Northern Star Soars as Elliott Calls for Sale or Turnaround
Activist calls for strategic review after ‘profound underperformance’
Elliott Investment Management has taken aim at the underperformance of Australia’s largest listed gold miner Northern Star Resources (ASX: NST).
The activist fund holds more than A$1 billion worth of Northern Star shares and released a presentation on Monday night, US time, entitled ‘Northern Star Rising’.
Northern Star shares slumped by nearly 25% in the first five months of 2026 following four guidance downgrades.
In 2021, it set a target of 2 million ounces per annum of gold production by this year. Its 2026 financial year guidance was initially set at 1.7-1.85Moz, but following the downgrades, its most recent forecast was “above 1.5Moz”.
Less than two weeks ago, it was announced that managing director Stuart Tonkin would step down during the September quarter after 13 years with the company, initially as chief operating officer, then CEO, and managing director since 2021.
“Northern Star’s recent pattern of operational missteps, cost overruns and inconsistent strategic direction demands urgent action,” Elliott said in a statement.
Elliott said Northern Star was deeply underperforming against its potential.
It cited a 203% total return underperformance versus its peers over the last three years, the lowest P/NAV and EBITDA multiples of any peer, repeated operational missteps, seven guidance misses in the past four financial years, and deeply inadequate disclosures compared to global senior peers.
The criticism came after BlackRock lamented the absence of a global gold major in Australia last week.
Strategic review
Elliott said Northern Star owed it to its shareholders to explore all strategic alternatives, including a sale of the company.
“We believe there would be significant strategic interest in Northern Star,” it said.
Elliott believes Northern Star could be attractive to Agnico Eagle Mines (TSX: AEM), Newmont Corporation (NYSE: NEM), Gold Fields (JSE: GFI) and AngloGold Ashanti (NYSE: AU), all of which already operate in Western Australia.
However, Gold Fields quickly sold the stake in Northern Star it acquired via last year’s takeover of Gold Road Resources, while AngloGold has indicated it could retreat from Australia.
But Elliott pointed out that neither company owned what it classified as a tier one, low-cost asset, and that Northern Star’s KCGM operation could rectify that.
It noted that once an expansion at KCGM was completed in the coming months, it had the potential to become the world’s second-largest 500,000 ounce per annum producer in a tier one jurisdiction behind Carlin in Nevada.
Of the four potential suitors listed by Elliott, it said only AngloGold had a tier one growth project in Arthur in Nevada with the potential to produce more than 500,000ozpa of gold, and Northern Star’s Hemi could fill a gap for the other three.
“Northern Star offers long-lived assets, growth in high-quality jurisdictions and a tier one development project,” Elliott said.
“We believe a substantial premium for NST would be NAV-per-share accretive for all relevant acquirors, with additional synergy and NAV expansion potential.”
After Northern Star’s fourth 2026 guidance reduction in March, Tonkin was asked if the company had become more vulnerable to an opportunistic takeover.
“Our attitude around this is we see enormous long-term value, so we’ve got to work to restore that and build that up,” he said.
“I won’t comment on vulnerability or otherwise, or takeover risks, but my attitude is, we’ve got work to do. We know what we’re doing. It’s going to take some time, and it’s something the board takes seriously and reviews.”
The turnaround
The other option for Northern Star, said Elliott, was to pursue an operational reset.
It called for the company to hire a world-class external CEO with extensive gold mining experience.
“Northern Star should work with Elliott to identify highly qualified new directors to support and bolster the credibility of the strategic and operational reviews and CEO search,” Elliott said.
Once the new CEO was in place, Elliott said the company should launch a comprehensive operational review focused on improved asset reliability, efficiency, and exploration.
It also called for Northern Star to hold an investor day with clear medium-term targets and strategic vision, including the results of the operational review.
Northern Star previously held regular investor days but had not held one since 2021.
Finally, Elliott called for improved investor communications and disclosures, including detailed technical reports and mine plans.
Elliott said the strategic review and turnaround processes should run in tandem.
“A strategic review and a standalone turnaround plan are not mutually exclusive,” it said.
“The board must move on both fronts simultaneously to demonstrate urgency and maximise shareholder value.”
Northern Star responds
Shares in Northern Star jumped by 13.6% on the ASX on Tuesday after Elliott’s presentation was released.
On Tuesday afternoon, Northern Star released a response.
“The Northern Star board shares Elliott’s view that Northern Star has the portfolio of assets needed to deliver superior returns to shareholders,” it said.
“The Northern Star board and management team frequently engage with our shareholders to hear their perspectives and welcome the opportunity for constructive dialogue with Elliott, as a shareholder of the company.”
It noted that the search for a new managing director was well underway with an international search firm appointed and discussions with potential candidates taking place.
“The company remains focused on delivering full-year guidance and commissioning of the KCGM mill expansion, which remains on track to occur in early FY27,” the company said.
Northern Star added that, in conjunction with its financial advisor Goldman Sachs, it regularly reviewed corporate opportunities, “including in relation to managing its existing portfolio of assets and potential broader M&A opportunities”.