Northern Star rejects Elliott push for company sale

Australia’s largest gold miner Northern Star Resources (ASX: AU) has rejected a proposal from activist investor Elliott Investment Management to explore asset sales or a potential takeover, arguing the timing is wrong as the company works through operational challenges and a leadership transition.

The board does not support launching a sale process despite Elliott’s recent call for a strategic review after building a stake estimated at between 3% and 4%, Northern Star chair Michael Chaney said Wednesday. Elliott’s proposal followed a series of guidance cuts over the past year as processing mill issues at Kalgoorlie in Western Australia contributed to the company’s underperformance relative to peers.

“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 to shareholders.

Chaney said Northern Star has previously considered takeover and merger approaches but concluded the proposals were not in shareholders’ best interests. “We had investment banks propose a spin-off of assets and we separately had our financial adviser review those options,” he said. “For now, we are comfortable holding the assets we do but this is a matter that will remain under regular review.”

The dispute comes at a sensitive time for the company. Elliott’s campaign to refresh the board and review strategy emerged days after CEO Stuart Tonkin announced plans to step down after nearly a decade in the role. Northern Star has begun searching for a successor as it seeks to restore investor confidence and improve operational performance.

Elliott’s intervention raises questions about whether one of the world’s largest gold producers can restore operational momentum on its own or whether shareholders may eventually push for more dramatic changes, including asset sales or a takeover.

Northern Star shares fell 3% to $18.54 apiece on Wednesday in Sydney, for a market capitalization of A$26.4 billion ($25.8 billion). The stock has traded in a 12-month range of A$15.30 to A$31.96.

Elliott’s track record

Elliott managed about $79.8 billion at the end of 2025 and has become one of the mining sector’s most closely watched activist investors. Last year, it disclosed a large stake in Toronto-based Barrick Mining (TSX: ABX; NYSE: B) as the world’s third-largest gold producer struggled to capitalize on a rally in bullion prices.

The firm has also campaigned against BHP Group (ASX, LSE, NYSE: BHP), pushing the miner to spin off its oil and gas business and simplify its dual-listed structure. Elliott previously targeted Kinross Gold (TSX: K; NYSE: KGC), a campaign that resulted in a $300-million share buyback.

Northern Star faces pressure from aging pits, rising costs and recent guidance downgrades. UBS said in March the company could benefit from selling lower-margin, shorter-life mines, while Elliott argued a strategic review would allow the board to weigh a potential transaction against the risks of a multi-year turnaround.