NORTHERN STAR RESOURCES LTD — Annual Report 2012

Dec 3, 2012

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INVESTOR SITE VISIT 4[th] DECEMBER 2012

Competent Persons Statements

• The information in this announcement that relates to Paulsens and Mt Olympus mineral resource estimation, exploration results, data quality, geological interpretations, potential for eventual economic extraction and estimates of exploration potential, is based on information compiled by or under the supervision of Brook Ekers, (Member AIG), who is a full-time employee of Northern Star Resources Ltd. Mr. Ekers has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2004 Edition of the "Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves".

• The information in this announcement that relates to Exploration Results, Mineral Resources or Ore Reserves in the ‘Exploration’ section of this report is based on information compiled by Mr Jason Boladeras, who is a Member of the Australian Institute of Geoscientists (AIG) and Exploration manager and casual employee of Northern Star Resources. Mr Boladeras has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2004 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’. Mr Boladeras consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.

• Information in this announcement that relates to the Ore Reserves has been compiled by Shane McLeay, Principal Engineer – Entech Pty Ltd, who has sufficient experience relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2004 Edition of the “Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves”. Shane McLeay is a Member of the Australasian Institute of Mining and Metallurgy and consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.

Forward Looking Statements

• Northern Star Resources Limited has prepared this announcement based on information available to it. No representation or warranty, express or implied, is made as to the fairness, accuracy, completeness or correctness of the information, opinions and conclusions contained in this announcement. To the maximum extent permitted by law, none of Northern Star Resources Limited, its directors, employees or agents, advisers, nor any other person accepts any liability, including, without limitation, any liability arising from fault or negligence on the part of any of them or any other person, for any loss arising from the use of this announcement or its contents or otherwise arising in connection with it. This announcement is not an offer, invitation, solicitation or other recommendation with respect to the subscription for, purchase or sale of any security, and neither this announcement nor anything in it shall form the basis of any contract or commitment whatsoever. This announcement may contain forward looking statements that are subject to risk factors associated with gold exploration, mining and production businesses. It is believed that the expectations reflected in these statements are reasonable but they may be affected by a variety of variables and changes in underlying assumptions which could cause actual results or trends to differ materially, including but not limited to price fluctuations, actual demand, currency fluctuations, drilling and production results, reserve estimations, loss of market, industry competition, environmental risks, physical risks, legislative, fiscal and regulatory changes, economic and financial market conditions in various countries and regions, political risks, project delay or advancement, approvals and cost estimates.

	Shares	Options
Total	424M	3.5M
* As at Nov 2012
Share price:		A$1.28
Market Capitalisation (ASX : NST)
ASX 200

		Undiluted	~A$543M
		Cash, Bullion & Investments(30 Sep 2012)	A$67M
		Top 20:	+50%
		Institutions	40%
		Board and Management	10%
		High Net Worth Individuals	20%
		Retail	30%
Page	3

Board ‐ Successful record in discovering and developing mines

BILL BEAMENT Managing Director (Mining Engineer)

Non Executive Chairman – Independent (Barrister and Solicitor)

CHRIS ROWE

Non Executive Director – Independent (Investment Fund Management) Non Executive Director – Independent (Resources Finance and Banking)

PETER O’CONNOR

JOHN FITZGERALD

MICHAEL FOTIOS

Non Executive Director (Geologist)

DISCIPLINES TO OPERATE A MINING BUSINESS ARE COVERED

Senior Management

RAY PARRY Chief Financial Officer

BERNIE SOSTAK General Manager Geology

PHIL TORNATORA General Manager Exploration

DARREN STRALOW General Manager (Paulsens)

MANAGEMENT CAPACITY TO CATER FOR COMPANY GROWTH

• Acquired Paulsens Gold Mine in Western Australia from Intrepid Mines (TSX/ASX : IAU) : for A$40M in July 2010

• At the time Paulsens had an eight‐ month life based on a mine plan of 45,000oz

• Repaid full A$40M acquisition from cashflow within 7 months

• Mine has been producing every year since 2005 at average rate of 70‐

• 80,000ozpa

• Established our own in‐house mining services division, “owner operator”

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• Changed out Mining and Crushing Contractors with in‐house team (Northern Star Mining Services Division)

• Increased our productivity by 43% in ore tonnes mined in the first full year, already improving again on this with 187,000 ore tonnes mined in the first 4 months of FY2013 (560,000t annualised)

• Dropped total cost per tonne by 20%, lowering the underground cut‐off from 4gpt to 2.5gpt

• Enables the Company to mine a greater portion of the orebody, bodes well for feeding our expanded plant

• Recently de‐risked the mine by installing a new mobile fleet, 95,000t ore on surface stockpiles, undertaking rapid capital and operating development which has opened up multiple productions area to obtain ore from

• Forecast savings of $7M FY2013, saved $2.6M in first 4 months. Will start to show‐up in unit cost per ounce

Source:

Profitability and Balance Sheet “Rapidly Growing”

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Page 6

• Increased Company profit by 57% to A$34.1M for FY2012

• EBITDA FY2012 A$49.4M

• Declared a maiden fully‐franked dividend of 2.5c

• Delivered two resource upgrades, taking total inventory to 403,000oz[1] – 180% increase

• Raised A$42.5M at 90c, lifting treasury to ~A$75 million,

• Global institutions brought onto register

• September Quarter production of 18,715oz at A$685/oz (inclusive of royalties), total cost A$897/oz

• Currently ahead of FY2013 budget, recovered 15,000oz in first two months of the December quarter

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Paulsens Resource Growth
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Source:

• Voyager 1 is the flagship lode at Paulsens and has produced all the gold under NST ownership

• Currently mining this lode 550m below surface. Mineralisation drilled to 850m and remains open at depth

• Lode runs at a rich 1,250–2,000 ounces per vertical metre

• Game changer emerged in Feb 2012 with the discovery of the high grade extension zone

• Drilling at this zone returned results of up to 2330gpt

• JORC resource grade in the zone runs at 25gpt

• First development ore from Voyager 1 Extn. intersected in Sep Quarter averaging 12gpt; production ore due in Jan 2013

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Voyager 1 Mined to June 2012
170,000oz Average grade 8g/t
Current Production Levels : 7-8g/t
First Extension Zone ore
intersected
Average development grade
12g/t
Voyager 1
Extension
Resource grade
25g/t
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• Voyager 2 was discovered by NST in late 2010; host of stunning drilling results up to 12,178gpt

• Voyager 2 begins 650 metres below surface and sits immediately adjacent to Voyager 1

• Maiden resource grade of 11.4gpt

• Opportunity to mine both lodes at the same time; no additional capital or level development required

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Voyager 1 Mined to June 2012
170,000oz Average grade 8g/t
Current Production Levels : 7-8g/t
Voyager 1 Extension
Resource grade 25g/t
Voyager 2
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• Orebody has yielded 500,000oz over ≈

• 400 vertical meters, 7 years of production so far

• Large part of mineralised structure not mined by previous owners due to hedging – High graded the mine

• Numerous drill results to follow up outside current mining areas

• Deep holes drilled in June to target ore body delivered outstanding results with grades up to 63gpt returned

• Results highlight potential to extend mine life well beyond 5 years

• Key CY2013 forecasts @ Gold Price A$1,550/oz:

• Total production of 100‐115koz

• Plant capacity expanded by 25% to 450,000tpa

• Average blended grade to rise 20% from 7gpt to ~8.5gpt

• Cash Costs C1 of A$610‐690/oz (inclusive of A$40/oz royalty)

• Total Operating Costs C3 of A$850‐950/oz

• Generating surplus cash of A$65‐85 million

• Long‐way through A$20M exploration program, consistent stream of outstanding results

• No other deposit found within 50km radius of Paulsens mine, which is now approaching the 1Moz endowment

• Great opportunity as there has been limited regional or near‐mine exploration for the past 10‐15 years

• Over 100 targets identified across two major regional structural trends

• Great opportunity to expand our

• 1,400km[2] tenement package

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• Paulsens is bounded by a Gabbro unit, traditionally seen as a ‘fence’ around the orebody

• Drilling aimed at testing the theory that the mineralisation is deposited on the other side of Gabbro and itself mineralised

• Results support this theory with hits up to 113gpt in the Gabbro and quartz outlined over 700m down plunge and Offset

• Results highlight potential to replicate the 900,000oz Paulsens quartz lode

• Drilling ongoing with results pending

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• Ashburton Project located within trucking distance of Paulsens

• Acquired in June 2011 for zero cash payment; royalty payable on production over 250koz

• Oxide open pit operation from 1998 to 2004, produced 340,000oz @ 3.3gpt

• JORC resource recently upgraded by 50% to 1Moz[3]

• Recent drilling extended mineralisation by 400m

• Studies well underway on a stand‐alone 100,000ozpa operation based on sulphide ore

• This will take total group production to 200,000ozpa

• Free‐milling ore to be trucked to Paulsens plant

• Metallurgical testing underway on sulphide ore, initial results show 80‐90% total gold recovery

• Feasibility on sulphide project is underway

• Page 14• Resource in‐filling and extensional drilling

• Maintained the employment of 200 people from Western Australia, with a number from the local region

• Paid $13.2 million in State Government/Stakeholder royalties, Company and Payroll Tax

• Donated/Committed $300,000 to various number of social causes

• First response to 3 major road crashes involving the public, our actions in one of these saved 3 lives

• Extremely strong cash generation from high‐grade and high‐margin ounces

• Growing production to underpin further growth in surplus cash (up to A$85 million CY2013)

• Sufficient resources to underpin +5 year mine life, with further extensions expected

• Exploration continues to return outstanding high‐grade results at Paulsens and Ashburton

• Studies progressing rapidly on second 100,000ozpa stand‐alone operation, taking group production to over 200,000ozpa

• Cash and Investments of A$67 million and will grow substantially in 2013

• Maiden dividend declared of 2.5 cents full franked, paid in September

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• Contact Details:

• Bill Beament – Managing Director +61 8 6188 2100

• Email – info@nsrltd.com

• Website – www.nsrltd.com

30 Jun 2012	Measured	Measured	Indicated	Indicated	Inferred	Inferred	Total	Total	Total
	Tonne s (,000)	Grade (g/t)	Tonne s (,000)	Grade (g/t)	Tonn es (,000)	Grade (g/t)	Tonne s (,000)	Grade (g/t)	Oz Au (,000)
Open Pit			573	2.5	169	2.5	742	2.5	61
Paulsens Upper Levels			136	7.1	32	5	168	6.7	36
Voyager 1	277	8.8	75	12.4	44	10.7	395	9.7	123
Voyager 1 Extension			64	20.0	39	33	103	25.0	83
Voyager 2			22	14.3	71	10.5	93	11.4	34
Paulsens Stockpiles									11
Belvedere			45	2.8	123	3.5	168	3.3	18
Merlin					523	1.4	523	1.4	24
Mt Clement JV					226	1.8	226	1.8	13
Total	277	8.8	915	5.5	1227	3.8	2418	5.0	403

Table 1 – Paulsens Resources @ 2.5g/t Au Lower Cut‐off Underground and 1.0g/t Au Lower Cut‐off Open Pit

31 December 2011	Measured	Measured	Indicated	Indicated	Inferred	Inferred	Total	Total	Total
	Tonne s (,000)	Grade (g/t)	Tonne s (,000)	Grade (g/t)	Tonn es (,000)	Grade (g/t)	Tonne s (,000)	Grade (g/t)	Oz Au (,000)
Mt Olympus	1,712	2.5	1,533	2.3	4,956	2.8	8,201	2.6	695
Peake			95	5.6	794	4.2	889	4.3	123
Waugh			347	3.6	240	3.6	587	3.6	68
Zeus			508	2.1	532	2.2	1,040	2.2	72
Electric Dingo			98	1.6	444	1.2	542	1.3	22
Romulus					329	2.6	329	2.6	27
Total	1,712	2.5	2,581	2.5	7,295	2.8	11,58 8	2.7	1,007

Table 3 – Ashburton Mineral Resources Inclusive of Reserves – 0.7g/t lower cut used for Mt Olympus & 0.9g/t lower cut for others

31 December 2011	Proven	Proven	Probable	Probable	Total	Total	Total
	Tonnes (,000)	Grade (g/t)	Tonnes (,000)	Grade (g/t)	Tonnes (,000)	Grade (g/t)	Oz Au (,000)
Open Pit			424	2.3	424	2.3	31
Paulsens Upper Levels			39	4.0	39	4.0	5
Voyager 1	117	6.1	2.48	6.1	365	6.1	72
Paulsens Stockpiles	6	5.9			6	5.9	1
GIC and CIT							4
Total	123	6.1	711	3.7	834	4.1	113

Table 2 – Paulsens Reserves Underground and Open Pit

	Proven	Proven	Probable	Probable	Total	Total	Total
31 December 2011	Tonnes (,000)	Grade (g/t)	Tonnes (,000)	Grade (g/t)	Tonnes (,000)	Grade (g/t)	Oz Au (,000)
Mt Olympus	248	3.6	113	3.6	361	3.6	42
Peake			47	5.0	47	5.0	8
Waugh
Zeus			38	2.4	38	2.4	3
Electric Dingo
Romulus
Total					446	3.7	53

Table 4 – Ashburton Reserves @ A$1,600 gold price based on oxide/transitional material only (free milling)