NORTHERN STAR RESOURCES LTD — Capital/Financing Update 2012

Aug 1, 2012

Northern Star Unveils Trifecta:

==> picture [178 x 62] intentionally omitted <==

Up to $85m surplus cash forecast for CY13, Maiden dividend follows significant resource upgrade

Highlights

• Northern Star’s CY13 budget forecasts surplus cash of $65-$85 million for the year

• Result will stem from production of 100,000-115,000oz, up from the 75-80,000oz forecast for CY12

Code: NST

Board of Directors

==> picture [166 x 88] intentionally omitted <==

----- Start of picture text -----

Managing Director
Mr Michael Fotios
Non-Executive Director
Mr Peter Farris
Non-Executive Director
Mr Peter O’Connor
----- End of picture text -----

• Production increase will reflect significant rise in mill head grade from 7gpt currently to 8-9gpt in CY13 along with expanded capacity at Paulsens mill

• Increased grade will drive down cash costs to between $610$690/oz (depending on final production number) in CY13 from estimated $650/oz in CY12 (all cash costs include $40/oz royalty)

• Fully franked maiden dividend of 2.5c a share declared, payable in September 2012 (total payout of $10m; cash/bullion on hand at June 30, 2012 of $75m, no bank debt)

• Upgraded JORC resource estimate of 2.4Mt at 5.0gpt for 403,000oz[1] , an increase of 25 per cent

Issued Capital

==> picture [166 x 87] intentionally omitted <==

----- Start of picture text -----

Options 27.7M
Current Share Price
$0.86
Market Capitalisation
$350 million
----- End of picture text -----

Projects Commodities

Zn, Cu, gold

Investments Commodities Venturex (15%) Cu, Zn, Ag & gold

• Key Voyager 1 resource grade of 12.9gpt - 23% increase compared with previous estimate. Extension zone is 25gpt

• Voyager 1 remains open at depth and down plunge

• Resource inventory and deep drilling results underpin fiveyear mine life; drilling has uncovered significant additional areas of known mineralisation outside new resource estimate

• Extensive exploration program continuing at and around Paulsens mine

• Development studies at neighbouring Ashburton Project progressing rapidly as part of strategy to establish stand-alone 100,000ozpa there in 2014

Northern Star Resources (ASX: NST) is pleased to announce that it is set to generate surplus cash of $65-$85 million next calendar year on the back of sharply high production and lower costs assuming A$1,550/oz gold price.

The forecast compares with the $35 million in surplus cash the Company expects to record in 2012.

ASX ANNOUNCEMENT 02 AUGUST 2012

The WA gold miner also announces today that it will pay a fully franked maiden dividend of 2.5c a share and has increased the JORC-compliant resource estimate at its Paulsens Gold Mine in WA to 2.4 million tonnes at 5.0gpt for 403,000 ounces[1] . The increased inventory is a rise of 25 per cent and is sufficient to underpin a mine life of at least 5 years at Paulsens.

Northern Star’s recently-completed budget for CY13 shows the Company is set to produce between 100,000115,000oz for the year at cash cost of between $610-690/oz (inclusive of $40/oz royalty).

This compares with Northern Star’s forecast for the current year of 75-80,000oz at $650/oz. The Company confirmed recently that it is on track to meet this guidance.

The increased production in CY13 will be the result of a rise in average milled head grade from ~7gpt currently to 8-9gpt. The higher grade is due to the recently discovered extension zone at Paulsens flagship Voyager 1 lode, which has a resource grade of 25gpt.

To maximise recoveries and profit margins, the high grade ore from the extension zone will be blended with ore from other areas within the mine. This will also have the effect of prolonging the life of the extension zone, which will in turn help sustain higher head grades for longer.

Some of the production increase will also stem from the planned plant expansion at Paulsens, which will lift throughput capacity by 30 per cent 450,000tpa.

The JORC-compliant resource estimate for its flagship Paulsens Project has increased 25 per cent to 403,000oz (see table 1) . This compares with the previous estimate of 318,000oz and comes after 32,000oz was mined in the intervening period.

The increased resource estimate at Paulsens comprises 287,000oz underground (40% increase from last estimate Dec 2011 and 11,000oz in stockpiles) and 61,000oz in the planned open pit ( see Figure 1 ). In addition, there are the satellite resources that make up the Paulsens Project, these being Merlin, Belvedere and the Mt Clement JV.

30 June 2012	Measured	Measured	Indicated	Indicated	Inferred	Inferred	Total	Total	Total
	Tonnes (,000)	Grade (g/t)	Tonnes (,000)	Grade (g/t)	Tonnes (,000)	Grade (g/t)	Tonnes (,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	1.9	2418	5.0	403

1 Table 1 - Paulsens Resources @ 2.5g/t Au Lower Cut-Off Underground and 1.0g/t Au Lower Cut-Off Open Pit

The revised resource figure does not include the recent deep drilling results where hits up to 65gpt were received 325 metres below our current production level.

Level 1, 1 Puccini Court, Stirling WA 6021 Tel: +6 8 6188 2100 Fax: +6 8 6188 2111

Email: info@nsrltd.com Website: www.nsrltd.com

ASX ANNOUNCEMENT 02 AUGUST 2012

==> picture [512 x 264] intentionally omitted <==

Figure 1 - Long Section of Paulsens Mine Open Pit and Underground Mineral Resource and Reserves

Importantly, the key Voyager 1 resource grade of 12.9gpt has increased 23% from the December 2011 estimate and takes the overall pre-mined resource estimate to above 403,000oz[1] . The quartz structure is now up to 550m in strike on the lower mine levels, up from the consistent 300m and remains open at depth.

The total resource upgrade includes a maiden resource for the recently-discovered Voyager 2 lode at Paulsens of 34,000oz at 11.4gpt. This is the lode where Northern Star recorded an intersection of 0.8m at 12,178gpt, believed to be one of the highest grades ever recorded in the Australian gold mining industry.

The drilling program on Voyager 2 was suspended temporarily to enable drilling to be accelerated on the high grade Voyager 1 extension zone. Due to this, further drilling is required at a later date to potentially increase the size of the maiden resource.

In light of Northern Star’s extremely strong balance sheet ($75m cash and bullion at June 30) and outstanding cashflow projections, the Company has decided to pay a fully franked maiden dividend of 2.5c a share, which represents a 3 per cent yield based on a share price of 85c.

The dividend payout will total $10 million which will leave Northern Star with ample firepower to take advantage of any acquisition opportunities which may arise.

The dividend will be declared to all shareholders on the register at 05 September 2012 and is expected to be paid on 12 September 2012.

Northern Star Managing Director Bill Beament said the extensive exploration program at Paulsens was generating outstanding returns, with the Company now set to enjoy a great 2013.

“These forecasts show Northern Star is poised for a bonanza year marked by superb cash generation, significantly higher production and some of the lowest costs in the Australian gold mining industry,” Mr Beament said.

Level 1, 1 Puccini Court, Stirling WA 6021 Tel: +6 8 6188 2100 Fax: +6 8 6188 2111

Email: info@nsrltd.com Website: www.nsrltd.com

ASX ANNOUNCEMENT 02 AUGUST 2012

“Our commitment to exploration at Paulsens is being repaid in spades, with the mine now having at least five years’ worth of resources. And we have discovered significant areas of additional mineralisation which further strengthen our belief that Paulsens has a long profitable future beyond current resources.

“In addition, we are continuing to drill on the other side of the gabbro unit surrounding Paulsens and remain hopeful of identifying repeats of the Paulsens orebody.”

Yours faithfully,

Bill Beament Managing Director

Competent Persons Statements

The information in this announcement that relates to the mineral resource estimation, exploration results, data quality, geological interpretations and potential for eventual economic extraction, is based on information compiled by or under the supervision of Brook Ekers, (Member AIG), who is a fulltime 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 Persons as defined in the 2004 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.

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.

Level 1, 1 Puccini Court, Stirling WA 6021 Tel: +6 8 6188 2100 Fax: +6 8 6188 2111

Email: info@nsrltd.com Website: www.nsrltd.com