as security
30 June
2021
$M
30 June
2020
$M
(658.3)
(229.8)
(888.1)
Leases
$M
(48.4)
63.2
(128.6)
(113.8)
(113.8)
(80.9)
(53.1)
18.0
(229.8)
(697.3)
(113.8)
(811.1)
Total
$M
(48.4)
(634.1)
(128.6)
(811.1)
(811.1)
(41.9)
(53.1)
18.0
(888.1)
Borrowings
$M
-
(697.3)
-
(697.3)
(697.3)
39.0
-
-
(658.3)
Secured asset financing amounts are interest-bearing borrowings secured over Group owned plant and equipment.
These liabilities are secured by assets classified as property, plant and equipment with a written down value of $69.0
million.
151
(ii)
Leases
As at 30 June 2021, the Group leased various assets under leases expiring within three to seven years. The interest
rates are fixed and payable over a period of the lease term from the inception of the lease. These leases are
effectively secured as the rights to the leased assets recognised in the financial statements revert to the lessor
in the event of default.
(iii) Fair value
For the majority of the borrowings, the fair values are not materially different to their carrying amounts, since the
interest payable on those borrowings is either close to current market rates or the borrowings are of a short-term
nature. Refer above for differences as at year end.
(iv) Financing arrangements
As at the end of the report period, the Group had:
•
•
•
Revolving credit facility limit of $1 billion which is drawn to $662 million ($658 million net of capitalised finance
costs) at 30 June 2021;
$20 million contingent instrument facilities, drawn down by $8.8 million; and
US$77 million contingent instrument facilities, drawn down by US$73.1 million.
As at the end of the prior report period, the Group had:
•
•
•
•
•
•
$400.0 million term loan, fully drawn;
$300.0 million revolving credit facility, fully drawn;
$7.0 million bank guarantee facility drawn down by $3.0 million;
$5.0 million bank guarantee facility drawn down by $4.5 million;
US$72.0 million bank guarantee and stand by letter of credit facility drawn down by US$71.9 million;
and
US$3.0 million bank guarantee and stand by letter of facility drawn down by US$1.5 million.
NORTHERN STAR RESOURCES LIMITED ANNUAL REPORT 2021NORTHERN STAR RESOURCES LIMITED ANNUAL REPORT 2021 FInancIal RepoRt
FInancIal RepoRt
(d) Trade and other payables
(a) Property, plant and equipment (continued)
Financial assets and financial liabilities
Non-financial assets and liabilities
Accounting policy
These amounts represent liabilities for goods and services provided to the Group prior to the end of financial year
which are unpaid. The amounts are unsecured and are usually paid within 60 days of recognition. Trade and other
payables are presented as current liabilities unless payment is not due within 12 months from the reporting date.
They are recognised initially at their fair value and subsequently measured at amortised cost using the effective
interest method.
Trade payables
Accruals
Payroll tax and other statutory liabilities
Other payables
30 June
2021
$M
30 June
2020
$M
37.8
192.5
7.5
58.7
296.5
47.0
86.8
5.5
16.3
155.6
The carrying amounts of trade and other payables are considered to be the same as their fair values, due to their
short-term nature.
8 Non-financial assets and liabilities
This note provides information about the Group's non-financial assets and liabilities, including:
•
specific information about the following non-financial assets and non-financial liabilities
•
•
property, plant and equipment
exploration and evaluation assets
152
• mine properties assets
•
•
•
tax balances
inventories
provisions
accounting policies
information about determining the fair value of the assets and liabilities, including judgements and
estimation uncertainty involved.
•
•
(a) Property, plant and equipment
Accounting policy
Property, plant and equipment is carried at historical cost less accumulated depreciation and impairment losses.
Refer to note 25 for further information on accounting policies associated with impairment. Historical cost includes
expenditure that is directly attributable to the acquisition of the items.
Subsequent costs are included in the asset's carrying amount or recognised as a separate asset, as appropriate,
only when it is probable that future economic benefits associated with the item will flow to the Group and the cost
of the item can be measured reliably. The carrying amount of any component accounted for as a separate asset is
derecognised when replaced. All other repairs and maintenance are charged to profit or loss during the reporting
period in which they are incurred.
At 30 June 2020
Cost or fair value
Accumulated
depreciation
Net book amount
Year ended 30
June 2020
Opening net book
amount
Additions
Acquired as part
of asset acquisition
Exchange
differences
Acquired as part
of business
combination (note
12)
Disposals
Transfers
Depreciation
charge
Closing net book
amount
At 30 June 2021
Cost or fair value
Accumulated
depreciation
Net book amount
Year ended 30
June 2021
Opening net book
amount
Additions
Exchange
differences
Acquired as part
of business
combination (note
12)
Disposals
Gain on
revaluation of
existing interest in
KCGM (note 12)
Transfers
Assets included in
a disposal group
classified as held
for sale (note 14)
Land &
buildings
$M
Plant &
equipment
$M
Motor
Vehicles
$M
Office
equipment
$M
Capital work in
progress
$M
70.1
(16.4)
53.7
919.4
(252.8)
666.6
42.0
-
3.6
0.7
8.5
-
4.1
(5.2)
53.7
419.9
-
14.9
6.1
182.0
(8.9)
144.5
(91.9)
666.6
17.1
(9.1)
8.0
5.6
-
0.2
-
1.0
(0.3)
4.7
(3.2)
8.0
12.8
(6.3)
6.5
6.2
-
0.3
0.1
0.8
-
1.2
(2.1)
6.5
Total
$M
1,074.0
(284.6)
789.4
501.0
138.5
20.5
6.8
234.2
(9.2)
-
54.6
-
54.6
27.3
138.5
1.5
(0.1)
41.9
-
(154.5)
-
(102.4)
54.6
789.4
153
Land &
buildings
$M
Plant &
equipment
$M
Motor
Vehicles
$M
Office
equipment
$M
Capital work in
progress
$M
130.8
(23.1)
107.7
1,589.0
(318.1)
1,270.9
53.7
-
(2.7)
47.9
-
7.7
11.8
666.6
1.8
(25.4)
465.7
(7.0)
86.9
263.4
24.0
(9.8)
14.2
8.0
-
(0.2)
4.9
(0.4)
1.0
6.2
24.1
(8.2)
15.9
6.5
-
(0.3)
8.0
(0.1)
1.6
3.8
136.2
-
136.2
54.6
264.6
(2.6)
106.1
-
1.5
(285.2)
Total
$M
1,904.1
(359.2)
1,544.9
789.4
266.4
(31.2)
632.6
(7.5)
98.7
-
(1.0)
(24.7)
(1.2)
(0.3)
(2.8)
(30.0)
NORTHERN STAR RESOURCES LIMITED ANNUAL REPORT 2021NORTHERN STAR RESOURCES LIMITED ANNUAL REPORT 2021 FInancIal RepoRt
FInancIal RepoRt
(a) Property, plant and equipment (continued)
(b) Right-of-use assets (continued)
Non-financial assets and liabilities
Non-financial assets and liabilities
Land &
buildings
$M
Plant &
equipment
$M
Motor
Vehicles
$M
Office
equipment
$M
Capital work in
progress
$M
Total
$M
The right-of-use assets comprise the initial measurement of the corresponding lease liability, lease payments made at
or before the commencement day, less any lease incentives received and any initial direct costs. They are
subsequently measured at cost less accumulated depreciation and impairment losses.
Whenever the Group incurs an obligation for costs to dismantle and remove a leased asset, restore the site on which
it is located or restore the underlying asset to the condition required by the terms and conditions of the lease, a
provision is recognised and measured under AASB 137. To the extent that the costs relate to a right-of-use asset, the
costs are included in the related right-of-use asset, unless those costs are incurred to produce inventories.
Right-of-use assets are depreciated over the shorter period of lease term and useful life of the underlying asset. If a
lease transfers ownership of the underlying asset or the cost of the right-of-use asset reflects that the Group expects
to exercise a purchase option, the related right-of-use asset is depreciated over the useful life of the underlying
asset. The depreciation starts at the commencement date of the lease.
The Group applies AASB 136 to determine whether a right-of-use asset is impaired and accounts for any identified
impairment loss as described in the ‘Property, Plant and Equipment’ policy (as outlined in the financial report for the
annual reporting period).
Variable rents that do not depend on an index or rate are not included in the measurement the lease liability and
the right-of-use asset. The related payments are recognised as an expense in the period in which the event or
condition that triggers those payments occurs and are included in profit or loss.
As a practical expedient, AASB 16 permits a lessee not to separate non-lease components, and instead account for
any lease and associated non-lease components as a single arrangement. The Group has not used this practical
expedient. For a contracts that contain a lease component and one or more additional lease or non-lease
components, the Group allocates the consideration in the contract to each lease component on the basis of the
relative stand-alone price of the lease component and the aggregate stand-alone price of the non-lease
components.
Lease assets - amounts recognised in the Consolidated Statement of Financial Position
The Consolidated Statement of Financial Position shows the following amounts relating to right-of-use assets:
155
Right-of-use assets
Opening balance
Adjustment for change in accounting policy
Acquired as part of business combination (note 12)
Gain on revaluation of existing interest in KCGM (note 12)
Additions to right-of-use assets
Depreciation
Closing balance
30 June 2021
$M
44.9
-
103.9
1.2
29.0
(40.5)
138.5
30 June 2020
$M
-
53.6
14.6
-
4.8
(28.1)
44.9
Depreciation
charge
Impairment loss
Closing net book
amount
(b) Right-of-use assets
Accounting policy
(9.2)
(0.5)
107.7
(149.3)
(7.1)
1,270.9
(4.1)
-
14.2
(3.2)
(0.1)
15.9
-
-
(165.8)
(7.7)
136.2
1,544.9
AASB 16 eliminates the distinction between operating and finance leases and brings all leases (other than short term
and low value leases) on to the balance sheet. As a lessee, the Group recognises a right-of-use asset representing its
right to use the underlying asset and a lease liability representing its obligation to make lease payments.
An assessment is made, at inception or when contract terms are changed, to determine whether the contract is, or
contains, a lease. A contract is or contains a lease if the contract conveys a right to control the use of an identified
asset for a period of time in exchange for consideration.
The Group assesses whether a contract is or contains a lease, at inception of the contract. The Group recognises a
right-of-use asset and a corresponding lease liability with respect to all lease arrangements in which it is the lessee,
except for short-term leases (defined as leases with a lease term of 12 months or less) and leases of low value assets.
For these leases, the Group recognises the lease payments as an operating expense on a straight-line basis over the
term of the lease unless another systematic basis is more representative of the time pattern in which economic
benefits from the leased assets are consumed.
154
The lease liability is initially measured at the present value of the lease payments that are not paid at the
commencement date, discounted by using the rate implicit in the lease. If this rate cannot be readily determined,
the Group uses its incremental borrowing rate.
Assets and liabilities arising from a lease are initially measured on a present value basis. Lease liabilities include the
net present value of the following lease payments:
• fixed payments (including in-substance fixed payments), less any lease incentives receivable
• variable lease payment that are based on an index or a rate
• amounts expected to be payable by the lessee under residual value guarantees
• the exercise price of a purchase option if the lessee is reasonably certain to exercise that option, and
• payments of penalties for terminating the lease, if the lease term reflects the lessee exercising that option.
The lease liability is subsequently measured by increasing the carrying amount to reflect interest on the lease liability
(using the effective interest method) and by reducing the carrying amount to reflect the lease payments made.
The Group remeasures the lease liability (and makes a corresponding adjustment to the related right-of-use asset)
whenever:
• The lease term has changed or there is a significant event or change in circumstances resulting in a change in the
assessment of exercise of a purchase option, in which case the lease liability is remeasured by discounting the
revised lease payments using a revised discount rate.
• The lease payments change due to changes in an index or rate or a change in expected payment under a
guaranteed residual value, in which case the lease liability is remeasured by discounting the revised lease payments
using an unchanged discount rate (unless the lease payments change is due to a change in a floating interest rate,
in which case a revised discount rate is used).
• A lease contract is modified and the lease modification is not accounted for as a separate lease, in which case
the lease liability is remeasured based on the lease term of the modified lease by discounting the revised lease
payments using a revised discount rate at the effective date of the modification.
NORTHERN STAR RESOURCES LIMITED ANNUAL REPORT 2021NORTHERN STAR RESOURCES LIMITED ANNUAL REPORT 2021 FInancIal RepoRt
FInancIal RepoRt
Non-financial assets and liabilities
Non-financial assets and liabilities
(c) Exploration and evaluation assets
Accounting policy
Exploration and evaluation assets include the costs of acquiring licences, costs associated with exploration and
evaluation activity, and the fair value (at acquisition date) of exploration and evaluation assets acquired in a
business combination. Exploration and evaluation expenditure is capitalised on an area of interest basis. Costs
incurred before the Group has obtained the legal rights to explore an area are recognised in the statement of profit
or loss and other comprehensive income.
Exploration and evaluation assets are only recognised if the rights of the area of interest are current and either, the
expenditures are expected to be recouped through successful development and exploitation of the area of interest
or activities in the area of interest have not at the reporting date; reached a stage which permits a reasonable
assessment of the existence or otherwise of economically recoverable reserves and active and significant
operations in, or in relation to, the area of interest are continuing.
Once a development decision has been made, all past exploration and evaluation expenditure in respect of an
area of interest that has been capitalised is transferred to mine properties where it is amortised over the life of the
area of interest to which it relates on a unit-of-production basis. No amortisation is charged during the exploration
and evaluation phase.
The application of the above accounting policy requires management to make certain estimates and assumptions
as to future events and circumstances, in particular, the assessment of whether economic quantities of reserves will
be found. Any such estimates and assumptions may change as new information becomes available, which may
require adjustments to the carrying value of assets. Capitalised exploration and evaluation expenditure is assessed
for impairment when an indicator of impairment exists, and capitalised assets are written off where required.
156
Opening balance at 1 July
Expenditure for the period
Acquired as part of asset acquisition (i)
Acquired as part of business combination (note 12)
Gain on remeasurement of existing interest in KCGM (note 12)
Assets included in a disposal group classified as held for sale (note 14)
Transfer to mine properties
Impairment (ii)
Exchange differences
Closing balance
30 June
2021
$M
479.0
146.4
18.0
208.6
72.0
(28.1)
(182.2)
(101.3)
(3.1)
609.3
30 June
2020
$M
266.0
80.1
208.6
-
-
(17.4)
(30.2)
(28.3)
0.2
479.0
(i) Asset acquisition
On 17 June 2021, the Company completed the acquisition of the Kurnalpi Project from KalNorth Gold Mines Limited.
During the prior year, the Company completed the takeover of Echo Resources Limited (ASX: EAR) via a
combination of existing ownership interests, on-market acquisition and off-market acquisition. For details of the
acquisition, refer to note 13.
(ii)
Impairment
At each reporting date the Group undertakes an assessment of the carrying amount of its exploration and
evaluation assets. During the year the Group identified indicators of impairment on certain exploration and
evaluation assets under AASB 6 Exploration for and Evaluation of Mineral Resources. As a result of this review, an
impairment loss of $101.3 million (2020: $28.3 million) has been recognised in the statement of profit or loss and other
comprehensive income in relation to areas of interest where no future exploration and evaluation activities are
expected.
(d) Mine properties
Accounting policy
Mine properties includes aggregate expenditure in relation to mine construction, mine development, exploration
and evaluation expenditure where a development decision has been made and acquired mineral interests.
Expenditure incurred in constructing a mine by, or on behalf of, the Group is accumulated separately for each area
of interest in which economically recoverable reserves and resources have been identified. This expenditure
includes direct costs of construction, drilling costs and removal of overburden to gain access to the ore, borrowing
costs capitalised during construction and an appropriate allocation of attributable overheads.
Mine development represents expenditure in respect of exploration and evaluation, overburden removal based on
underlying mining activities and related mining data and construction costs and development incurred by or on
behalf of the Group previously accumulated and carried forward in relation to properties in which mining has now
commenced. Such expenditure comprises direct costs and an appropriate allocation of directly related overhead
expenditure.
All expenditure incurred prior to commencement of production from each development property is carried forward
to the extent to which recoupment out of future revenue from the sale of production, or from the sale of the
property, is reasonably assured. When further development expenditure is incurred in respect of a mine property
after commencement of commercial production, such expenditure is carried forward as part of the cost of the mine
property only when future economic benefits are reasonably assured, otherwise the expenditure is classified as part
of the cost of production and expensed as incurred. Such capitalised development expenditure is added to the
total carrying value of mine development being amortised.
Mine development costs (as transferred from exploration and evaluation and/or mines under construction) are
amortised on a units-of-production basis over the life of mine to which they relate. In applying the units of production
method, amortisation is calculated using the expected total contained ounces as determined by the life of mine
plan specific to that mine property. For development expenditure undertaken during production, the amortisation
rate is based on the ratio of total development expenditure (incurred and anticipated) over the expected total
contained ounces as estimated by the relevant life of mine plan to achieve a consistent amortisation rate per
ounce. The rate per ounce is typically updated annually as the life of mine plans are revised.
Mineral interests comprise identifiable exploration and evaluation assets, mineral resources and ore reserves, which
are acquired as part of a business combination or joint venture acquisition and are recognised at fair value at the
date of acquisition. Where possible, mineral interests are attributable to specific areas of interest and are classified
within mine properties.
Production stripping expenditure
Stripping (waste removal) costs are incurred both during the development phase and production phase of
operations. Stripping costs incurred during the development phase are capitalised as mines under construction.
Stripping costs incurred during the production phase are generally considered to create two benefits:
•
•
the production of ore inventory in the period - accounted for as a part of the cost of producing those ore
inventories; or
improved access to the ore to be mined in the future - recognised under producing mines if the following
criteria are met:
• Future economic benefits (being improved access to the ore body) associated with the stripping activity are
probable;
• The component of the ore body for which access has been improved can be accurately identified; and
• The costs associated with the stripping activity associated with that component can be reliably measured.
The amount of stripping costs deferred is based on the life of component ratio which is obtained by dividing the
amount of waste tonnes mined by the quantity of ore tonnes for each component of the mine. Stripping costs
incurred in the period are deferred to the extent that the actual current period waste to ore ratio exceeds the life of
component expected 'life of component' ratio. A component is defined as a specific volume of the ore body that is
made more accessible by the stripping activity and is determined based on mine plans. An identified component of
the ore body is typically a subset of the total ore body of the mine. Each mine may have several components, which
are identified based on the mine plan. The deferred stripping asset is initially measured at cost, which is the
accumulation of costs directly incurred to perform the stripping activity that improves access to the ore within an
identified component, plus an allocation of directly attributable overhead costs. The deferred stripping asset is
depreciated over the expected useful life of the identified component of the ore body that is made more
accessible by the activity, on a units of production basis.
157
NORTHERN STAR RESOURCES LIMITED ANNUAL REPORT 2021NORTHERN STAR RESOURCES LIMITED ANNUAL REPORT 2021 FInancIal RepoRt
FInancIal RepoRt
Non-financial assets and liabilities
Non-financial assets and liabilities
(d) Mine properties (continued)
Production stripping expenditure (continued)
Expected total contained ounces as determined by the life of mine plan are used to determine the expected useful
life of the identified component of the ore body.
(e) Tax balances (continued)
(ii) Deferred tax assets
Opening balance at 1 July
Expenditure for the period
Changes in rehabilitation provision estimates
Transfer from exploration and evaluation
Acquired as part of business combination (note 12)
Fair value uplift on remeasurement of interest in KCGM (note 12)
Assets included in a disposal group classified as held for sale (note 14)
Amortisation
Exchange differences
Closing balance
Impairment
30 June
2021
$M
1,018.5
348.8
71.4
182.2
4,091.4
1,552.7
(121.0)
(445.1)
(14.8)
6,684.1
30 June
2020
$M
356.4
184.0
53.2
30.2
611.2
-
-
(219.5)
3.0
1,018.5
At each reporting date, the Group assesses whether there is any indication that an asset, or group of assets is
impaired. If any such indication exists, the recoverable amount of the asset is estimated to determine the extent of
the impairment loss (if any) which is the amount by which the assets carrying value exceeds its recoverable amount.
Where the asset does not generate cash in-flows that are independent from other assets, the Group estimates the
recoverable amount of the cash-generating unit (CGU) to which the asset belongs.
The recoverable amount is the higher of ‘fair value less costs of disposal’ (FVLCOD) and ‘value in use’.
158
Where an impairment loss subsequently reverses for assets other than goodwill, the carrying amount of the asset (or
CGU) is increased to the revised estimate of its recoverable amount, but only to the extent that the increased
carrying amount does not exceed the carrying amount that would have been determined had no impairment loss
been recognised for the asset (or CGU) in prior years. A reversal of an impairment loss is recognised in profit or loss
immediately.
Impairment testing requires assets to be grouped together into the smallest group that generates cash inflows from
continuing use that are largely independent of the cash inflows of other assets or cash generating units. Depending
on the location of the mine and processing strategy, as well as other external factors, the CGU may include more
than one operating mine with a processing facility.
There were no indications that an asset or CGU required impairment testing at 30 June 2021.
(e) Tax balances
(i) Current tax asset/(liability)
Opening balance at 1 July
Acquired balances
Tax paid
Current tax
Adjustment for current tax on prior periods
Closing balance
30 June
2021
$M
30 June
2020
$M
(12.0)
29.8
140.9
(6.1)
3.2
155.9
6.3
-
41.3
(58.8)
(0.8)
(12.0)
The balance comprises temporary differences attributable to:
Acquired tax losses
Employee benefits
Provisions
Accruals
Financial assets at fair value through OCI
Mine properties
Inventories
Other
Other
Share based payments
Sub-total other
Total deferred tax assets
Set-off of deferred tax liabilities pursuant to set-off provisions
Net deferred tax assets
30 June
2021
$M
30 June
2020
$M
20.6
26.0
175.6
5.8
1.3
1.5
56.1
286.9
8.3
4.3
12.6
26.5
14.2
98.6
3.2
1.2
-
(13.0)
130.7
10.1
3.8
13.9
299.5
144.6
(299.5)
-
(144.6)
-
Employee
benefits
$M
Provisions
$M
Inventories
$M
Mine Properties
$M
Other
$M
47.1
(5.9)
2.8
40.6
159
Total
$M
92.8
(6.1)
10.3
47.6
144.6
(6.1)
10.3
-
44.8
(21.9)
87.5
(1.9)
15.4
35.1
(1.9)
70.6
299.5
6.9
-
44.6
98.6
33.9
-
48.3
180.8
(7.1)
-
-
(13.0)
69.1
-
-
56.1
(2.8)
-
-
-
1.5
-
-
1.5
Movements
At 1 July 2019
(Charged)/credited
- to profit or loss
- directly to
equity
- acquisition of
subsidiary
At 30 June 2020
Movements
(Charged)/credited
- to profit or loss
- to other
comprehensive
income
- acquisition of
subsidiary
At 30 June 2021
(iii) Deferred tax liabilities
8.2
3.0
-
3.0
14.2
4.9
-
6.9
26.0
NORTHERN STAR RESOURCES LIMITED ANNUAL REPORT 2021NORTHERN STAR RESOURCES LIMITED ANNUAL REPORT 2021 FInancIal RepoRt
FInancIal RepoRt
Non-financial assets and liabilities
Non-financial assets and liabilities
(e) Tax balances (continued)
(iii) Deferred tax liabilities (continued)
The balance comprises temporary differences attributable to:
Property, plant and equipment
Exploration and evaluation
Mine properties
Investments at fair value
Other
Set-off of deferred tax assets pursuant to set-off provisions
Net deferred tax liabilities
30 June
2021
$M
30 June
2020
$M
137.1
87.4
995.1
0.1
5.1
1,224.8
(299.5)
925.3
49.5
69.5
157.2
-
-
276.2
(144.6)
131.6
Offsetting within tax consolidated group
Northern Star Resources Limited and its wholly-owned Australian subsidiaries, including those entities acquired as part
of the merger with Saracen Mineral Holdings during the year, have applied Australia's tax consolidation legislation
which means that the Australian entities are taxed as a single entity. Also, Northern Star Resources Limited’s US
entities are regarded as a single taxpayer in the US for income tax purposes. For accounting purposes, deferred tax
assets and deferred tax liabilities, relating to the same taxation authorities, have been offset in the consolidated
financial statements.
160
Movements
At 1 July 2019
Exploration and
evaluation
$M
Mine properties
$M
Property, plant
and equipment
$M
Other
$M
Total
$M
59.3
65.4
30.6
2.9
158.2
Charged/(credited)
- profit or loss
- directly to equity
- acquisition of subsidiary
At 30 June 2020
Charged/(credited)
- profit or loss
- to other comprehensive
income
- acquisition of subsidiary
At 30 June 2021
10.2
-
-
69.5
(6.7)
-
24.6
87.4
(7.8)
-
99.6
157.2
541.9
-
296.0
995.0
18.9
-
-
49.5
87.7
-
-
137.2
(0.3)
(2.6)
-
-
4.7
0.5
-
5.2
21.0
(2.6)
99.6
276.2
627.6
0.5
320.6
1,224.8
Recovery of deferred taxes
Deferred tax assets are recognised only if it is probable that future taxable amounts will be available to utilise those
temporary differences and losses. Deferred tax assets, including those arising from unutilised tax losses (where
applicable), require management to assess the likelihood that the Group will comply with the relevant tax legislation
and will generate sufficient taxable earnings in future years in order to recognise and utilise those deferred tax
assets. Estimates of future taxable income are based on forecast cash flows from operations and existing tax laws in
each jurisdiction. These assessments require the use of estimates and assumptions such as exchange rates,
commodity prices and operating performance over the life of the assets. To the extent that cash flows and taxable
income differ significantly from estimates, the ability of the Group to realise the deferred tax assets reported at the
reporting date could be impacted. Additionally, future changes in tax laws in the jurisdictions in which the Group
operates could limit the ability of the Group to obtain tax deductions in future years.
(f)
Inventories
Accounting policy
Gold bullion, gold in circuit and ore stockpiles are physically measured or estimated and valued at the lower of cost
and net realisable value. Cost represents the weighted average cost and includes direct purchase costs and an
appropriate portion of fixed and variable production overhead expenditure, including depreciation and
amortisation, incurred in converting materials into finished goods.
Materials and supplies are valued at the lower of cost and net realisable value. Any allowance for obsolescence is
determined by reference to specific stock items identified. A regular and on-going review is undertaken to establish
the extent of surplus items and an allowance is made for any potential loss on their disposal.
Net realisable value is the estimated selling price in the ordinary course of business less the estimated costs of
completion and the estimated costs necessary to make the sale.
Ore stockpiles which are not expected to be processed in the 12 months after the reporting date are classified as
non-current inventory. Where there is a reasonable expectation that the processing of these stockpiles will have a
future economic benefit to the Group, these stockpiles are carried at the lower of cost and net realisable value. The
non-current ore stockpiles represent the stockpiles that are not expected to be processed in the next 12 months. If
there is significant uncertainty as to if and/or when the stockpiled ore will be processed by the Group, the ore is
expensed as mined, or otherwise, where such indications arise.
The determination of the current and non-current portion of ore stockpiles includes the use of estimates and
judgements about when ore stockpile draw downs for processing will occur. These estimates and judgements are
based on current forecasts and mine plans and expected developments, taking in to account operating history.
The initial measurement of stockpile inventory acquired as part of business combinations (refer note 12) involves the
use of significant estimates and judgements. The key assumptions employed in measuring this inventory included:
forecast gold prices, processing costs, grade and thus contained metal, processing recoveries and timing of
processing. The initial fair values allocated to ore stockpiles are subsequently considered their deemed cost, and
any future adverse change in the significant estimates and judgements could result in a net realisable value below
deemed cost.
Current assets
Consumable stores
Ore stockpiles
Gold in circuit
Non-current assets
Ore stockpiles
(i) Amounts recognised in profit or loss
30 June
2021
$M
30 June
2020
$M
161
82.3
378.1
123.5
583.9
69.6
156.2
63.9
289.7
404.3
314.8
Write-downs of ore stockpiles to net realisable value amounted to $436.6 million (2020 - Nil). These were recognised
as an expense during the year ended 30 June 2021 and included in 'impairment of assets' in profit or loss.
Refer to note 5(c) for further detail surrounding the impairment of non-current inventory.
NORTHERN STAR RESOURCES LIMITED ANNUAL REPORT 2021NORTHERN STAR RESOURCES LIMITED ANNUAL REPORT 2021 FInancIal RepoRt
FInancIal RepoRt
Non-financial assets and liabilities
Non-financial assets and liabilities
(g) Provisions
Accounting policy
Provisions are recognised when the Group has a present legal or constructive obligation as a result of past events, it
is probable that an outflow of resources will be required to settle the obligation and the amount can be reliably
estimated. Provisions are not recognised for future operating losses.
Provisions are measured at the present value of management's best estimate of the expenditure required to settle
the present obligation at the end of the reporting period. The discount rate used to determine the present value is a
pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability.
Rehabilitation costs include the dismantling and removal of mining plant, equipment and building structures, waste
removal and rehabilitation of the site in accordance with the requirements of the mining permits. Such costs are
determined using estimates of future costs, current legal requirements and technology.
Rehabilitation costs are recognised in full at present value as a non-current liability. An equivalent amount is
capitalised as part of the cost of the asset when an obligation arises to decommission or restore a site to a certain
condition after abandonment as a result of bringing the assets to its present location. The capitalised cost is
amortised over the life of the project and the provision is accreted periodically as the discounting of the liability
unwinds. The unwinding of the discount is recorded as a finance cost.
Any changes in the estimates for the costs or other assumptions against the cost of relevant assets are accounted
for on a prospective basis. In determining the costs of site restoration there is uncertainty regarding the nature and
extent of the restoration due to community expectations and future legislation.
162
Employee entitlements
Rehabilitation
Other
30 June
2021
Non-
current
$M
30 June
2020
Non-
current
$M
Total
$M
Current
$M
3.0
769.3
-
772.3
92.3
772.3
231.0
1,095.6
57.0
2.1
50.2
109.3
1.7
446.4
-
448.1
Current
$M
89.3
3.0
231.0
323.3
Total
$M
58.7
448.5
50.2
557.4
(i)
Information about individual provisions and significant estimates
Rehabilitation provision
The Group assesses its mine rehabilitation provision annually. Significant judgement is required in determining the
provision for mine rehabilitation and closure as there are many factors that will affect the ultimate liability payable to
rehabilitate the mine sites, including future disturbances caused by further development, changes in technology,
changes in regulations, price increases, changes in timing of cash flows which are based on life of mine plans and
changes in discount rates. When these factors change or become known in the future, such differences will impact
the mine rehabilitation provision in the period in which the change becomes known.
Long service leave
The liability for long service leave and other long-term benefits is measured at the present value of the estimated
future cash outflows to be made by the Group for those employees with greater than 5 years’ service up to the
reporting date. Long-term benefits not expected to be settled within 12 months are discounted using the rates
attaching to high quality corporate bonds at the reporting date, which most closely match the terms of maturity of
the related liability. In determining the liability for these long-term employee benefits, consideration has been given
to expected future increases in wage and salary rates, the Group’s experience with staff departures and periods of
service. Related on-costs are also included in the liability.
(ii) Movements in provisions
Movements in each class of provision during the financial year, other than employee entitlements, are set out
below:
(g) Provisions (continued)
(ii) Movements in provisions (continued)
2021
Carrying amount at start of year
- liabilities attributable to assets held for sale
Additional provisions recognised
Amounts used
- acquired through business combination (note 12)
Unwinding of discount
Fair value loss on remeasurement of existing interest in KCGM
Exchange differences
Carrying amount at end of year
2020
Carrying amount at start of year
Additional provisions recognised
Amounts used
- acquired through asset acquisition (note 13)
- acquired through business combination (note 12)
Unwinding of discount
Exchange differences
Carrying amount at end of year
Rehabilitation
$M
Other*
$M
448.5
(26.8)
80.5
-
278.9
4.2
(4.0)
(9.0)
772.3
Rehabilitation
$M
219.6
53.2
-
20.7
148.5
4.7
1.8
448.5
50.2
(0.2)
227.6
(46.6)
-
-
-
-
231.0
Other
$M
5.8
50.6
(6.2)
-
-
-
-
50.2
*Other provisions includes estimates of stamp duty payable on the completion of past transactions. The stamp duty
provision at 30 June 2021 is $225.3 million (2020: $50.2 million) and includes estimates of stamp duty for the interests in
KCGM and other previous acquisitions.
163
9 Equity
Accounting policy
Ordinary shares are classified as equity. They entitle the holder to participate in dividends and have no par value.
Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net
of tax, from the proceeds.
(a) Share capital
30 June
2021
Shares
30 June
2020
Shares
30 June
2021
$M
30 June
2020
$M
Ordinary shares
Fully paid
Total share capital
(i) Movements in ordinary shares:
1,163,686,519
1,163,686,519
740,151,041
740,151,041
6,435.1
6,435.1
Details
Number of shares
Opening balance 1 July 2019
Employee Share Plan issues
Equity issue net of transaction costs and tax
Issue of shares on vesting of options/performance rights (i)
Balance 30 June 2020
639,592,634
102,258
91,110,949
9,345,200
740,151,041
1,323.9
1,323.9
Total
$M
473.7
1.3
808.1
40.8
1,323.9
NORTHERN STAR RESOURCES LIMITED ANNUAL REPORT 2021NORTHERN STAR RESOURCES LIMITED ANNUAL REPORT 2021 FInancIal RepoRt
FInancIal RepoRt
(a) Share capital (continued)
(i) Movements in ordinary shares: (continued)
Employee Share Plan issues
Equity issue net of transaction costs and tax (note 12)
Issue of shares on vesting of options/performance rights (i)
Closing treasury shares (i)
Balance 30 June 2021
Equity
2.4
5,104.6
4.2
6,435.1
-
6,435.1
244,000
422,480,346
811,132
1,163,686,519
(150,000)
1,163,536,519
(i) During the year, 439,817 FY18 Performance Rights granted in December 2017; 196,470 FY20 STI Performance Rights
granted in November and December 2019; and 24,845 FY20 Share Rights granted in November 2019 vested after
their respective performance periods. These had been awarded to Directors, Key Management Personnel and other
senior employees. As a result, 661,132 fully paid ordinary shares were issued on vesting of the rights. Additionally,
150,000 shares were issued to the employee share trust in relation to the FY20 restricted share grant and which are
unvested at 30 June 2021.
164
Risk
This section of the notes discusses the Group’s exposure to various risks and shows how these could affect the
Group’s financial position and performance.
10 Financial risk management
This note explains the Group's exposure to financial risks and how these risks could affect the Group’s future financial
performance. Current year profit and loss information has been included where relevant to add further context.
Risk
Market risk -
foreign
exchange
Market risk –
interest rate
Market risk –
security prices
Market risk -
commodity
price risk
Credit risk
Exposure arising from
Future commercial transactions
Measurement of risk
Cash flow forecasting
Borrowings at variable rates
Sensitivity analysis
Investments in equity securities
Sensitivity analysis
Fluctuations in the prevailing
market prices of gold
Sensitivity analysis
Cash and cash equivalents and
trade and other receivables
Aging analysis and
credit ratings
Liquidity risk
Borrowings and other liabilities
Rolling cash flow
forecasts
How the risk is managed
Net-off foreign exchange
exposures and natural hedge
mechanisms
Fixed interest rates over term of
borrowings on plant and
equipment and monitoring of
variable rates on corporate
bank debt
Management of equity
investments
Gold hedging instruments
Diversification of bank deposits
and credit risk where
appropriate
Management of availability of
committed borrowing facilities
and maturity
The Board has the overall responsibility for the establishment and oversight of the risk management framework. The
Audit and Risk Management Committee is responsible for developing and monitoring risk management policies. The
Committee reports regularly to the Board on its activities.
Risk management policies are established to identify and analyse the risks faced by the Group, to set appropriate
risk limits and controls, and to monitor risks and adherence to limits. Risk management policies and systems are
reviewed regularly to reflect changes in market conditions and the Group’s activities. The Group, through its training
and management standards and procedures, aims to develop a disciplined and constructive control environment
in which all employees understand their roles and obligations.
165
The Group’s Audit and Risk Management Committee oversees how management monitors compliance with the
Group’s risk management policies and procedures and reviews the adequacy of the risk management framework in
relation to the risks faced by the Group.
(a) Market risk
(i)
Foreign exchange risk
The Group operates internationally and is exposed to foreign exchange risk arising from foreign currency
transactions, primarily with respect to the US$. Foreign exchange risk arises from future commercial transactions and
recognised assets and liabilities denominated in a currency that is not the functional currency of the relevant entity.
The carrying value of financial instruments that are held in a currency other than the entities functional currency are
as follows (expressed in Australian dollars):
Financial Assets - USD
Cash and cash equivalents
Trade receivables
Derivative financial instruments
30 June
2021
$M
30 June
2020
$M
25.6
16.6
0.4
42.6
36.9
6.4
-
43.3
NORTHERN STAR RESOURCES LIMITED ANNUAL REPORT 2021NORTHERN STAR RESOURCES LIMITED ANNUAL REPORT 2021 FInancIal RepoRt
FInancIal RepoRt
Financial risk management
Financial risk management
(a) Market risk (continued)
(i)
Foreign exchange risk (continued)
Financial Assets - EUR
Cash and cash equivalents
30 June
2021
$M
30 June
2020
$M
2.9
-
The sensitivity of profit or loss to changes in the exchange rates arises mainly from US dollar-denominated financial
instruments. A 10 percent increase in the AUD/USD exchange rate would decrease post tax profit by $3.2 million
while a 10 percent decrease in the AUD/USD exchange rate would increase post tax profit by $3.9 million.
Foreign currency forwards
The Group uses foreign currency forwards to hedge its exposure to foreign currency risk. The group has determined
the fair value of the foreign currency forwards by calculating the present value of future cash flows based on
observable forward exchange rates at the balance sheet date. As the forward contracts are used to hedge
forecast transactions, the group designates the full change in fair value of the forward contract as the hedging
instrument and recognises the gains or losses relating to the effective portion of the change in fair value of the entire
forward contract in the cash flow hedge reserve within equity.
(ii) Cash flow and fair value interest rate risk
The Group is exposed to interest rate risk through its longer term borrowings comprising a $500 million facility maturing
3 years from financial close and $500 million facility maturing 4 years from financial close. The Group has drawn
down $662 million from these facilities. The Group is exposed to the risk of future changes in market interest rates.
Holding all other variables constant, the impact on FY2021 post tax profit of a 1 percent increase/ decrease in the
rate of interest on the borrowings of the Group would be a decrease/increase of $19 million.
166
Borrowings related to the purchases of plant and equipment under finance lease arrangements have fixed interest
rates over their term and therefore not subject to interest rate risk as defined in AASB 7.
(iii) Price risk
Exposure
The Group is exposed to the risk of fluctuations in the prevailing market prices for the gold and silver currently
produced from its operating mines.
The Group manages a component of this risk through the use of gold forward contracts and options. These
contracts are accounted for as sale contracts with revenue recognised once gold has been physically delivered
into the contract. The physical gold delivery contracts are considered a contract to sell a non-financial item and
therefore do not fall within the scope of AASB 9 Financial Instruments. The Group's contractual sales commitments
are disclosed in note 17.
The Group is also exposed to equity securities price risk arising from investments held by the Group and classified in
the statement of financial position as financial assets at fair value through OCI and investments accounted for using
the equity method.
All of the Group's equity investments are publicly traded on the Australian Securities Exchange or TSX Venture
Exchange.
(b) Credit risk
Credit risk refers to the risk that a counter party will default on its contractual obligation resulting in financial loss to
the Group. Credit risk arises from cash and cash equivalents and credit exposures to gold sales counterparties and
financial counterparties.
(b) Credit risk (continued)
(i) Risk management
The Group has adopted the policy of dealing with creditworthy counterparties as a means of mitigating the risk of
financial loss from defaults. Cash is deposited only with institutions approved by the Board, typically with a current
minimum credit rating of A (or equivalent) as determined by a reputable credit rating agency e.g. Standard &
Poor’s. Permitted instruments by which the Group hedges gold price risk are entered into with financial
counterparties with a minimum credit of A (or equivalent). The Group has established limits on aggregate funds on
term deposit or invested in money markets to be placed with a single financial counterparty and monitors credit
and counterparty risk using credit default swaps. The Group sells the majority of its unhedged gold and silver to
counterparties with settlement terms of no more than 2 days. The counterparties have investment grade credit
ratings and the exposures, as noted, are short dated. The Group does not have any other significant credit risk
exposure to a single counterparty or any group of counterparties having similar characteristics.
(ii) Credit quality
The credit quality of financial assets that are neither past due nor impaired can be assessed by reference to external
credit ratings (if available) or to historical information about counterparty default rates.
Trade receivables
Counterparties with external credit rating
AA
A
Counterparties without external credit rating *
Other
Total trade receivables
Cash at bank and short-term bank deposits
AA
A
* Other - counterparties with no defaults in the past
(iii)
Impaired trade receivables
30 June
2021
$M
30 June
2020
$M
17.4
-
17.4
7.9
25.3
763.0
8.9
771.9
40.3
30.9
71.2
1.3
72.5
666.7
10.6
677.3
167
In determining the recoverability of trade and other receivables, the Group performs a risk analysis considering the
type and age of the outstanding receivable and the creditworthiness of the counterparty. If appropriate, an
impairment loss will be recognised in profit or loss. The Group does not have any impaired Trade and other
receivables as at 30 June 2021 (2020: nil). No allowance for expected credit losses has been recognised as the
duration of associated exposures is short and/or the probability of default is negligible.
(c) Liquidity risk
The Group manages liquidity risk by monitoring immediate and forecasted cash requirements and ensures
adequate cash reserves are maintained to pay debts as and when due.
Prudent liquidity risk management implies maintaining sufficient cash and marketable securities and the availability
of funding through an adequate amount of committed credit facilities to meet obligations when due. At the end of
the reporting period, the Group held a short term on-demand cash balance of $771.9 million (2020: $675.4 million)
that was available for managing liquidity risk.
Management monitors rolling forecasts of the Group's available cash reserve (comprising the undrawn borrowing
facilities below and cash and cash equivalents) on the basis of expected cash flows. The Group's liquidity
management policy involves seeking to maintain cash resources of at least 30 days costs of goods sold plus net
interest costs.
NORTHERN STAR RESOURCES LIMITED ANNUAL REPORT 2021NORTHERN STAR RESOURCES LIMITED ANNUAL REPORT 2021 FInancIal RepoRt
FInancIal RepoRt
Financial risk management
Capital Management
(c) Liquidity risk (continued)
(i)
Financing arrangements
The Group had access to the following undrawn borrowing facilities at the end of the reporting year:
30 June
2021
$M
30 June
2020
$M
Floating rate
- Expiring beyond one year (financing facility)
338.0
-
The revolving credit facilities may be drawn at any time until maturity. As part of the debt refinancing following
implementation of the scheme of arrangement with Saracen Mineral Holdings Ltd, the revolving credit facilities were
increased to $1 billion with revised maturities of June 2023 ($500 million, fully drawn) and June 2024 ($500 million,
drawn to $162 million).
Refer to note 7(c) for full details of financing facilities available to the Group.
(ii) Maturities of financial liabilities
The tables below analyse the Group's financial liabilities into relevant maturity groupings based on their contractual
maturities.
The amounts disclosed in the table are the contractual undiscounted cash flows. Balances due within 12 months
equal their carrying balances as the impact of discounting is not significant.
Contractual maturities of financial
liabilities
At 30 June 2021
Trade and other payables
Lease liabilities
Secured asset financing
Borrowings
Total non-derivatives
At 30 June 2020
Trade and other payables
Lease liabilities
Borrowings
Total non-derivatives
Less than 6
months
$M
6 - 12
months
$M
Between 1
and 2
years
$M
Between 2
and 5
years
$M
296.5
28.5
20.3
5.8
351.1
155.7
38.8
32.6
227.1
-
24.4
17.0
5.7
47.1
-
29.5
82.7
112.2
-
53.1
36.8
11.5
101.4
-
34.3
164.5
198.8
-
37.1
14.7
673.7
725.5
-
6.8
458.3
465.1
Total
contractual
cash
flows
$M
Over 5
years
$M
-
5.2
1.4
-
6.6
-
11.3
-
11.3
296.5
148.2
90.3
696.7
1,231.7
155.7
120.6
738.1
1,014.4
Carrying
amount
liabilities
$M
296.5
141.9
87.9
658.3
1,184.6
155.7
113.8
697.3
966.8
The weighted average interest rate on lease liabilities was 3.78% (2020: 4.14%).
Of the $458.3 million disclosed in the 2020 borrowings time band between 2 and 5 years, the Group has early repaid
$200 million on 6 July 2020.
11 Capital management
(a) Risk management
The Group's objectives when managing capital are to:
•
safeguard their ability to continue as a going concern, so that they can continue to provide returns for
shareholders and benefits for other stakeholders, and
168
(a) Risk management (continued)
In order to maintain or adjust the capital structure, the Group may adjust the amount of dividends paid to
Shareholders, return capital to Shareholders or issue new shares.
Total capital is equity, as shown in the statement of financial position. The Group is not subject to any externally
imposed capital requirements.
(b) Dividends
(i) Ordinary shares
Interim ordinary dividend for FY20 of 7.5 cents per fully paid share, payment of
which was postponed in March 2020 when the Company withdrew its FY20
guidance, and was paid on 16 July 2020
Final ordinary dividend for FY20 of 9.5 cents (FY19: 7.5 cents) per fully paid ordinary
share paid on 30 September 2020
Special dividend of 10 cents per fully paid share paid on 30 September 2020
Interim ordinary dividend for FY21 of 9.5 cents (FY20: 7.5 cents) per fully paid
ordinary share paid on 30 March 2021
30 June
2021
$M
30 June
2020
$M
55.5
70.4
74.1
110.5
310.5
310.5
-
48.7
-
-
48.7
48.7
* On 26 March 2020, the Company announced implementing prudent financial measures designed to preserve the
long-term value of the business following uncertainty arising due to the COVID-19 global pandemic. In light of this,
the Company deferred the payment of its interim dividend due on 30 March 2020. In accordance with Accounting
Standards, the Group has not recognised a provision for this interim dividend because the liability is not incurred until
the fixed time for payment arrives. The interim dividend was subsequently paid on 16 July 2020.
169
(ii) Dividends not recognised at the end of the reporting period
In addition to the above dividends, since year end the Directors have
recommended the payment of a final dividend of 9.5 cents per fully paid ordinary
share (2020 - 7.5 cents) as at 30 June 2021, fully franked based on tax paid at 30%.
The aggregate amount of the proposed dividend expected to be paid on 29
September 2021 out of retained earnings at 30 June 2021, but not recognised as a
liability at year end, is
Not applicable as at 30 June 2021 - Special dividend for the year ended 30 June
2020 of 10 cents per fully paid ordinary share as at 30 June 2020, fully franked based
on tax paid at 30%. The aggregate amount of the proposed dividend expected to
be paid on 23 September 2020 out of retained earnings from 30 June 2020, but not
recognised as a liability at year end, is
Not applicable as at 30 June 2021 - Interim dividend for the half year ended 31
December 2019 of 7.5 cents per fully paid ordinary share as at 30 June 2020, fully
franked based on tax paid at 30%
30 June
2021
$M
30 June
2020
$M
110.5
70.3
-
-
74.0
55.5
• maintain an optimal capital structure to reduce the cost of capital and maximise returns to Shareholders and
benefits for other stakeholders.
(iii) Franking credits
At balance date the value of franking credits available (at 30%) was $321.9 million (2020: $229.1 million). The
balance of franking credits disclosed in the table above is as at 30 June 2021 and does not include the expected
downward revision to the franking account balance on lodgement of the Group’s FY21 Australian tax return, during
FY22, and the subsequent expected refund that will be received.
NORTHERN STAR RESOURCES LIMITED ANNUAL REPORT 2021NORTHERN STAR RESOURCES LIMITED ANNUAL REPORT 2021 FInancIal RepoRt
FInancIal RepoRt
Group structure
This section provides information which will help users understand how the Group structure affects the financial
position and performance of the Group as a whole. In particular, there is information about:
•
•
•
changes to the structure that occurred during the year as a result of business combinations and the disposal of
a discontinued operation
interests in joint operations
interests in associates.
A list of significant subsidiaries is provided in note 15.
12 Business combination
Accounting policy
The acquisition method of accounting is used to account for all business combinations, regardless of whether equity
instruments or other assets are acquired. The consideration transferred for the acquisition of a subsidiary comprises
the: fair values of the assets transferred; liabilities incurred to the former owners of the acquired business; equity
interests issued by the Group; fair value of any asset or liability resulting from a contingent consideration
arrangement; and fair value of any pre-existing equity interest in the subsidiary.
Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are, with
limited exceptions, measured initially at their fair values at the acquisition date. The application of acquisition
accounting requires significant judgement and estimates to be made, which are discussed below. The Group
engages independent third parties to assist with the determination of the fair value of assets acquired, liabilities
assumed, non-controlling interest, if any, and goodwill, based on recognised business valuation methodologies.
The income valuation method represents the present value of future cash flows over the life of the asset using:
• financial forecasts, which rely on management’s estimates of reserve quantities and exploration potential, costs to
produce and develop reserves, revenues, and operating expenses;
• long-term growth rates;
• appropriate discount rates; and
• expected future capital requirements.
170
The market valuation method uses prices paid for a similar asset by other purchasers in the market, normalised for
any differences between the assets.
The cost valuation method is based on the replacement cost of a comparable asset at the time of the acquisition
adjusted for depreciation and economic and functional obsolescence of the asset and estimates of residual values.
The Group recognises any non-controlling interest in the acquired entity on an acquisition-by-acquisition basis either
at fair value or at the non-controlling interest’s proportionate share of the acquired entity’s net identifiable assets.
Acquisition-related costs are expensed as incurred.
The excess of the consideration transferred and the amount of any non-controlling interest in the acquiree over the
acquisition date fair value of the net identifiable assets acquired is recorded as goodwill. If those amounts are less
than the fair value of the net identifiable assets of the subsidiary acquired and the measurement of all amounts has
been reviewed, the difference is recognised directly in profit or loss as a bargain purchase.
If the initial accounting for the business combination is not complete by the end of the reporting period in which the
acquisition occurs, an estimate will be recorded. Subsequent to the acquisition date, but not later than one year
from the acquisition date, the Group will record any material adjustments to the initial estimate based on new
information obtained that would have existed as of the date of the acquisition.
Business combination
(a) Saracen Mineral Holdings Limited
(i)
Summary of the acquisition
On 12 February 2021, the Company implemented the scheme of arrangement (Scheme) in relation to the merger of
the Company and Saracen Mineral Holdings Limited (Saracen).
In accordance with the Scheme, all Saracen shares have been transferred to Northern Star, and eligible Saracen
shareholders were issued the Scheme consideration of 0.3763 Northern Star shares for each Saracen share held on
the Scheme record date. Consequently, 422,480,346 Northern Star shares were issued on that date.
In addition to recognising the effects of acquiring Saracen’s assets and liabilities, the transaction also results in the
Company obtaining control over Kalgoorlie Consolidated Gold Mines Pty Ltd (KCGM) in which it previously held a 50
percent joint operating interest.
Details of the purchase consideration and the net identifiable assets acquired are as follows:
Purchase consideration
Ordinary shares issued*
Net purchase consideration
$M
5,107.2
5,107.2
* 422,480,346 ordinary shares were issued as consideration with a deemed fair value based on the 1-day volume
weighted average share price on Implementation Date of $12.09 per share.
The assets and liabilities recognised as a result of the acquisition are as follows:
Cash and cash equivalents
Trade and other receivables
Income tax receivable
Inventories - finished product
Inventories - gold in circuit
Inventories - ore stockpiles
Inventories - supplies (net of provision)
Inventories - ore stockpiles (non-current)
Property, plant and equipment
Mine properties
Deferred exploration
Right of use assets
Investments
Trade and other payables
Employee Provisions
Hedgebook contract liability
Lease liabilities
Borrowings
Employee provisions (non-current)
Derivative liability (non-current)
Lease liabilities (non-current)
Borrowings (non-current)
Deferred tax liability
Provision for rehabilitation
Net identifiable assets acquired
171
Provisional
Fair Value
$M
402.5
12.6
29.8
5.5
58.0
230.4
34.9
442.4
632.6
4,091.4
208.6
103.9
0.7
(128.7)
(22.5)
(57.0)
(26.3)
(77.0)
(1.6)
(8.0)
(89.8)
(206.0)
(250.3)
(278.9)
5,107.2
As outlined in the Group’s Business Combination accounting policy above, the identification of assets and liabilities
and associated fair value measurement as part of acquisition accounting is subject to significant judgement and
estimation.
The following key estimates and judgements were required as part of the acquisition accounting for Saracen:
NORTHERN STAR RESOURCES LIMITED ANNUAL REPORT 2021NORTHERN STAR RESOURCES LIMITED ANNUAL REPORT 2021 FInancIal RepoRt
FInancIal RepoRt
(a) Saracen Mineral Holdings Limited
(a) Saracen Mineral Holdings Limited
Inventory - refer to note 5(c) for estimates and judgements involved in determining acquired inventory values.
Remeasuring of the equity interest in the acquiree held by the acquirer before the business combination
Business combination
Business combination
Property, plant and equipment - expert plant valuers were engaged to assist in determining the fair values for
property, plant and equipment. The valuation of these assets involved use of, among other factors, published
market data, current replacement/reproduction costs, residual values, inflation factors, useful life assumptions and
site inspections to determine current wear and tear.
Mine Properties - in a mining transaction the residual amount of purchase consideration after all the other assets and
liabilities have been identified and re-measured to reflect acquisition date fair value is typically allocated to mine
properties (excluding site rehabilitation). After this allocation, further analysis in the form of discounted cash flows
and market implied resource multiples are used to ensure the fair value ascribed to mine properties is fair and
reasonable. Discounted cash flow analysis requires estimation of the future amount and timing of cash flows.
Estimates and judgement are required in selecting the inputs for such analysis including: total ore tonnes, grade,
metal recoveries, gold prices, exchange rates, future mining, processing costs and capital costs and discount rates.
Analysis and cross checks to market data using implied resource multiples also requires the use of judgement when
selecting comparative companies and transactions with which to perform comparisons.
Hedgebook contract liability - Assessment of the gold sales contracts relative to market rates is required at the date
of acquisition. Where gold sales contracts are below market rates on a net basis (i.e. unfavourable), a contract
liability is recognised based on the difference in the contracted gold sales price relative to the gold price for a
forward contract with the same maturity date as at the date of acquisition.
Provision for rehabilitation - refer to note 7 or estimates and judgements involved in determining provisions for
rehabilitation.
Deferred tax - the recognition of deferred tax liabilities is directly associated with the determination of both initial
accounting values and the determination and allocation of tax bases on entry into the Group’s tax consolidated
group. In Saracen's case, value attributed to the underlying tenement value is non-tax deductible due to those
tenements held by the acquired entities being subject to the capital gains tax rules rather than the tax depreciation
rules enacted in 2001.
172
Any changes in the determination of fair values for all assets and liabilities and allocation of value for tax purposes
could give rise to changes in deferred tax balances.
(ii) Acquired receivables
The fair value of acquired trade receivables is $12.6 million. The gross contractual amount for trade receivables due
is $12.6 million, of which none is expected to be uncollectible.
(iii) Revenue and profit contribution
The acquired business contributed revenues of $531.6 million and net profit of $6.1 million to the group for the period
12 February 2021 to 30 June 2021. This excludes the impact of the remeasurement of the Company's initial 50
percent interest in KCGM.
If the acquisition had occurred on 1 July 2020, consolidated pro-forma revenue and net profit for the year ended 30
June 2021 would have been $1,275.9 million and $14.6 million respectively, based on an extrapolation of actual
results since acquisition.
Purchase consideration - cash inflow
Inflow of cash on acquisition of subsidiary
Cash balances acquired
Net inflow of cash - Investing activities
Acquisition-related costs
$M
402.5
402.5
Acquisition related costs of $231.1 million are included in acquisition and integration in profit or loss.
We note that fair values assigned to identifiable assets, liabilities and associated tax balances above are presented
on a provisional basis. The Group may recognise an adjustment to these provisional values as a result of completing
fair value accounting within 12 months following acquisition date.
The acquistion of Saracen Mineral Holdings Limited resulted in the Company obtaining control over KCGM, in which
it previously held a 50 percent joint operating interest. As a result, there is a requirement to remeasure the
Company's pre-existing 50 percent interest in KCGM to fair value. This has resulted in a pre-tax gain of $1.92 billion
recognised in the statement of profit or loss and other comprehensive income.
The assets and liabilities relating to the remeasurement of the Company's pre-existing 50 percent interest in KCGM to
fair value are as follows:
Current Assets
Inventories - gold in circuit
Inventories - ore stockpiles
Inventories - supplies (net of provision)
Non-current assets
Inventories - ore stockpiles
Property, plant & equipment
Mine properties
Deferred exploration
Right of use assets
Current liabilities
Lease liabilities
Non-current liabilities
Lease liabilities
Rehabilitation provision
Gain on remeasurement (pre-tax)
Deferred tax liability
Gain on remeasurement (post-tax)
$M
17.3
75.6
(3.1)
101.8
98.7
1,552.7
72.0
1.2
(0.6)
(0.3)
4.0
1,919.3
(575.8)
1,343.5
(b) Prior year acquisition - KCGM 50 percent interest
(i)
Summary of the acquisition
173
On 3 January 2020, Northern Star ("NST") completed the acquisition of all of the shares in Kalgoorlie Lake View Pty Ltd
from Newmont Goldcorp Australia Pty Ltd ("Newmont"), which holds a 50 percent interest in Kalgoorlie Consolidated
Gold Mines Pty Ltd (KCGM) and in the operations and assets managed by KCGM, including the Super Pit in
Kalgoorlie, Western Australia. The Group's share in KCGM is accounted for as a Joint Operation with the Group's
share of asset, liabilities, income and expenses consolidated into its accounts. The Group sells its own share of gold
bullion from the joint venture. Total consideration paid in respect of the acquisition was US$775.0 million (A$1,127.8
million).
As part of the acquisition, NST also acquired the following from Newmont related entities:
• a separate parcel of nearby Kalgoorlie tenements; and
• a US$25.0 million conditionally refundable option arrangement to acquire 100 percent of the equity in GMK
Investments Pty Ltd, which holds the Newmont Power business and associated assets and a six month transactional
services agreement for Newmont to provide key personnel on a secondment basis to assist with the effective
transition of the KCGM Operations to NST.
Refer to note 7(a) for further details around $US22.5 million prepayment to acquire Newmont's Power business. As at
30 June 2020, costs associated with transaction services were expensed within acquisition and integration costs.
Details of the purchase consideration and the net identifiable assets acquired are as follows:
Purchase consideration
Consideration paid*
Associated assets acquired**
Net purchase consideration
$M
1,164.2
(36.4)
1,127.8
* Includes $15.6 million of foreign exchange losses recognised as part of transaction consideration resulting from
hedging the currency risk between the date of signing the share sale deed and the date of completion, being 3
January 2020.
** The associated assets acquired comprise the transitional services arrangement and a conditionally refundable
option arrangement to acquire the Newmont power business which supplies power to KCGM.
NORTHERN STAR RESOURCES LIMITED ANNUAL REPORT 2021NORTHERN STAR RESOURCES LIMITED ANNUAL REPORT 2021 FInancIal RepoRt
FInancIal RepoRt
Business combination
Business combination
(b) Prior year acquisition - KCGM 50 percent interest
The assets and liabilities recognised as a result of the acquisition are as follows:
Cash and cash equivalents
Trade and other receivables
Inventories - consumables stores
Inventories - gold in circuit
Inventories - ore stockpiles
Property, plant & equipment
Mine properties
Right of use assets (IFRS 16)
Trade and other payables
Provision for rehabilitation
Lease liabilities
Employee provisions
Deferred tax liability
Net identifiable assets acquired
Fair Value
$M
10.7
8.7
20.9
26.4
466.3
234.3
611.2
14.6
(40.1)
(148.5)
(14.6)
(10.1)
(51.9)
1,127.8
(b) Prior year acquisition - KCGM 50 percent interest
(iii) Revenue and profit contribution
The acquired business contributed revenues of $235.8 million and net profit of $26.1 million to the Group for the
period 3 January 2020 to 30 June 2020.
If the acquisition had occurred on 1 July 2019, consolidated pro-forma revenue and net profit for the year ended 30
June 2020 would have been $471.6 million and $52.2 million respectively, based on an extrapolation of actual results
since acquisition.
Purchase consideration - cash outflow
Outflow of cash to acquire subsidiary net of cash acquired
Consideration
Less: Cash balances acquired
Less: Foreign exchange movement on cash
Net outflow of cash - investing activities
Acquisition-related costs
$M
1,164.2
10.7
15.6
26.3
1,137.9
As outlined in the Group’s Business Combination accounting policy above, the identification of assets and liabilities
and associated fair value measurement as part of acquisition accounting is subject to significant judgement and
estimation.
The following key estimates and judgements were required as part of the acquisition accounting for KCGM:
Inventory - refer note 8(f) for estimates and judgements involved in determining acquired inventory values.
Acquisition related costs of $43.9 million are included in acquisition and integration expense in profit or
loss.
13 Asset acquisition
On the 26 August 2019, Northern Star Resources Ltd ("Northern Star") and Echo Resources Limited ("Echo") entered
into a Bid Implementation Agreement, in which Northern Star offered to acquire all of the issued and outstanding
ordinary shares in Echo that it did not already own.
Property, plant and equipment - expert plant valuers were engaged to assist in determining the fair values for
property, plant and equipment. The valuation of these assets involved use of, among other factors, published
market data, current replacement/reproduction costs, residual values, inflation factors, useful life assumptions and
site inspections to determine current wear and tear.
174
On 14 October 2019, Northern Star acquired control of Echo through a combination of its pre-existing stake,
acceptances of the Northern Star Offer and on-market acquisitions. The takeover was completed on 6 December
2019. The total consideration paid by Northern Star was $219.8 million.
175
Mine Properties - in a mining transaction the residual amount of purchase consideration after all the other assets and
liabilities have been identified and re-measured to reflect acquisition date fair value is typically allocated to mine
properties (excluding site rehabilitation). After this allocation, further analysis in the form of discounted cash flows
and market implied resource multiples are used to ensure the fair value ascribed to mine properties is fair and
reasonable. Discounted cash flow analysis requires estimation of the future amount and timing of cash flows.
Estimates and judgement are required in selecting the inputs for such analysis including: total ore tonnes, grade,
metal recoveries, gold prices, exchange rates, future mining, processing costs and capital costs and discount rates.
Analysis and cross checks to market data using implied resource multiples also requires the use of judgement when
selecting comparative companies and transactions with which to perform comparisons.
Provision for rehabilitation - refer note 8(g) for estimates and judgements involved in determining provisions for
rehabilitation.
Deferred tax - the recognition of deferred tax liabilities is directly associated with the determination of both initial
accounting values and the determination and allocation of tax bases on entry into the Group’s tax consolidated
group. Value attributed to the underlying tenement value is non-tax deductible due to those tenements held by the
acquired entities being subject to the capital gains tax rules rather than the tax depreciation rules enacted in 2001.
Any changes in the determination of fair values for all assets and liabilities and allocation of value for tax purposes
could give rise to changes in deferred tax balances.
(ii) Acquired receivables
The fair value of acquired trade receivables is $7.2 million. The gross contractual amount for trade receivables due is
$7.2 million, of which none is expected to be uncollectible.
The Group determined the transaction represented an asset acquisition, rather than a business combination, having
determined the concentration test in AASB 3 Business Combinations was met. The concentration test is met if
substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or group of
similar identifiable assets. The determination of the fair values for such assets and thus both the concentration test
and any subsequent asset acquisition accounting involves the use of significant estimates and judgements. The
value paid for Echo was determined to be concentrated in the value of acquired exploration and evaluation assets.
The estimates and judgements required the determination of the fair value of acquired plant and equipment,
including the Bronzewing processing facility. External valuation experts were used to value this plant and equipment
and the valuations were made with reference to, among other factors, their current condition and location, recent
price estimates, independently published external construction price guides and experience from other projects.
When an asset acquisition does not constitute a business combination, the assets and liabilities are assigned a
carrying amount based on their relative fair values and no deferred tax will arise in relation to the acquired assets
and assumed liabilities, as the initial recognition exemption for deferred tax under AASB 112 is applied. Post
acquisition, when Echo subsequently joined Northern Star's Australian tax consolidated group (6 December 2019),
under Accounting Standards, these tax losses were required to be recognised. Because the other tax effects of the
transaction could not be recognised on obtaining control, due to the recognition exemption, this resulted in a
non-cash credit to income tax expense (refer note 7). No goodwill arises on the acquisition and transactions costs of
the acquisition are included in the capitalised cost of the asset.
Purchase consideration
Cash paid
Acquisition costs
Carrying value transferred on obtaining control
$M
103.3
12.9
103.6
219.8
The opening carrying value of Echo on 1 July 2019 was $16.3 million; the Company paid cash of $88.4 million prior to
obtaining control; and recognised losses of $1.1 million as an associate: resulting in a total associate carrying value
of $103.6 million being transferred on obtaining control.
NORTHERN STAR RESOURCES LIMITED ANNUAL REPORT 2021NORTHERN STAR RESOURCES LIMITED ANNUAL REPORT 2021 FInancIal RepoRt
FInancIal RepoRt
Cash and cash equivalents
Trade and other receivables
Property, plant and equipment
Exploration and evaluation assets
Trade and other payables
Provisions - other
Provision for rehabilitation
Net identifiable assets acquired
14 Assets classified as held for sale
(a) Description
Asset acquisition
Fair value
$M
15.8
1.2
20.5
208.6
(5.1)
(0.5)
(20.7)
219.8
During Q4 of FY21, the Company began marketing the sale of it's Kundana Operations, its 51% interest in each of the
East Kundana Production Joint Venture and the East Kundana Exploration Joint Venture, its 75% interest in the West
Kundana Farmin Joint Venture, and the Carbine / Carnage gold project ('Kundana Assets"). As at 30 June 2021 the
assets were available for immediate sale and the sale was considered highly probable within a 12 month period. The
associated assets and liabilities were consequently presented as held for sale.
Subsequently, on 22 July 2021 the Group announced that it has entered into a binding Share and Asset Sale
Agreement with Evolution Mining Ltd (ASX: EVN) for the Kundana Assets for a purchase price of $400 million cash.
The transaction completed on 18 August 2021.
The disposal group contributed $281.8 million (2020: $376.3 million) of revenue and $39.9 million (2020: $61.6 million)
profit after tax during FY21. Gold sales for the year relating to the disposal group were 122,495oz (2020: 171,007oz).
(b) Assets and liabilities of disposal group classified as held for sale
176
The following assets and liabilities were reclassified as held for sale in relation to the sale of the Kundana Assets as at
30 June 2021:
Assets classified as held for sale
Cash and cash equivalents
Trade and other receivables
Inventories
Property, plant and equipment
Exploration and evaluation assets
Mine properties
Total assets of disposal group held for sale
Liabilities directly associated with assets classified as held for sale
Trade and other payables
Provisions
Borrowings
Total liabilities of disposal group held for sale
Net assets held for sale
Net assets held for sale
30 June
2021
$M
3.2
5.9
16.1
30.0
28.1
121.0
204.3
(14.0)
(33.3)
(18.0)
(65.3)
139.0
15 Interests in other entities
(a) Material subsidiaries
The Group’s principal subsidiaries at 30 June 2021 are set out below. Unless otherwise stated, they have share capital
consisting solely of ordinary shares that are held directly by the Group, and the proportion of ownership interests held
equals the voting rights held by the Group. The country of incorporation or registration is also their principal place of
business.
Name of entity
Northern Star Mining Services Pty Ltd
Northern Star (Kanowna) Pty Ltd
Kundana Gold Pty Ltd
Gilt-Edged Mining Pty Ltd
EKJV Management Pty Ltd
Kanowna Mines Pty Ltd
GKL Properties Pty Ltd
Northern Star (Tanami) Pty Ltd
Northern Star (Western Tanami) Pty Ltd
Northern Star (South Kalgoorlie) Pty Ltd
Northern Star (HBJ) Pty Ltd
Northern Star (Hampton Gold Mining Areas) Limited
Northern Star (Holdings) Pty Ltd
Northern Star (Alaska) Incorporated
Northern Star (Alaska) LLC
Northern Star (Pogo) LLC
Northern Star (Pogo Two) LLC
Stone Boy Inc.
Northern Star (KLV) Pty Ltd
Kalgoorlie Consolidated Gold Mines Pty Ltd
Northern Star (Bronzewing) Pty Ltd
Northern Star (Yandal Consolidated) Pty Ltd
Northern Star (Echo Mining) Pty Ltd
Northern Star (MKO) Pty Ltd
Northern Star (Saracen Kalgoorlie) Pty Ltd
Northern Star (Carosue Dam) Pty Ltd
Northern Star (Thunderbox) Pty Ltd
Northern Star (Saracen) Pty Ltd
Northern Star (Saracen Goldfields) Pty Ltd
Northern Star (Bundarra) Pty Ltd
Northern Star (SR Mining) Pty Ltd
Northern Star (Sinclair) Pty Ltd
Northern Star (Talisman) Pty Ltd
Country of
incorporation
Ownership interest held by
the Group
2021
%
2020
%
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
England &
Wales
Australia
United States of
America
United States of
America
United States of
America
United States of
America
United States of
America
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
50.0
100.0
100.0
100.0
100.0
-
-
-
-
-
-
-
-
-
177
For information regarding entities party to a deed of cross guarantee refer to note 23.
NORTHERN STAR RESOURCES LIMITED ANNUAL REPORT 2021NORTHERN STAR RESOURCES LIMITED ANNUAL REPORT 2021 FInancIal RepoRt
FInancIal RepoRt
(b) Joint arrangements
FMG JV
Mt Clement JV
East Kundana Production JV
Kanowna West JV
Kalbara JV
West Kundana JV
Zebina JV
Acra JV
Robertson JV
Cheroona JV
KCGM
Sorrento JV
Jundee JV
Phantom Well JV
Nexus JV
AngloGold JV
Interests in other entities
Further details
Principal Activities
Exploration
Exploration
Exploration & Production
Exploration
Exploration
Exploration
Exploration
Exploration
Exploration
Exploration
Exploration & Production
Exploration
Exploration
Exploration
Exploration
Exploration
Ownership interest held
2020
%
66.73
20.00
51.00
89.95
71.39
75.50
80.00
75.00
40.00
30.00
50.00
70.00
70.00
-
-
-
2021
%
67.72
0
51.00
92.42
71.42
75.50
80.00
75.00
40.00
30.00
100
70.00
70.00
86.98
10.00
30.00
This section of the notes includes other information that must be disclosed to comply with the accounting standards
and other pronouncements, but that is not immediately related to individual line items in the financial statements.
16 Contingent liabilities
(a) Contingent liabilities
The Group had no contingent liabilities at 30 June 2021.
17 Commitments
(a) Capital commitments
Significant capital expenditure contracted for at the end of the reporting year but not recognised as liabilities is as
follows:
Property, plant and equipment
30 June
2021
$M
30 June
2020
$M
266.5
38.1
The joint arrangements listed above are classified as joint operations and are not separate legal entities. They are
contractual arrangements between participants for the sharing of costs and outputs and do not themselves
generate revenue and profit. The joint operations are of the type where initially one party contributes tenements
with the other party earning a specified percentage by funding exploration activities; thereafter the parties often
share exploration and development costs and output in proportion to their ownership of joint venture assets. The joint
operations are accounted for in accordance with the Group's accounting policy set out in note 25.
30 June 2021 capital commitments includes $153.6 million in relation to KCGM mining fleet upgrade and $23.3 million
in relation to the Thunderbox mill expansion.
(b) Gold delivery commitments
Australian dollar gold delivery commitments as at 30 June 2021 were as follows:
178
Gold for
physical
delivery
(Ounces)
502,570
299,000
Weighted
average
contracted
sales price
(A$/oz)
2,290
2,278
Value of
committed
sales
(A$M)
1,150.9
618.2
179
Within one year
Later than one year but not later than five years
There were no US dollar gold delivery commitments as at 30 June 2021.
18 Events occurring after the reporting period
Subsequent to the period ended 30 June 2021 the Company announced:
•
a final fully franked dividend of 9.5 cents per share to Shareholders on the record date of 7 September 2021,
payable on 29 September 2021
• On 22 July 2021 the Group announced that it has entered into a binding Share and Asset Sale Agreement with
Evolution Mining Ltd (ASX: EVN) for the sale of Northern Star’s Kundana Operations, its 51% interest in each of the
East Kundana Production Joint Venture and the East Kundana Exploration Joint Venture, its 75% interest in the
West Kundana Farmin Joint Venture, and the Carbine / Carnage gold project ("Kundana Assets") for a purchase
price of $400 million cash (plus a working capital adjustment). Evolution offered employment contracts to and
assumed liabilities for all of Northern Star’s transferring employees. The transaction completed on 18 August 2021
with Evolution taking economic ownership from 1 August 2021. As at 30 June 2021 the Kundana Assets had a net
asset value of $139.0 million. Refer to note 14 for details and treatment of the transaction as at 30 June 2021.
• On 2 August 2021, the Company entered into a contract with GR Engineering Services Limited (GNG) in relation
to the Thunderbox 6Mtpa expansion project for a contract sum of $101 million.
19 Related party transactions
(a) Subsidiaries
Interests in subsidiaries are set out in note 15(a).
NORTHERN STAR RESOURCES LIMITED ANNUAL REPORT 2021NORTHERN STAR RESOURCES LIMITED ANNUAL REPORT 2021 FInancIal RepoRt
FInancIal RepoRt
Related party transactions
Share-based payments
(b) Key management personnel compensation
Short-term employee benefits
Employee entitlements
Post-employment benefits
Share-based payments
30 June
2021
$000
6,911.2
116.9
242.4
7,114.3
14,384.8
30 June
2020
$000
4,829.3
528.9
201.7
3,282.3
8,842.2
(c) Transactions with other related parties
(i)
Purchases from entities controlled by key management personnel
The Company has in place policies and procedures which govern transactions involving KMPs and their related
parties, and these policies and procedures restrict the involvement of the KMP or related party in the negotiation,
awarding or direct management of the resultant contract. In the Company’s 2017 Annual Report, specifically Note
18 to the Consolidated Financial Statements, the Company reported that the beneficial minority interest of 23% held
by Mr Beament in AUD Pty Ltd, the sole shareholder of Australian Underground Drilling Pty Ltd (AUD), being a supplier
of goods and services to the Company, did not require reporting under the Accounting Standards. For the purposes
of the FY21 Annual Report, the Company is of the same view, having applied the necessary criteria under the
Australian Accounting Standards for FY21. Mr Beament retired from the Company and Board on 1 July 2021.
AUD is a material supplier due to the aggregate total of fees paid, the nature of the services provided to the
Company by the supplier, and the place the supplier has in the Company’s risk mitigation strategy, in seeking to
maintain diversity amongst its suppliers where it is commercially feasible to do so, to ensure that there is no reliance
by the Company on one supplier for a particular service across all the Company’s operations.
The Independent Directors’ unanimous view on 30 June 2021 remained that the continuing contractual relationship
between the Company and AUD was during FY21 more beneficial to the Company than terminating the contract
would have been. The results of the multiple party tender processes have demonstrated that there was no
comparable supplier with the capacity at the time of the tenders to provide the services for the same quality,
productivity rates and price offered by AUD. Further, the selection of AUD was and remains consistent with the
Company- wide risk mitigation strategy in striving for diversity in its supply chain, having regard to the other suppliers
providing underground diamond drilling services to the Company’s other operations (in which Mr Beament has no
shareholding or other basis for inferring a significant influence). The addition of Pogo,100% of the KCGM Operations,
Carosue Dam Operations and Thunderbox Operations further increased the diversity and improved the risk
mitigation strategy.
The following transaction occurred with relates parties:
Shirley In'tVeld:
•
is a board member of CSIRO. During the year, a revenue amount of $59,101 was paid to this business for
consulting services provided at normal commercial rates (2020: $216,729).
20 Share-based payments
(a) Employee Share Plan
Under the Employee Share Plan, eligible employees may be granted up to $1,000 of fully paid ordinary shares in the
Company annually for no cash consideration. The number of shares issued to participants in the scheme is the offer
amount divided by the weighted average price at which the Company’s shares are traded on the ASX during the
week up to and including the date of grant. The fair value of shares issued during the year was $9.90 (2020: $12.71)
per share.
2021
2020
Number of shares issued under the plan to participating employees on 17 June
2021 (2020: 26 June)
244,000
102,258
180
(b) Performance Share Plan
No performance shares were issued in the year ended 30 June 2021 (2020: Nil).
Total performance shares on issue at 30 June 2021 is 1,091,001 (2020: 1,091,001), with a corresponding total
non-recourse loan value of $801,295 (2020: $1,114,557).
(c) Performance Rights, NED Share Rights and Restricted Shares
Performance rights
A performance right is a conditional right which, upon the satisfaction or waiver of the relevant vesting conditions,
and, if required by the Company the exercise of that right, entitles its holder to receive one share.
During the year, the Company issued 1,155,477 long term incentive (LTI) rights and 489,671 short term incentive (STI)
rights to senior management, including key management personnel. The rights were issued under the FY20 share
plan as refreshed at the Company's annual general meeting on 25 November 2020. During the year, 245,266 FY2021
LTI rights and 14,801 FY2021 STI rights were forfeited. The number of performance rights outstanding as at 30 June
2021 in relation to the FY2021 grant is 1,385,081.
During the prior year, the Company issued 1,202,463 LTI rights (1,129,894 remain on issue at 30 June 2021) and 494,422
STI rights (nil on issue at 30 June 2021) to senior management, including key management personnel. The rights were
issued under the FY20 share plan as approved at the Company's annual general meeting on 14 November 2020.
Since grant date, 72,569 FY2020 LTI rights and 9,203 FY2020 STI rights were forfeited, while 196,470 FY2020 STI rights
vested.
NED Share Rights
A NED share right is a conditional right to a fully paid ordinary share, where vesting is measured on 30 June in each
financial year of issue, based on the length of time the NED was on the Board, with pro-rata reduction where the
Director ceases to be a director before the end of the relevant financial year.
During the year, the Company issued 18,560 NED share rights to Non-executive Directors. The NED share rights were
issued under the FY20 NED share plan as approved at the Company's annual general meeting on 14 November
2020. During the year 1,403 NED share rights were forfeited. The number of NED share rights outstanding as at 30 June
2021 in relation to the FY2021 grant is 17,157.
During the prior year, the Company issued 24,845 NED share rights to Non-executive Directors. The rights were issued
under the FY20 NED share plan as approved at the Company's annual general meeting on 14 November 2020. All of
the FY 2020 NED share rights have vested.
181
Restricted Shares
Restricted shares are time-tested shares under holding lock with no performance conditions other than remaining
employed by a certain date.
No restricted shares were issued during the current year.
During the prior year, 150,000 restricted shares (all of which remain on issue at 30 June 2021) were issued under the
FY20 Retention Share Plan.
For each of the above grants, the weighted average assessed fair value at grant date is as follows:
LTI Performance Rights
STI Performance Rights
NED Share Rights
Restricted Shares
Weighted average fair value at
grant date
FY2021 grant
$11.15
$14.26
$14.74
n/a
FY2020 grant
$7.04
$10.26
$9.21
$14.64
NORTHERN STAR RESOURCES LIMITED ANNUAL REPORT 2021NORTHERN STAR RESOURCES LIMITED ANNUAL REPORT 2021 FInancIal RepoRt
FInancIal RepoRt
(c) Performance Rights, NED Share Rights and Restricted Shares (continued)
(c) Performance Rights, NED Share Rights and Restricted Shares (continued)
Share-based payments
Share-based payments
The fair value of LTI performance rights at grant date is independently determined using a Monte Carlo simulation
model (market based vesting conditions) and a Black Scholes Model (non market vesting conditions) that takes into
account the term of the performance rights, the impact of dilution (where material), the share price at grant date
and expected volatility of the underlying share, the expected dividend yield, the risk-free rate for the term of the
performance right and the correlations and volatilities of the peer group companies.
The model inputs for LTI performance rights granted during the current and prior year included:
FY21 LTI Rights - Grant 1
(a) Exercise price
(b) Grant date
(c) Commencement of performance period
(d) Expiry date
(e) Share price at grant date
(f) Expected volatility of the company's shares
(g) Expected volatility of the index
(h) Expected dividend yield
(i) Risk-free interest rate
FY21 LTI Rights - Grant 2
(a) Exercise price
(b) Grant date
(c) Commencement of performance period
(d) Expiry date
(e) Share price at grant date
(f) Expected volatility of the company's shares
(g) Expected volatility of the index
(h) Expected dividend yield
(i) Risk-free interest rate
Tranche A, C
Nil
25/11/2020
1/07/2020
30/06/2023
$12.52
50%
n/a
1.30%
0.13%
Tranche A, C
Nil
2/02/2021
12/02/2021
30/06/2023
$13.06
50%
n/a
1.30%
0.11%
Tranche B
Nil
25/11/2020
1/07/2020
30/06/2023
$12.52
50%
35%
1.30%
0.13%
Tranche B
Nil
2/02/2021
12/02/2021
30/06/2023
$13.06
50%
35%
1.30%
0.11%
Tranche D, F
Nil
30/10/2020
1/07/2020
30/06/2023
$14.85
50%
n/a
1.30%
0.13%
Tranche D, F
Nil
12/02/2021
12/02/2021
30/06/2023
$12.06
50%
n/a
1.30%
0.11%
Tranche E
Nil
30/10/2020
1/07/2020
30/06/2023
$14.85
50%
35%
1.30%
0.13%
Tranche E
Nil
12/02/2021
12/02/2021
30/06/2023
$12.06
50%
35%
1.30%
0.11%
182
FY20 LTI Rights
(a) Exercise price
(b) Grant date
(c) Commencement of performance period
(d) Expiry date
(e) Share price at grant date
(f) Expected volatility of the company's shares
(g) Expected dividend yield
(h) Risk-free interest rate
Tranche A, B, C
Nil
14/11/2019
1/07/2019
30/06/2022
$9.21
40%
1.51%
0.74%
Tranche D, E, F
Nil
20/12/2019
1/07/2019
30/06/2022
$10.70
40%
1.51%
0.85%
The fair value of STI performance rights, NED share rights and Restricted Shares at grant date is determined by
reference to the share price on grant date.
The valuation inputs for STI performance rights, NED share rights and Restricted Shares granted during the current
and prior year included:
(a) Exercise price
(b) Grant date
(c) Commencement of performance period
(d) Expiry date
(e) Share price at grant date
FY21 STI Rights
Tranche A
Nil
25/11/20
1/7/20
30/6/21
$12.52
Tranche B
Nil
30/10/20
1/7/20
30/6/21
$14.85
FY21 NED Share
Rights
Nil
13/07/2020
1/7/20
30/6/21
$14.74
(a) Exercise price
(b) Grant date
(c) Commencement of performance period
(d) Expiry date
(e) Share price at grant date
FY20 STI Rights
Tranche A
Nil
14/11/2019
1/07/2019
30/06/2021
$9.21
Tranche B
Nil
20/12/2019
1/07/2019
30/06/2021
$10.70
Restricted
Shares
Nil
25/05/2020
1/06/2020
30/06/2021
$14.64
FY20 NED Share
Rights
Nil
14/11/2019
1/07/2019
30/06/2020
$9.21
The expected volatility is based on the historic volatility over a period comparable to the remaining life of the
performance rights.
Total share based payments expense for the year ended 30 June 2021 was $13.0 million (2020: $7.9 million)
21 Remuneration of auditors
During the year the following fees were paid or payable for services provided by the auditor of the parent entity,
Northern Star Resources Limited, its related practices and non-related audit firms:
(a) Deloitte Touche Tohmatsu
(i) Audit and other assurance services
Audit and other assurance services
Subsidiaries & joint arrangements
Group
Total remuneration for audit and other assurance services
(ii) Other services
Statutory assurance services required by legislation to be provided by the auditor
Consulting services
Total remuneration for other services
2021
$000
23.6
748.3
771.9
57.8
-
57.8
2020
$000
33.1
548.2
581.3
53.9
31.5
85.4
183
Total remuneration of Deloitte Touche Tohmatsu
829.7
666.7
(b) Other auditors and their related network firms
(i) Audit and other assurance services
Audit and review of financial statements
5.0
77.0
Total auditors' remuneration
834.7
743.7
It is the Group's policy to employ Deloitte Touche Tohmatsu on assignments additional to their statutory audit duties
where Deloitte Touche Tohmatsu expertise and experience with the Group are important. These assignments are
principally tax advice and due diligence reporting on acquisitions, or where Deloitte Touche Tohmatsu is awarded
assignments on a competitive basis. It is the Group's policy to seek competitive tenders for all major consulting
projects.
NORTHERN STAR RESOURCES LIMITED ANNUAL REPORT 2021NORTHERN STAR RESOURCES LIMITED ANNUAL REPORT 2021 FInancIal RepoRt
FInancIal RepoRt
22 Earnings per share
Basic earnings per share is calculated by dividing:
• the profit attributable to owners of the Company
• by the weighted average numbers of ordinary shares outstanding during the financial year, excluding treasury
shares.
Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into
account:
• the after income tax effect of interest and other financing costs associated with dilutive potential ordinary shares,
and
• the weighted average number of additional ordinary shares that would have been outstanding assuming the
conversion of all dilutive potential ordinary shares.
(a) Basic earnings per share
From continuing operations attributable to the ordinary equity holders of the
company
Total basic earnings per share attributable to the ordinary equity holders of the
Company
(b) Diluted earnings per share
184
From continuing operations attributable to the ordinary equity holders of the
company
Total diluted earnings per share attributable to the ordinary equity holders of the
Company
(c) Reconciliation of earnings used in calculating earnings per share
30 June
2021
Cents
30 June
2020
Cents
114.7
114.7
37.3
37.3
30 June
2021
Cents
30 June
2020
Cents
114.3
114.3
37.2
37.2
30 June
2021
$M
30 June
2020
$M
Basic earnings per share
Profit/(loss) attributable to the ordinary equity holders of the Company used in
calculating basic earnings per share:
From continuing operations
1,032.5
258.3
Diluted earnings per share
Profit from continuing operations attributable to the ordinary equity holders of the
Company
Used in calculating basic earnings per share
1,032.5
258.3
(d) Weighted average number of shares used as the denominator
Weighted average number of ordinary shares used as the denominator in
calculating basic earnings per share
Earnings per share
2021
Number
2020
Number
900,489,284
692,635,283
Adjustments for calculation of diluted earnings per share:
Rights
Weighted average number of ordinary and potential ordinary shares used as the
denominator in calculating diluted earnings per share
3,094,790
2,623,651
903,584,074
695,258,934
23 Deed of cross guarantee
The Australian incorporated subsidiaries detailed in note 15 are each a party to a Deed of Cross Guarantee dated
14 May 2014, as varied (Deed), and have the benefit of ASIC relief from the requirements to prepare and lodge with
ASIC audited financial reports in accordance with Part 2M.3 of the Corporations Act, pursuant to ASIC Corporations
(Wholly-owned Companies) Instrument 2016/785 dated 17 December 2016 (Instrument).
Under the Deed, each entity in the Group guarantees to each creditor payment in full of any debt in the event of
winding up of any of the entities under certain provisions of the Corporations Act. In the event of a winding up of an
entity under other provisions of the Corporations Act, the other entities in the Group will only be liable to make up
any shortfall of funds if after six months any creditor has not been paid in full. The effect of the covenants given by
the entities under the Deed is to make the Company Group akin to a single legal entity from a financial perspective.
Closed Group:
Northern Star Resources Limited;
Northern Star (Kanowna) Pty Limited;
•
•
• Gilt-Edged Mining Pty Limited;
Kundana Gold Pty Limited;
•
Northern Star (HBJ) Pty Ltd;
•
Northern Star (Holdings) Pty Ltd;
•
Northern Star (South Kalgoorlie) Pty Ltd;
•
Northern Star Mining Services Pty Limited;
•
Northern Star (KLV) Pty Limited;
•
Northern Star (Saracen) Pty Ltd;
•
Northern Star (Saracen Kalgoorlie) Pty Ltd;
•
Northern Star (Carosue Dam) Pty Ltd; and
•
Northern Star (Thunderbox) Pty Ltd;
•
Extended Closed Group:
• GKL Properties Pty Limited;
•
•
•
•
•
•
•
•
•
•
•
•
•
•
EKJV Management Pty Limited;
Kanowna Mines Pty Limited;
Northern Star (Tanami) Pty Ltd;
Northern Star (Western Tanami) Pty Limited;
Northern Star (Bronzewing) Pty Ltd;
Northern Star (Yandal Consolidated) Pty Ltd;
Northern Star (Echo Mining) Pty Ltd;
Northern Star (MKO) Pty Ltd;
Northern Star (Saracen Goldfields) Pty Ltd;
Northern Star (Bundarra) Pty Ltd;
Northern Star (SR Mining) Pty Ltd;
Northern Star (Sinclair) Pty Ltd;
Northern Star (Talisman) Pty Ltd; and
Kalgoorlie Consolidated Gold Mines Pty Ltd
185
NORTHERN STAR RESOURCES LIMITED ANNUAL REPORT 2021NORTHERN STAR RESOURCES LIMITED ANNUAL REPORT 2021 FInancIal RepoRt
FInancIal RepoRt
Deed of cross guarantee
Parent entity financial information
(e) Determining the parent entity financial information (continued)
(ii)
Tax consolidation legislation
Northern Star Resources Limited and its wholly-owned Australian controlled entities have implemented the tax
consolidation legislation.
The head entity, Northern Star Resources Limited, and the controlled entities in the tax consolidated Group account
for their own current and deferred tax amounts. These tax amounts are measured as if each entity in the tax
consolidated Group continues to be a stand-alone taxpayer in its own right.
In addition to its own current and deferred tax amounts, Northern Star Resources Limited also recognises the current
tax liabilities (or assets) and the deferred tax assets arising from unused tax losses and unused tax credits assumed
from controlled entities in the tax consolidated Group.
The entities have also entered into a tax funding agreement under which the wholly-owned entities fully
compensate Northern Star Resources Limited for any current tax payable assumed and are compensated by
Northern Star Resources Limited for any current tax receivable and deferred tax assets relating to unused tax losses
or unused tax credits that are transferred to Northern Star Resources Limited under the tax consolidation legislation.
The funding amounts are determined by reference to the amounts recognised in the wholly-owned entities’
financial statements.
The amounts receivable/payable under the tax funding agreement are due upon receipt of the funding advice
from the head entity, which is issued as soon as practicable after the end of each financial year. The head entity
may also require payment of interim funding amounts to assist with its obligations to pay tax instalments.
Assets or liabilities arising under tax funding agreements with the tax consolidated entities are recognised as current
amounts receivable from or payable to other entities in the Group.
Any difference between the amounts assumed and amounts receivable or payable under the tax funding
agreement are recognised as a contribution to (or distribution from) wholly-owned tax consolidated entities.
187
The above companies represent the ‘closed group’ and the 'extended closed group' for the purposes of instrument
2016/785, which represent the entities who are parties to the deed of cross guarantee and which are controlled by
Northern Star Resources Limited. Note that since the balance date, a deed of revocation has been executed to
remove the following entities from the closed group and extended closed group (as the case may be) effective 18
August 2021, as part of the completion of the sale of the Kundana assets to Evolution Mining Limited: Gilt-Edged
Mining Pty Limited, Kundana Gold Pty Limited, and EKJV Management Pty Limited.
With the exception of the amounts relating to Pogo's operations as disclosed at note 2, the consolidated statement
of profit or loss and other comprehensive income and statement of financial position for the closed group is
materially consistent with those of the consolidated entity.
24 Parent entity financial information
(a) Summary financial information
The individual financial statements for the parent entity, Northern Star Resources Limited, show the following
aggregate amounts:
Balance sheet
Current assets
Non-current assets
Total assets
Current liabilities
Non-current liabilities
Total liabilities
Shareholders' equity
Issued capital
Reserves
186
Financial assets at fair value through OCI
Cash flow hedges
Share-based payments
Share of other comprehensive income of associates and joint ventures
accounted for using the equity method
Retained earnings
Profit for the year
30 June
2021
$M
30 June
2020
$M
445.6
7,121.2
7,566.8
(206.4)
(1,081.6)
(1,288.0)
766.3
1,974.7
2,741.1
(405.2)
(746.2)
(1,151.5)
6,436.1
1,323.9
11.2
0.4
15.6
0.1
(184.5)
(144.2)
(15.1)
-
10.4
0.2
270.2
86.3
Total comprehensive income
(172.1)
78.2
(b) Guarantees entered into by the parent entity
Refer to note 23 for details of guarantees entered into by the parent entity in relation to the debts of its subsidiaries.
(c) Contingent liabilities of the parent entity
Refer to note 16 for details of contingent liabilities relating to the parent entity as at 30 June 2021 or 30 June 2020.
(d) Contractual commitments for the acquisition of property, plant or equipment
Refer to note 17 for commitments of the Group for the acquisition of property, plant and equipment as at 30 June
2021 or 30 June 2020.
(e) Determining the parent entity financial information
The financial information for the parent entity, Northern Star Resources Limited, has been prepared on the same
basis as the consolidated financial statements, except as set out below.
(i)
Investments in subsidiaries, associates and joint venture entities
Investments in subsidiaries, associates and joint venture entities are accounted for at cost in the financial statements
of Northern Star Resources Limited.
NORTHERN STAR RESOURCES LIMITED ANNUAL REPORT 2021NORTHERN STAR RESOURCES LIMITED ANNUAL REPORT 2021 FInancIal RepoRt
FInancIal RepoRt
25 Summary of significant accounting policies
This note provides a list of the significant accounting policies adopted in the preparation of these consolidated
financial statements to the extent they have not already been disclosed in the other notes above. These policies
have been consistently applied to all the years presented, unless otherwise stated. The financial statements are for
the Group consisting of Northern Star Resources Limited and its subsidiaries.
(a) Basis of preparation
These general purpose financial statements have been prepared in accordance with Australian Accounting
Standards and Interpretations issued by the Australian Accounting Standards Board and the Corporations Act 2001.
Northern Star Resources Limited is a for-profit entity for the purpose of preparing the financial statements.
(i) Compliance with IFRS
Compliance with Australian Accounting Standards ensures that the financial statements and notes of the Company
and the Group complies with international financial reporting standards (IFRS).
(ii) Historical cost convention
The financial statements have been prepared on a historical cost basis, except for the following:
•
financial assets at fair value through other comprehensive income, financial assets and liabilities (including
derivative instruments); and
(iii) New and amended standards adopted by the group
The Group has adopted all of the new, revised or amending Accounting Standards and Interpretations issued by the
Australian Accounting Standards Board ('AASB') that are mandatory for the current reporting period.
With the exception of AASB 2018-6 Amendments to Australian Accounting Standards - Definition of a Business, any
new, revised or amending Accounting Standards or Interpretations that are not yet mandatory have not been early
adopted. Refer to note for details of changes to accounting policies in the current financial year.
Any significant impact of the accounting policies of the Group from the adoption of these Accounting Standards
and Interpretations are disclosed below.
Summary of significant accounting policies
(b) Principles of consolidation
(i)
Subsidiaries
Subsidiaries are all entities (including structured entities) over which the Group has control. The Group controls an
entity where the Group is exposed to, or has rights to, variable returns from its involvement with the entity and has
the ability to affect those returns through its power to direct the activities of the entity. Subsidiaries are fully
consolidated from the date on which control is transferred to the Group. They are deconsolidated from the date
that control ceases.
Intercompany transactions, balances and unrealised gains and losses on transactions between Group companies
are eliminated.
The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of Northern Star
Resources Limited ('Company' or 'parent entity') as at 30 June 2021 and the results of all subsidiaries for the year then
ended. Northern Star Resources Limited and its subsidiaries together are referred to in this financial report as the
Group or the consolidated entity.
(ii)
Joint arrangements
Under AASB 11 Joint Arrangements investments in joint arrangements are classified as either joint operations or joint
ventures. The classification depends on the contractual rights and obligations of each investor, rather than the legal
structure of the joint arrangement. Northern Star Resources Limited has only joint operations. A joint operation is a
joint arrangement whereby the parties that have joint control of the arrangement have rights to the assets, and
obligations for the liabilities, relating to the arrangement. Joint control is the contractually agreed sharing of control
of an arrangement, which exists only when decisions about the relevant activities require unanimous consent of the
parties sharing control.
Joint operations
Northern Star Resources Limited Limited recognises its direct right to the assets, liabilities, revenues and expenses of
joint operations and its share of any jointly held or incurred assets, liabilities, revenues and expenses. These have
been incorporated in the financial statements under the appropriate headings. Details of the joint operation are set
out in note 15(b).
(iv) Accounting Standards issued but not yet effective
(iii) Changes in ownership interests
188
The following changes in Accounting Standards have been issued but are not yet effective:
AASB 16 Property, Plant and Equipment. A change to the treatment of proceeds which are received from selling
gold recovered from a mine before that mine is considered capable of operating in the manner intended by
management (i.e. pre-commercial production). Under the current guidelines, in respect of pre commercial
production, revenue and the associated cost of sale is excluded from profit or loss (earnings) and are included in
capital (balance sheet) and offset against the costs of developing the mine.
The changes referred to above must be adopted by the Group from 1 July 2022, including the required restatement
of comparatives for mines that were deemed in pre commercial production phase before 1 July 2021 (being the
start of the earliest comparative period).
The changes will require sales proceeds, along with their cost of sale, to be recognised in profit or loss (earnings). The
cost of sale must be determined with respect to the accounting rules for measurement of inventory. This will require
the Company to allocate some of the costs during the pre-commercial production phase to operating activities
(producing saleable gold), whereas under the current guidelines all such costs have been treated as capital. As
required by Accounting Standards, depreciation of mine properties will continue to only commence when an asset
is placed into commercial production. Consequently, cost of sales expensed on sale of gold during a
pre-commercial production phase will not include depreciation charges.
The required changes outlined above are expected to increase revenues and bring forward the recognition of costs
to the income statement (which may increase or decrease profit and loss depending on whether the revenues
generated are greater than the costs of sale). Over the life of a mining project the net impact to profit and loss will
be nil, however the proportional allocation of expenses between mining, processing and other costs and
depreciation will alter due to the change in treatment outlined above. The impact of the changes outlined on the
opening comparative amounts at 1 July 2021 for mines not in commercial production at that date have not yet
been determined.
The Group treats transactions with non-controlling interests that do not result in a loss of control as transactions with
equity owners of the Group. A change in ownership interest results in an adjustment between the carrying amounts
of the controlling and non-controlling interests to reflect their relative interests in the subsidiary. Any difference
between the amount of the adjustment to non-controlling interests and any consideration paid or received is
recognised in a separate reserve within equity attributable to owners of Northern Star Resources Limited.
189
When the Group ceases to consolidate or equity account for an investment because of a loss of control, joint
control or significant influence, any retained interest in the entity is remeasured to its fair value with the change in
carrying amount recognised in profit or loss. This fair value becomes the initial carrying amount for the purposes of
subsequently accounting for the retained interest as an associate, joint venture or financial asset. In addition, any
amounts previously recognised in other comprehensive income in respect of that entity are accounted for as if the
Group had directly disposed of the related assets or liabilities. This may mean that amounts previously recognised in
other comprehensive income are reclassified to profit or loss.
(c) Foreign currency translation
(i)
Functional and presentation currency
Items included in the financial statements of each of the Group's entities are measured using the currency of the
primary economic environment in which the entity operates ('the functional currency'). The consolidated financial
statements are presented in Australian dollar ($), which is Northern Star Resources Limited's functional and
presentation currency.
(d) Business combinations
The acquisition method of accounting is used to account for all business combinations, regardless of whether equity
instruments or other assets are acquired. The consideration transferred for the acquisition of a subsidiary comprises
the
•
•
•
fair values of the assets transferred
liabilities incurred to the former owners of the acquired business
equity interests issued by the Group
NORTHERN STAR RESOURCES LIMITED ANNUAL REPORT 2021NORTHERN STAR RESOURCES LIMITED ANNUAL REPORT 2021 FInancIal RepoRt
FInancIal RepoRt
(d) Business combinations (continued)
(e) Impairment of assets (continued)
Summary of significant accounting policies
Summary of significant accounting policies
•
•
fair value of any asset or liability resulting from a contingent consideration arrangement, and
fair value of any pre-existing equity interest in the subsidiary.
Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are, with
limited exceptions, measured initially at their fair values at the acquisition date. The Group recognises any
non-controlling interest in the acquired entity on an acquisition-by-acquisition basis either at fair value or at the
non-controlling interest’s proportionate share of the acquired entity’s net identifiable assets.
Acquisition-related costs are expensed as incurred.
The excess of the:
•
•
•
consideration transferred,
amount of any non-controlling interest in the acquired entity, and
acquisition-date fair value of any previous equity interest in the acquired entity
over the fair value of the net identifiable assets acquired is recorded as goodwill. If those amounts are less than the
fair value of the net identifiable assets of the business acquired, the difference is recognised directly in profit or loss
as a bargain purchase.
Where settlement of any part of cash consideration is deferred, the amounts payable in the future are discounted to
their present value as at the date of exchange. The discount rate used is the entity’s incremental borrowing rate,
being the rate at which a similar borrowing could be obtained from an independent financier under comparable
terms and conditions.
Contingent consideration is classified either as equity or a financial liability. Amounts classified as a financial liability
are subsequently remeasured to fair value with changes in fair value recognised in profit or loss.
If the business combination is achieved in stages, the acquisition date carrying value of the acquirer’s previously
held equity interest in the acquiree is remeasured to fair value at the acquisition date. Any gains or losses arising from
such remeasurement are recognised in profit or loss.
The excess of the consideration transferred and the amount of any non-controlling interest in the acquiree over the
fair value of the net identifiable assets acquired is recorded as goodwill. If those amounts are less than the fair value
of the net identifiable assets of the subsidiary acquired and the measurement of all amounts has been reviewed, the
difference is recognised directly in profit or loss as a bargain purchase.
(e) Impairment of assets
At each reporting date, the Group reviews the carrying amounts of its tangible and other intangible assets to
determine whether there is any indication that those assets might be impaired. If any such indication exists, the
recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any) which is
the amount by which the assets carrying value exceeds its recoverable amount. Where the asset does not generate
cash in-flows that are independent from other assets, the Group estimates the recoverable amount of the
cash-generating unit (CGU) to which the asset belongs.
The recoverable amount is the higher of fair value less costs to sell (FVLCS) and value in use. In assessing value in use,
the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects
current market assessments of the time value of money and the risks specific to the asset for which the estimates of
future cash flows have not been adjusted.
If the recoverable amount of an asset (or CGU) is estimated to be less than its carrying amount, the carrying amount
of the asset (or CGU) is reduced to its recoverable amount. An impairment loss is recognised in profit or loss
immediately.
Where an impairment loss subsequently reverses for assets other than goodwill, the carrying amount of the asset (or
CGU) is increased to the revised estimate of its recoverable amount, but only to the extent that the increased
carrying amount does not exceed the carrying amount that would have been determined had no impairment loss
been recognised for the asset (or CGU) in prior years. A reversal of an impairment loss is recognised in profit or loss
immediately.
190
Estimates of quantities of recoverable minerals, production levels, operating costs and capital requirements are
sourced from out planning process, including the LOM plans, five-year plans, one-year budgets and CGU-specific
studies.
The determination of FVLCS for each CGU are considered to be Level 3 fair value measurements, as they are
derived from valuation techniques that include inputs that are not based on observable market data. The Group
considers the inputs and the valuation approach to be consistent with the approach taken by market participants.
(f) Non-current assets (or disposal groups) held for sale and discontinued operations
Non-current assets (or disposal groups) are classified as held for sale if their carrying amount will be recovered
principally through a sale transaction rather than through continuing use and a sale is considered highly probable.
They are measured at the lower of their carrying amount and fair value less costs to sell, except for assets such as
deferred tax assets, assets arising from employee benefits, financial assets and investment property that are carried
at fair value and contractual rights under insurance contracts, which are specifically exempt from this requirement.
An impairment loss is recognised for any initial or subsequent write-down of the asset (or disposal group) to fair value
less costs to sell. A gain is recognised for any subsequent increases in fair value less costs to sell of an asset (or
disposal group), but not in excess of any cumulative impairment loss previously recognised. A gain or loss not
previously recognised by the date of the sale of the non-current asset (or disposal group) is recognised at the date
of derecognition.
Non-current assets (including those that are part of a disposal group) are not depreciated or amortised while they
are classified as held for sale. Interest and other expenses attributable to the liabilities of a disposal group classified
as held for sale continue to be recognised.
Non-current assets classified as held for sale and the assets of a disposal group classified as held for sale are
presented separately from the other assets in the balance sheet. The liabilities of a disposal group classified as held
for sale are presented separately from other liabilities in the balance sheet.
A discontinued operation is a component of the entity that has been disposed of or is classified as held for sale and
that represents a separate major line of business or geographical area of operations, is part of a single co-ordinated
plan to dispose of such a line of business or area of operations, or is a subsidiary acquired exclusively with a view to
resale. The results of discontinued operations are presented separately in the statement of profit or loss. The assets
classified as held for sale as at 30 June 2021, as disclosed at note 14, do not represent a separate major line of
business or geographical area of operations and therefore are not deemed to be a discontinued operation.
191
(g) Investments and other financial assets
(i) Classification
The Group classifies its financial assets in the following measurement categories:
•
•
those to be measured subsequently at fair value (either through OCI or through profit or loss), and
those to be measured at amortised cost.
The classification depends on the entity’s business model for managing the financial assets and the contractual
terms of the cash flows.
For assets measured at fair value, gains and losses will either be recorded in profit or loss or OCI. For investments in
equity instruments that are not held for trading, this will depend on whether the Group has made an irrevocable
election at the time of initial recognition to account for the equity investment at fair value through other
comprehensive income (FVOCI).
The Group reclassifies debt investments when and only when its business model for managing those assets changes.
(ii) Measurement
At initial recognition, the Group measures a financial asset at its fair value plus, in the case of a financial asset not at
fair value through profit or loss (FVPL), transaction costs that are directly attributable to the acquisition of the
financial asset. Transaction costs of financial assets carried at FVPL are expensed in profit or loss.
Financial assets with embedded derivatives are considered in their entirety when determining whether their cash
flows are solely payment of principal and interest.
NORTHERN STAR RESOURCES LIMITED ANNUAL REPORT 2021NORTHERN STAR RESOURCES LIMITED ANNUAL REPORT 2021 FInancIal RepoRt
Summary of significant accounting policies
(g) Investments and other financial assets (continued)
(ii) Measurement (continued)
Debt instruments
Subsequent measurement of debt instruments depends on the Group’s business model for managing the asset and
the cash flow characteristics of the asset. There are three measurement categories into which the Group classifies its
debt instruments:
•
•
•
Amortised cost: Assets that are held for collection of contractual cash flows where those cash flows represent
solely payments of principal and interest are measured at amortised cost. Interest income from these financial
assets is included in finance income using the effective interest rate method. Any gain or loss arising on
derecognition is recognised directly in profit or loss and presented in other gains/(losses) together with foreign
exchange gains and losses. Impairment losses are presented as separate line item in the consolidated
statement of profit or loss.
FVOCI: Assets that are held for collection of contractual cash flows and for selling the financial assets, where the
assets’ cash flows represent solely payments of principal and interest, are measured at FVOCI. Movements in
the carrying amount are taken through OCI, except for the recognition of impairment gains or losses, interest
income and foreign exchange gains and losses which are recognised in profit or loss. When the financial asset is
derecognised, the cumulative gain or loss previously recognised in OCI is reclassified from equity to profit or loss
and recognised in other gains/(losses). Interest income from these financial assets is included in finance income
using the effective interest rate method. Foreign exchange gains and losses are presented in other
gains/(losses) and impairment expenses are presented as separate line item in the consolidated statement of
profit or loss.
FVPL: Assets that do not meet the criteria for amortised cost or FVOCI are measured at FVPL. A gain or loss on a
debt investment that is subsequently measured at FVPL is recognised in profit or loss and presented net within
other gains/(losses) in the period in which it arises.
Equity instruments
192
The Group subsequently measures all equity investments at fair value. Where the Group’s management has elected
to present fair value gains and losses on equity investments in OCI, there is no subsequent reclassification of fair
value gains and losses to profit or loss following the derecognition of the investment. Dividends from such
investments continue to be recognised in profit or loss as other income when the Group’s right to receive payments
is established.
Changes in the fair value of financial assets at FVPL are recognised in other gains/(losses) in the consolidated
statement of profit or loss as applicable. Impairment losses (and reversal of impairment losses) on equity investments
measured at FVOCI are not reported separately from other changes in fair value.
(iii)
Impairment
From 1 July 2020, the Group assesses on a forward looking basis the expected credit losses associated with its debt
instruments carried at amortised cost and FVOCI. The Group applies the simplified approach permitted by AASB 9,
which requires expected lifetime losses to be recognised from initial recognition of the receivables.
(h) Rounding of amounts
The Company is of a kind referred to ASIC Legislative Instrument 2016/191, relating to the 'rounding off' of amounts in
the financial statements. Amounts in the financial statements have been rounded off in accordance with the
instrument to the nearest thousand dollars, or in certain cases, the nearest dollar.
(i) Goods and Services Tax (GST)
Revenues, expenses and assets are recognised net of the amount of associated GST, unless the GST incurred is not
recoverable from the taxation authority. In this case it is recognised as part of the cost of acquisition of the asset or
as part of the expense.
Receivables and payables are stated inclusive of the amount of GST receivable or payable. The net amount of GST
recoverable from, or payable to, the taxation authority is included with other receivables or payables in the
Statement of Financial Position.
Cash flows are presented on a gross basis. The GST components of cash flows arising from investing or financing
activities which are recoverable from, or payable to the taxation authority, are presented as operating cash flows.
193
NORTHERN STAR RESOURCES LIMITED ANNUAL REPORT 2021
ABN: 43 092 832 892 Registered Office: Level 1, 388 Hay Street, Subiaco 6008, Western Australia PO Box 2008, Subiaco 6904, Western Australia Tel: +61 8 6188 2100 Fax: +61 8 6188 2111 Email: info@nsrltd.com Web: www.nsrltd.com DIRECTORS’ DECLARATION In the Directors' opinion: (a) There are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable; (b) The financial statements and notes for the year ended 30 June 2021 set out on pages 133 to 192 (FY21 Financial Report) comply with the Corporations Act 2001 (Cth), the Corporations Regulations 2001, Australian Accounting Standards and international financial reporting standards, and other mandatory professional reporting requirements; (c) The FY21 Financial Report gives a true and fair view of the consolidated entity's financial position as at 30 June 2021 and of its performance for the year ended on that date; and (d) At the date of this declaration, there are reasonable grounds to believe that the members of the extended closed group identified in note 23 will be able to meet any obligations or liabilities to which they are, or may become, subject by the virtue of the deed of cross guarantee described in note 23. Note 25(a) confirms that the financial statements also comply with International Financial Reporting Standards as issued by the International Accounting Standards Board. The Directors have been given the declarations by the Managing Director & Chief Executive Officer and the Chief Financial Officer required by section 295A of the Corporations Act 2001. This declaration is made in accordance with a resolution of Directors. MICHAEL CHANEY Chairman Northern Star Resources Limited 24 August 2021 NORTHERN STAR RESOURCES LIMITED ANNUAL REPORT 2021 FInancIal RepoRt
FInancIal RepoRt
Deloitte Touche Tohmatsu
ABN 74 490 121 060
Tower 2, Brookfield Place
123 St Georges Terrace
Perth WA 6000
GPO Box A46
Perth WA 6837 Australia
Tel: +61 8 9365 7000
Fax: +61 8 9365 7001
www.deloitte.com.au
Independent Auditor’s Report to the members of
Northern Star Resources Limited
RReeppoorrtt oonn tthhee AAuuddiitt ooff tthhee FFiinnaanncciiaall RReeppoorrtt
Opinion
194
We have audited the financial report of Northern Star Resources Limited (the “Company”) and its subsidiaries
(the “Group”) which comprises the consolidated statement of financial position as at 30 June 2021,, the
consolidated statement of profit or loss and other comprehensive income, the consolidated statement of changes
in equity and the consolidated statement of cash flows for the year then ended, and notes to the financial
statements, including a summary of significant accounting policies and other explanatory information, and the
directors’ declaration.
In our opinion, the accompanying financial report of the Group is in accordance with the Corporations Act 2001,
including:
• Giving a true and fair view of the Group’s financial position as at 30 June 2021 and of its financial performance
for the year then ended; and
• Complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for Opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those
standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Report section of
our report. We are independent of the Group in accordance with the auditor independence requirements of the
Corporations Act 2001 and the ethical requirements of the Accounting Professional & Ethical Standards Board’s
APES 110 Code of Ethics for Professional Accountants (including Independence Standards) (the Code) that are
relevant to our audit of the financial report in Australia. We have also fulfilled our other ethical responsibilities in
accordance with the Code.
We confirm that the independence declaration required by the Corporations Act 2001, which has been given to
the directors of the Company, would be in the same terms if given to the directors as at the time of this auditor’s
report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
opinion.
Key Audit Matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit
of the financial report for the current period. These matters were addressed in the context of our audit of the
financial report as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on
these matters.
KKeeyy AAuuddiitt MMaatttteerr
HHooww tthhee ssccooppee ooff oouurr aauuddiitt rreessppoonnddeedd ttoo tthhee KKeeyy AAuuddiitt MMaatttteerr
AAccqquuiissiittiioonn ooff SSaarraacceenn MMiinneerraall HHoollddiinnggss
LLiimmiitteedd
Effective 12 February 2021, the Group
acquired 100% of the share capital of
Saracen Mineral Holdings Limited.
Significant judgement was required in
assessing the appropriateness of the
allocation of consideration transferred to
certain identifiable assets acquired, and
liabilities assumed, including:
•
•
•
•
•
non-current ore stockpiles which relies
upon judgements in relation to ore
volumes and grades, future processing
costs, future gold price estimates and
discount rate assumptions;
property, plant and equipment which
requires assessment of value
allocation between certain asset
classes, judgements relating to useful
lives and assumed residual values;
the provision for rehabilitation, which
is dependent upon forecasted closure
estimates, timing of future
rehabilitation activity, inflation and
discount rate assumptions;
consideration of whether goodwill
arises on the transaction; and
the impact of the transaction on
associated tax balances, including the
deferred tax impact on reset cost
bases.
Our procedures, included but were not limited to:
•
•
•
•
•
•
reviewing the scheme booklet to understand the nature of
the merger and the implied consideration;
obtaining a copy of management’s experts’ valuation
report commissioned to determine the fair values of the
assets and liabilities associated with the acquisition;
assessing the independence, competence and objectivity
of management’s experts;
assessing in conjunction with internal valuations specialists
the identification of assets acquired and liabilities assumed
and the appropriateness of the methodologies and
assumptions utilised by management and their experts in
relation to the following:
• Non-Current Ore Stocks; assessing the forecast
gold price, future processing costs, ore grades and
ore volumes, expected timing of processing, and
discount rate assumptions applied as well as the
overall methodology adopted to valuing
inventory;
Property, plant and equipment: assessing the
methodologies applied in valuing assets and the
resulting valuations adopted having regard to
asset condition, age, useful life and life of mine;
Rehabilitation Provision: agreeing rehabilitation
cost estimates to underlying closure estimates
and assessing the assumptions applied to
determining the liability at acquisition.
•
•
evaluating whether the transaction gave rise to goodwill on
acquisition; and
assessing the calculation of taxes payable and the
recognition of deferred tax balances on the transaction
with assistance from internal tax specialists.
We also assessed the appropriateness of the disclosures
included in Note 12 to the financial statements and the
remeasurement on the existing 50% ownership of KCGM by
Northern Star Resources.
195
Liability limited by a scheme approved under Professional Standards Legislation.
Member of Deloitte Asia Pacific Limited and the Deloitte organisation.
Liability limited by a scheme approved under Professional Standards Legislation.
Member of Deloitte Asia Pacific Limited and the Deloitte organisation.
NORTHERN STAR RESOURCES LIMITED ANNUAL REPORT 2021NORTHERN STAR RESOURCES LIMITED ANNUAL REPORT 2021
FInancIal RepoRt
FInancIal RepoRt
AAccccoouunnttiinngg ffoorr mmiinnee pprrooppeerrttiieess
As at 30 June 2021, the carrying value of
mine properties amounts to $6,684.1
million as disclosed in Note 8(d).
The carrying value has increased primarily
due to $348.8 million of capital
expenditure, $4,091.4 million of acquired
mine properties and $1,552.7 million
associated with the remeasurement of
KCGM interest, offset by related
amortisation expenses of $445.1 million.
The accounting for underground mining
operations includes a number of estimates
and judgements, including:
•
•
the allocation of mining costs between
operating and capital expenditure; and
determination of the units of
production used to amortise mine
properties.
A key driver of the allocation of costs
between operating and capital
expenditure is the physical mining data
associated with the different underground
mining activities including the
development of declines, lateral and
vertical development, as well as capital
non-sustaining costs.
196
For the allocation of mining costs our procedures included, but
were not limited to:
•
•
obtaining an understanding and testing of the key
controls management has in place in relation to the
capitalisation of underground mining expenditure and
the production of physical underground mining data;
and
assessing the appropriateness of the allocation of
costs between operating and capital expenditure
based on the nature of the underlying activity, and
recalculating the allocation based on the underlying
physical data.
For the Group’s unit of production amortisation calculations
our procedures included, but were not limited to:
•
•
•
obtaining an understanding of the key controls
management has in place in relation to the calculation
of the unit of production amortisation rate;
testing the mathematical accuracy of the rates
applied; and
agreeing the inputs to source documentation,
including:
-
the allocation of contained ounces to the specific
mine properties;
the contained ounces to the applicable reserves
statement; and
the anticipated development expenditure to life
of mine models. These were assessed for
reasonableness compared to historical
development expenditure for the respective
operations.
-
-
RReehhaabbiilliittaattiioonn pprroovviissiioonn
As at 30 June 2021 a rehabilitation
provision of $772.3 million has been
recognised as disclosed in Note 8(g).
Judgement is required in the
determination of the rehabilitation
provision, including:
•
•
assumptions relating to the
manner in which rehabilitation
will be undertaken; and
scope and quantum of costs, and
timing of the rehabilitation
activities.
We also assessed the appropriateness of the disclosures
included in Note 8(d) to the financial statements.
Our procedures included, but were not limited to:
•
•
•
•
obtaining an understanding of the key controls
management has in place to estimate the
rehabilitation provision;
agreeing rehabilitation cost estimates to underlying
support, including where applicable reports from
external experts;
assessing the independence, competence and
objectivity of experts used by management;
confirming the closure and related rehabilitation dates
are consistent with the latest estimates of life of
mines;
•
•
comparing the inflation and discount rates to available
market information; and
testing the mathematical accuracy of the rehabilitation
provision.
We also assessed the appropriateness of the disclosures
included in Note 8(g) to the financial statements.
Our procedures included, but were not limited to:
•
•
•
assessed the measurement requirements of the
mineralised waste stockpiles in accordance with
relevant accounting standards;
enquired with relevant operational personnel and
management with respect to the current and future
life of mine plans in light of recently announced
reserve and resources upgrades; and
assessed management’s determination of the net
realisable value of the mineralised waste stockpiles
with reference to the future processing expectations
as a consequence of the above.
We also assessed the appropriateness of the disclosures
included in Note 5(c) to the financial statements.
197
WWrriittee ddoowwnn ooff KKCCGGMM mmiinneerraalliisseedd wwaassttee
ssttoocckkppiilleess
As at 30 June 2021 an expense of $436.6
million has been recognised in relation to
the mineralised waste stockpiles at KCGM
which had initially been recognised as an
asset at fair value on the acquisition of
Saracen Mineral Holdings Limited as dis-
closed in Note 5(c).
At 30 June 2021 this inventory is required
to be measured at the lower of cost and
net realisable value in accordance with
AASB 102 Inventories.
Judgement was required in determining
the net realisable value of this mineralised
waste at year end.
Other Information
The directors are responsible for the other information. The other information comprises the information
included in the Group’s annual report for the year ended 30 June 2021, but does not include the financial report
and our auditor’s report thereon.
Our opinion on the financial report does not cover the other information and we do not express any form of
assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information and, in
doing so, consider whether the other information is materially inconsistent with the financial report or our
knowledge obtained in the audit, or otherwise appears to be materially misstated. If, based on the work we have
performed, we conclude that there is a material misstatement of this other information, we are required to report
that fact. We have nothing to report in this regard.
Responsibilities of the Directors for the Financial Report
The directors of the Company are responsible for the preparation of the financial report that gives a true and fair
view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal
control as the directors determine is necessary to enable the preparation of the financial report that gives a true
and fair view and is free from material misstatement, whether due to fraud or error.
In preparing the financial report, the directors are responsible for assessing the ability of the Group to continue
as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis
of accounting unless the directors either intend to liquidate the Group or to cease operations, or has no realistic
alternative but to do so.
NORTHERN STAR RESOURCES LIMITED ANNUAL REPORT 2021NORTHERN STAR RESOURCES LIMITED ANNUAL REPORT 2021
FInancIal RepoRt
FInancIal RepoRt
RReeppoorrtt oonn tthhee RReemmuunneerraattiioonn RReeppoorrtt
Opinion on the Remuneration Report
We have audited the Remuneration Report included in pages 85 to 127 of the Directors’ Report for the year ended
30 June 2021.
In our opinion, the Remuneration Report of Northern Star Resources Limited, for the year ended 30 June 2021,
complies with section 300A of the Corporations Act 2001.
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the Remuneration Report
in accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an opinion on the
Remuneration Report, based on our audit conducted in accordance with Australian Auditing Standards.
DDEELLOOIITTTTEE TTOOUUCCHHEE TTOOHHMMAATTSSUU
DD KK AAnnddrreewwss
Partner
Chartered Accountants
Perth, 24 August 2021
199
198
Auditor’s Responsibilities for the Audit of the Financial Report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from
material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance
with the Australian Auditing Standards will always detect a material misstatement when it exists. Misstatements
can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably
be expected to influence the economic decisions of users taken on the basis of this financial report.
As part of an audit in accordance with the Australian Auditing Standards, we exercise professional judgement and
maintain professional scepticism throughout the audit. We also:
•
Identify and assess the risks of material misstatement of the financial report, whether due to fraud or error,
design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient
and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting
from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional
omissions, misrepresentations, or the override of internal control.
• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the
Group’s internal control.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and
related disclosures made by the directors.
• Conclude on the appropriateness of the directors’ use of the going concern basis of accounting and, based on
the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may
cast significant doubt on the Group’s ability to continue as a going concern. If we conclude that a material
uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the
financial report or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on
the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may
cause the Group to cease to continue as a going concern.
• Evaluate the overall presentation, structure and content of the financial report, including the disclosures, and
whether the financial report represents the underlying transactions and events in a manner that achieves fair
presentation.
• Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business
activities within the Group to express an opinion on the financial report. We are responsible for the direction,
supervision and performance of the Group’s audit. We remain solely responsible for our audit opinion.
We communicate with the directors regarding, among other matters, the planned scope and timing of the audit
and significant audit findings, including any significant deficiencies in internal control that we identify during our
audit.
We also provide the directors with a statement that we have complied with relevant ethical requirements
regarding independence, and to communicate with them all relationships and other matters that may reasonably
be thought to bear on our independence, and where applicable, actions taken to eliminate threats or safeguards
applied.
From the matters communicated with the directors, we determine those matters that were of most significance
in the audit of the financial report of the current period and are therefore the key audit matters. We describe
these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or
when, in extremely rare circumstances, we determine that a matter should not be communicated in our report
because the adverse consequences of doing so would reasonably be expected to outweigh the public interest
benefits of such communication.
NORTHERN STAR RESOURCES LIMITED ANNUAL REPORT 2021NORTHERN STAR RESOURCES LIMITED ANNUAL REPORT 2021
Corporate
Information
CORPORAtE INFORMAtION
CORPORAtE INFORMAtION
Shareholder Information
table 1 Top 20 holders of ordinary shares at 20 August 2021
#
Name
Share
% Issued
capital
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
508,249,039
43.65
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
202
J P MORGAN NOMINEES AUSTRALIA PTY LIMITED
CITICORP NOMINEES PTY LIMITED
NATIONAL NOMINEES LIMITED
BNP PARIBAS NOMS PTY LTD
187,522,646
91,103,499
41,367,553
30,610,771
CITICORP NOMINEES PTY LIMITED
20,288,387
WROXBY PTY LIMITED
BNP PARIBAS NOMINEES PTY LTD SIX SIS LTD
11,705,278
10,578,715
BNP PARIBAS NOMINEES PTY LTD
10,357,719
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
BNP PARIBAS NOMINEES PTY LTD ACF CLEARSTREAM
9,190,176
6,042,517
PACIFIC CUSTODIANS PTY LIMITED NST EMPLOYEE SUB REGISTER
3,765,456
BNP PARIBAS NOMINEES PTY LTD
3,470,811
MR WILLIAM JAMES BEAMENT
2,559,325
NEWECONOMY COM AU NOMINEES PTY LIMITED <900 ACCOUNT>
2,370,841
MR WILLIAM JAMES BEAMENT
NATIONAL NOMINEES LIMITED
MS KAREN MARIE BAILEY
AMP LIFE LIMITED
16.11
7.83
3.55
2.63
1.74
1.01
0.91
0.89
0.79
0.52
0.32
0.30
0.22
0.20
0.20
0.16
0.15
0.14
0.13
2,320,792
1,901,406
1,699,778
1,619,836
1,500,000
948,224,545
81.44
216,027,555
18.56
1,164,252,100
100
20
MR HENDRICUS PETRUS INDRISIE
Total Top 20 holders
Balance of register
Total register
table 2 Distribution of ordinary shares at 20 August 2021
Holding
Shares
% Shares
Holders
% Holders
1-1,000
11,587,250
1,001-5,000
40,476,236
5,001-10,000
25,386,099
10,001-100,000
72,402,481
100,001 and over
1,014,400,034
1.00
3.48
2.18
6.22
87.13
Total
1,164,252,100
100.00
27,737
16,656
3,460
2,965
243
51,061
54.32
32.62
6.78
5.81
0.47
100.00
There were 1,728 holders of less than a marketable parcel of $500 based at closing market price at 20 August 2021.
table 3 Substantial holders at 30 July 2021
#
Name
1
2
3
BlackRock Inc
VanEck Inc
State Street Corporation*
table 4 Restricted securities at 20 August 2021
Class
Shares 1
Shares 2
Shares3
Shares4
Shares 5
Shares 6
Number
69,992
62,868
241,868
115,000
278,503
Share
153,950,310
65,884,182
63,184,815
% Issues
capital
13.2
5.7
5.4
Date escrow period ends
24 May 2022
26 June 2023
18 June 2024
Upon repayment in full of the limited
recourse loan
27,440 on 30 June 2021
102,895 on 30 June 2022
148,168 on 30 June 2023
35,000
5 July 2023
203
table 5 Unquoted equity securities at 20 August 2021
Class
Unvested Performance Rights
issued under the FY20 Share Plan
(NSTAA)
Number7
2,040,105
Unvested Share rights issued under
the FY20 NED Share Plan (NSTAC)
14,3288
Holders
83
3
Voting rights
The voting rights attaching to
each class of equity securities are
set out below:
Ordinary shares:
On a show of hands every
member present at a meeting in
person or by proxy shall have one
vote and upon a poll each share
shall have one vote.
Performance Rights:
No voting rights.
NED Share Rights:
No voting rights.
On-market buy-back
There is no current on-market
buy-back of the Company’s
equity securities.
Dividend
Reinvestment Plan
The Company announced a
Dividend Reinvestment Plan on
ASX on 27 May 2021.
* As of 24 August 2021 State Street Corporation is no longer a substantial shareholder.
1. Shares issued under the Employee Share Plan Rules No.3 (approved in June 2017) on 24 May 2019.
2. Shares issued under the Employee Share Plan Rules No.3 (approved in June 2017) on 26 June 2020.
3. Shares issued under the Employee Share Plan Rules No.3 (approved in June 2017) on 18 June 2021.
4. Shares issued under the Performance Share Plan Rules on 20 November 2013 (115,000).
5. Shares issued to Saracen employees as part of the Scheme of Arrangement on 12 February 2021 subject to holding lock.
6. Share issued under the FY20 Retention Share Plan on 12 July 2021.
7. Number of unissued ordinary shares under the Performance Rights or Share Rights. No person holds 20% or more of these securities.
8. FY22 NED Share rights issued to John Fitzgerald, Nick Cernotta and Mary Hackett; Equivalent to be issued to other Non-Executive Directors following
shareholder approval at the 2021 AGM.
NORTHERN STAR RESOURCES LIMITED ANNUAL REPORT 2021NORTHERN STAR RESOURCES LIMITED ANNUAL REPORT 2021 CORPORAtE INFORMAtION
CORPORAtE INFORMAtION
Glossary
ASX
Australian Securities Exchange
ASX Corporate
Governance Principles and
Recommendations
Principles and Recommendations
(4th edition) of the ASX
Corporate Governance Council
on the corporate governance
practices to be adopted by ASX
listed entities and which are
designed to promote investor
confidence and to assist listed
entities to meet shareholder
expectations
Au
The chemical symbol for gold
Auditor
The auditor of the Company
duly appointed under the
Corporations Act 2001
Australian Accounting
Standards
Australian Accounting Standards
are developed, issued and
maintained by the Australian
Accounting Standards Board, an
Australian Government agency
under the Australian Securities
and Investments Commission Act
2001 (Cth)
B or bn
Billion
Board
Board of Directors
Cash Earnings
Underlying EBITDA less net
interest, tax and sustaining
capital
CEO
Chief Executive Officer
Company
Northern Star Resources Limited
ABN 43 092 832 892
Contractors
Externally employed contracted
workers engaged by the
Company to support operations
Corporations Act
Corporations Act 2001 (Cth)
Director
A director of the Company
duly appointed under the
Corporations Act
EAP
Employee assistance providers(s)
employees
Total number of employees of the
Group including permanent, fixed
term and part-time. Does not
include Contractors
EPS
Earnings per Share
ESG
Environmental, Social &
Governance
ESR
Environment & Social
Responsibility
ESS
Environmental, Social & Safety
FY20
Financial year ended 30 June
2020
Incident
means the partial or whole
damage or destruction of an
area of cultural or heritage
significance without Traditional
Owner consent and/or required
legal or regulatory approvals
International Financial
Reporting Standards (IFRS)
A single set of accounting
standards, developed and
maintained by the IASB with
the intention of those standards
being capable of being applied
on a globally consistent basis
Indicated Mineral
Resource
As defined in the JORC Code
Inferred Mineral
Resource
As defined in the JORC Code
JORC Code
Australasian Code for Reporting
of Exploration Results, Minerals
Resources and Ore Reserves
2012 Edition, prepared by the
Joint Ore Reserves Committee
of The Australasian Institute of
Mining and Metallurgy, Australian
Institute of Geoscientists and
Minerals Council of Australia
FY21
Financial year ending 30 June 2021
K or k
Thousand
FY22
Financial year ending 30 June
2022
gpt
Grams per tonne
Group
Northern Star Resources Limited
and all of its wholly owned
subsidiaries as at 30 June 2021.
KCGM
KCGM means Kalgoorlie
Consolidated Gold Mines Pty
Ltd, a wholly owned subsidiary
of the Company, which operates
the Super Pit and Mt Charlotte
underground operations in
Kalgoorlie, Western Australia.
204
Share
Fully paid ordinary share in
Northern Star Resources Limited
shareholder
A shareholder of Northern Star
Resources Limited
stakeholders
An individual, group or
organisation that is impacted by
the Company, or has an impact
on the Company. Examples
of stakeholders are investors,
employees, suppliers and local
communities
Suppliers
External companies engaged by
Northern Star to supply goods to
the operations
tCFD
Task Force on Climate-related
Financial Disclosures
tRIFR
Total recordable injury frequency
rate, calculated according to the
number of recordable work -
related injuries or illness for each
one million hours worked
underlying EBItDA
Net profit after tax, before
interest, tax depreciation and
amoritisation adjusted for
specific items
$
Australian dollars, unless the
context says otherwise. All A$ to
$US currency conversions used in
this Annual Report are at $0.70
Key Management
Personnel or KMP
Defined in the Australian
Accounting Standards as those
persons having authority and
responsibility for planning,
directing and controlling the
activities of the entity, directly or
indirectly, including any director
(whether executive or otherwise)
of that entity
koz
Thousand ounces
LtIFR
Lost Time Injury Frequency Rate;
calculated based on the number
of lost time injuries occurring in
a workplace per 1 million hours
worked
M or m
Million
MD
Managing Director
Measured Mineral
Resource
As defined in the JORC Code
merger
The merger of Saracen Mineral
Holdings Limited ABN 52 009
215 347 and all of its wholly
owned subsidiaries with Northern
Star by way of Scheme of
Arrangement implemented on
12 February 2021
Mineral Resource or Resource
As defined in the JORC Code
NPAt
Net profit after tax
Northern Star
Northern Star Resources Limited
ABN 43 092 832 892
NSMS
Northern Star Mining Services Pty
Ltd, a wholly owned subsidiary
of the Company, dedicated to
underground mining operations
NSt
Northern Star Resources Limited
ABN 43 092 832 892
Officer
An officer of the Company
defined under the Corporations
Act
Ore Reserve or Reserve
As defined in the JORC Code
Performance Rights
Performance Rights are rights
to receive Shares in the future if
certain performance hurdles are
met
Probable Ore Reserve
As defined in the JORC Code
Proved Ore Reserve
As defined in the JORC Code
Quarter or Q
Financial year quarter,
commencing either 1 July,
1 October, I January or 1 April
Restricted Share
A Share subject to Share trading
restrictions
SAR
Saracen Mineral Holdings
Limited ABN 52 009 215 347
SASB
Sustainability Accounting
Standards Board
Saracen
Saracen Mineral Holdings
Limited ABN 52 009 215 347
and all of its wholly owned
subsidiaries, as acquired by
Northern Star by way of Scheme
of Arrangement implemented on
12 February 2021
205
NORTHERN STAR RESOURCES LIMITED ANNUAL REPORT 2021NORTHERN STAR RESOURCES LIMITED ANNUAL REPORT 2021
CORPORAtE INFORMAtION
Corporate Information
Northern Star Resources Limited
ABN: 43 092 832 892
Directors
Current Directors
Michael Chaney AO Chairman
Anthony Kiernan AM Lead Independent Director (until 18 November 2021)
John Fitzgerald
Mary Hackett
Nick Cernotta
Sally Langer
John Richards
Raleigh Finlayson
Stuart Tonkin
Non-Executive Director
Non-Executive Director
Non-Executive Director
Non-Executive Director
Non-Executive Director
Executive Director
Managing Director & CEO
Incoming Director
Sharon Warburton
Non-Executive Director (from 1 September 2021)
Former Directors (during FY21)
Bill Beament
Shirley In’t Veld
Peter O’Connor
Executive Chair (Resigned 1 July 2021)
Non-Executive Director (Resigned 30 June 2021)
Non-Executive Director (Resigned 12 February 2021)
Company Secretary
206
Hilary Macdonald
General Counsel & Company Secretary
Registered Office & Principal Place of Business
Level 1, 388 Hay Street Subiaco WA 6008 Australia
Telephone: +61 8 6188 2100
Facsimile: +61 8 6188 2111
Website: www.nsrltd.com
Email: info@nsrltd.com
Share Registry
Link Market Services Limited
Level 12, QV1 Building 250 St Georges Terrace Perth WA 6000 Australia
Telephone: +61 1300 554 474
Website: www.linkmarketservices.com.au
Auditors
Deloitte Touche Tohmatsu
Brookfield Place, Tower 2 123 St Georges Terrace Perth WA 6000 Australia
Registration & Listing
Incorporated in Western Australia on 12 May 2000
Quoted on the Official
List of the Australian Securities Exchange (ASX: NST)
Securities Exchange
ASX Limited
Level 40, Central Park, 152-158 St Georges Terrace Perth WA 6000 Australia
ASX Code
NST
Chris Armstrong, Projects
Superintendent, Carosue
Dam, Kalgoorlie operations.
NORTHERN STAR RESOURCES LIMITED ANNUAL REPORT 2021 nsrltd.com
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