By Rhiannon Hoyle
The chairman of Northern Star Resources rejected a call by activist investor Elliott Investment Management to explore a sale of the Australian gold company, and said that the miner has turned down several proposals over the past year because they weren't in shareholders' best interests.
In a letter to shareholders, Chairman Michael Chaney also signaled plans for Northern Star to retain ownership of all the assets it currently owns and said the board is seeking to add at least one additional director with extensive experience in the gold industry, as the company focuses on operational improvements to turn around its flagging stock price.
Shares were 4.4% lower by midafternoon in Sydney on Wednesday.
Elliott said last week that it had built a stake valued at well over 1.0 billion Australian dollars, equivalent to US$703 million, in Northern Star and was seeking strategic and operational reviews of Australia's largest gold miner. The investor said it wants a sale of the entire company to be explored alongside all strategic options following significant underperformance in the miner's total returns to shareholders compared with peers.
Elliott said it believed there would be significant strategic interest in Northern Star. The miner ranks among the world's top 10 gold-mining companies by production.
"With reference to Elliott's suggestion that the board should run a sale process for the company, we do not consider that this is the right time to do so," Chaney said in the letter Wednesday.
The company is "always open to serious approaches from outside parties," he said, adding that "given our share price underperformance, over the last year Northern Star has been approached by several companies about considering various corporate combinations."
Those discussions didn't move forward because they weren't in the best interest of shareholders, he said.
Elliott's investment in the company prompted analysts to speculate that Northern Star could sell some smaller, noncore mines. But Chaney said Northern Star's financial adviser has already reviewed proposals to spin off assets within the past six months.
"For now, we are comfortable holding the assets we do but this is a matter that will remain under regular review," he said.
Chaney said the company would "seriously consider constructive suggestions" from Elliott that could deliver value for shareholders.
Northern Star has been grappling with operational challenges, including at a plant that processes ore from its biggest Western Australia mine site. It has downgraded guidance to investors several times this year.
Its struggles mean it hasn't been able to fully capitalize on sustained strength in the gold price, which reached a record high earlier this year and remains elevated. Northern Star shares are down more than 30% year to date.
"Northern Star's recent pattern of operational missteps, cost overruns and inconsistent strategic direction demands urgent action," Elliott said when announcing its stake.
Chaney said the performance of the miner's stock this year hasn't met the board's expectations, but that Elliott's presentation overlooked major achievements made in recent years to set up the company for the long term, including the acquisition of the Hemi deposit, one of the gold industry's biggest undeveloped projects.
Elliott's recommendations include a refresh of the miner's board. It urged Northern Star to add directors with proven gold-mining operational expertise.
Northern Star advised shareholders over the past year that it was keen to appoint at least one additional director with deep gold experience, said Chaney. "That search continues, with some candidates having been interviewed," he said.
Write to Rhiannon Hoyle at rhiannon.hoyle@wsj.com
(END) Dow Jones Newswires
June 10, 2026 01:39 ET (05:39 GMT)
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