Capital for a company like this is fairly unlimited for good...

Capital for a company like this is fairly unlimited for good projects, so need good investment hurdles. A buy back gives increased profits and divs per share for every capital allocation decision (including organic reinvestment) going forward; that is if you think NST is undervalued. At current gold prices I believe that.

It's worth some thought though, if you want a 7% return on an $8bn stock you'd need to see perpetual free cash flow of $140m per qtr (more than NST June qtr). Obviously mining companies are finite but large ones tend to allocate capital into maintaining or expanding reserve and resource base and those costs are in free cash flow. Once the capital overhang is gone with NST on Thunderbox mill expansion and KCGM cut back, the cash register should ring louder and that's without the Pogo story turning more positive. If Jundee has a problem then there is a real problem though and it's not getting younger. Reinvestment into a Fimiston mill expansion is surely very value accretive ($0.5-1.5/share?) and even more so if done with, relatively, cheap debt. The business should be able to handle the gearing with a good hedge book and looks like they've been working on that.

All up, surely NST should long term be able to achieve free cash flows (including equipment debt payments that are really operating) of, say $150-200m per quarter. With the buy back( would've preferred bigger), if it maintains that sort of FCF, then @ 7% cost of capital share price should be ~$8-11 at current gold prices imo. If you think 5% is a reasonable cost of capital perhaps $11-15/share. Might see a dip tomorrow with London session gold prices though in meantime. Good buying opportunity? I think so and downside risk relatively overpriced.

DYOR