The Australian mining group finds itself under pressure. Activist shareholder Elliott Investment Management has revealed a stake of over AUD 1bn in Northern Star and is calling for a comprehensive strategic review.

The fund criticizes the group for a succession of operational errors, cost overruns and a strategic direction deemed inconsistent. According to Elliott, these difficulties have contributed to a valuation that is too low considering the quality of the assets held by the group.

Amongst options mentioned is a sale of the company. Elliott believes that Northern Star could attract significant interest should the board decide to explore this path. The fund is also calling for the appointment of an external CEO, following the announcement of Stuart Tonkin's departure.

The investor is particularly critical of management's ability to handle two key projects: the ramp-up of the KCGM Fimiston plant and the development of the Hemi project. These assets are central to the group's growth, although their execution remains closely monitored by the market.

Speculation is reignited

Northern Star responded by stating that the search for a new CEO was underway. The group also maintains that the KCGM expansion is on track for commissioning in early 2027. The board added that it regularly reviews corporate opportunities, including potential M&A transactions, alongside Goldman Sachs.

In Sydney, Northern Star shares surged over 13% at today's close, as investors speculated on an increase in the company's value under pressure from Elliott. Over three years, Northern Star's stock has gained 47% on a total return basis, while gold prices have soared 130%.