Shares in Australia’s Northern Star Resources jumped on Tuesday after activist investor Elliott Investment Management disclosed an over A$1 billion ($714.60 million) stake and called for it to launch a strategic review that would consider a sale.
The US-based investor cited gold miner Northern Star’s underperformance versus peers, “repeated operational missteps”, seven outlook misses in four years, and “deeply inadequate disclosures compared to global senior peers,” in a statement.
Northern Star had no immediate comment.
Elliott has taken the position in Australia’s largest gold miner as Northern Star, which has a market value of about $19 billion, readies for a leadership change. Managing Director Stuart Tonkin last month announced his resignation, effective in the first quarter of 2027, after 13 years.
Northern Star’s share price rallied 9.5% on Tuesday, paring prior losses of more than 25% this year, compared to peers Evolution Mining and Perseus Mining, which had dropped 2% and 8%, respectively.
The bid comes against a backdrop of gold prices that have eased by around a quarter from records hit earlier this year, and as cash-rich gold miners pursue mergers and acquisitions for growth.
“The company does need to be shaken up,” said portfolio manager Brenton Saunders of Pendal Group in Sydney, who added he agreed with many of Elliott’s points. “Their (Elliott’s) MO is usually very effective, if somewhat unorthodox.”
Strategic review
Elliott, which ran a high-profile activist campaign at Australian miner BHP Group a decade ago, described a clear path forward for Northern Star, focused on conducting a strategic review in tandem with an external CEO search and a process to identify operational improvements.
The fund said it would push for a faster CEO appointment, a board refresh, and the prompt exploration of all strategic alternatives, including a sale of the company.
“Northern Star’s recent pattern of operational missteps, cost overruns and inconsistent strategic direction demands urgent action,” Elliott said.
Elliott said first-round bids in a strategic review could come as soon as July, with a transaction announced as soon as December, or new targets could be announced at an investor day as early as December should the board prefer to turn the company around.
Over the past year, Northern Star has faced several setbacks at its Kalgoorlie gold operations in Western Australia, and it said achieving the lower end of its fiscal 2026 production guidance would be challenging.
In its presentation, Elliott, which manages nearly $79.8 billion in assets, said Northern Star should also refresh its board with directors with operational expertise in gold mining.
Elliott also said Northern Star’s valuation materially understated the quality of its underlying assets. It described the Kalgoorlie mine, known locally as the “Super Pit”, as potentially one of the world’s largest gold mines and Northern Star’s Hemi project in Western Australia’s north as among the most attractive greenfield gold projects in the developed world.
The Australian Financial Review first reported on Elliott’s stake in Northern Star on Monday.
Reuters
