Elliott Investment Management LP has intensified its campaign for change at Northern Star Resources Ltd., arguing the Australian gold miner’s own disclosures validate calls for a board overhaul and formal strategic review.
At the same time, the leadership at Northern Star Resources — a publicly traded company on the Australian Securities Exchange (ASX: NST) — pushed back, insisting it is already addressing performance concerns and rejected calls for an immediate sale process.
The escalating exchange follows Elliott’s June 1 release of a presentation, “Northern Star Rising,” in which the activist investor outlined what it described as a path to unlock value at the company through a strategic review, operational improvements, a CEO search, and the addition of new perspectives to Northern Star’s Board of Directors.
Elliott, which is owned and founded by American billionaire and hedge fund manager Paul Singer, said funds under its management hold an investment in Northern Star of more than $1 billion Australian, which translates to about $700 million to $715 million in U.S. dollars. In total, the activist hedge fund manages more than $60 billion in assets.
The company sharpened its message in a June 10 statement responding to a shareholder letter from Northern Star Chairman Michael Chaney.
“This week’s letter from Northern Star’s Board has validated Elliott’s investment thesis,” Elliott said in its June 10 statement. “The board has formally acknowledged the company’s underperformance, disclosed it has received multiple inbound approaches from potential acquirers over the past year, and confirmed that its own financial advisers have modeled structural alternatives, including a spin-off of assets.”
Elliott argued Northern Star’s governance and strategic direction require more significant change than the company has proposed.
The investor criticized Northern Star’s recent record, citing operational issues, cost overruns, and leadership uncertainty following the announced departure of Managing Director and CEO Stu Tonkin.
“Whatever path Northern Star takes next, its board must be equipped to oversee the process, and the market must have confidence in its credibility and rigor,” according to Elliott, which added that the case for a strategic review is now more apparent than it was before the board published its letter.
“We believe Northern Star must act immediately to restore shareholder value,” Elliott said, noting that first, the board must be substantially strengthened so that it can serve as an effective and credible steward of the company through this transition.
“Second, this strengthened board must launch a formal strategic review to evaluate all alternatives, conducted alongside the search for a world-class CEO, and the development of a standalone turnaround plan,” said Elliott. “No options should be taken off the table, and no outcome should be prejudged — by Elliott or by Northern Star’s Board.”
For its part, Northern Star acknowledged shareholder frustration but defended its long-term strategy and operational progress.
In his June 10 letter to shareholders, Chaney said the company recognizes concerns over recent performance.
“Can I be the first to say, on behalf of your board, that we acknowledge the share price performance of Northern Star this year has not met our expectations and we recognise shareholders’ concern,” Chaney wrote.
Northern Star, added Chaney, remains open to engagement with Elliott and would “seriously consider constructive suggestions which could deliver value.”
At the same time, he argued Elliott’s critique overlooked major milestones achieved in recent years, including remediation work at KCGM, construction of a new processing plant at Fimiston, and the acquisition and advancement of the Hemi gold project in western Australia’s Pilbara region.
“Elliott’s presentation focuses, perhaps understandably given Northern Star’s share price performance, on more recent operational matters but ignores the major achievements made by our dedicated employees over the last five years,” wrote Chaney. “These have set the company up for long-term success.”
Northern Star also confirmed it has received multiple approaches over the past year regarding possible corporate combinations but said those discussions were not pursued.
“We do not consider that this is the right time” to run a sale process, Chaney wrote. “Those discussions did not proceed because they were not in shareholders’ best interests.”
The chairman further disclosed that investment banks had proposed spinning off some assets and that Northern Star’s financial advisers had reviewed those options in recent months, though the board currently prefers to retain the portfolio while continuing periodic reviews.
On governance, Chaney said the company is already searching for both a new CEO and an additional director with deep gold-sector experience.
He added that his previously announced retirement at the end of his term in November remains on track.
“We believe we have a great future as one of the few very long-life gold mining companies in the world,” Chaney wrote.
Despite their differences, both sides signaled a willingness to engage and agreed on one point: Northern Star’s asset base remains strong and the company’s current market valuation does not reflect what they think is its underlying value.
Elliott said it remains committed to working with Northern Star “to ensure it realizes its full potential for its shareholders, its workers, and all others who depend on its success.”