Northern Star Rides Gold Wave as Activist Pressure Mounts

Northern Star Resources found support from two powerful forces on Monday: a surging gold price and steady progress on its A$500 million share buyback program. The stock jumped 7.5% in Sydney to close at A$20.73, while in European trading it climbed 9.39% to €12.70, snapping a period of underperformance that has left the shares more than a third below their 52-week high.

The buyback, announced in April and running through April 2027, advanced as planned, management confirmed. The program signals confidence in the company’s valuation even as the stock trades well off its peak. Added fuel came from spot gold, which rose 2.8% to US$4,358 an ounce after a preliminary US-Iran peace agreement fueled hopes of lower inflation and more stable interest rates. Gold miners tend to amplify such moves.

Underpinning the rally is a substantial resource upgrade reported in June. Northern Star boosted its mineral resource estimate by 26% to 88.9 million ounces, while ore reserves increased 27% to 28.4 million ounces. For the first time, data from the Hemi project was included, contributing 13.2 million ounces of resources. Hemi is regarded as a strategically important long-term asset.

Yet beneath the surface, tension is building. Activist investor Elliott Investment Management has escalated its campaign, demanding a “substantially strengthened” board, a formal strategic review, and a faster CEO transition. In a letter to shareholders, Chairman Michael Chaney acknowledged that the share price has disappointed and confirmed that the board has received multiple takeover and merger offers. However, he rejected any immediate sale process, stating that investment banks’ suggestions of a spin-off of smaller holdings did not deliver value.

Should investors sell immediately? Or is it worth buying Northern Resources?

Elliott’s criticism stems from a series of profit warnings last year, linked to problems at the Kalgoorlie processing plant in Western Australia. Those operational setbacks have caused Northern Star to lag peers. Adding to the uncertainty, CEO Stuart Tonkin has announced his departure, and a search for his successor is underway. The activist’s demands include a quicker leadership change.

The stock’s technical indicators reflect a neutral market, with a relative strength index of 53.3 and the price remaining 2.2% below its 50-day moving average, which sits at €12.97. From its 52-week low of €10.00, Northern Star has recovered about 27%, but it still sits roughly 35% below the 52-week high of €19.53.

The combination of external tailwinds and internal pressures makes the next quarter critical. The June quarter results will show whether the operational turnaround is taking hold. In the meantime, the board is walking a tightrope: delivering on the buyback and capitalizing on the gold rally while fending off an activist campaign that is unlikely to lose momentum.