Northern Star replaces CEO, activist investor Elliott wants more

Australia’s biggest gold miner Northern Star Resources Ltd., under pressure from activist investor Elliott Investment Management LP to rebuild its management team, has appointed Glencore Plc’s Suresh Vadnagra as its new chief executive officer.

Elliott said in early June that it had built a A$1 billion ($716 million) stake in the company, pressing for a strategic review and urging the board to hire a CEO with operational and turnaround experience as part of an effort to overhaul its leadership.

It responded to Thursday’s announcement by saying the change of CEO does not negate the requirement for broader changes. 

“The need for substantial board enhancement and a comprehensive strategic review has not diminished, and we look forward to engaging with Northern Star’s new leadership on these topics and delivering the value that shareholders deserve,” Elliott said in a statement following Northern Star’s announcement.

Northern Star shares rose 4% in early morning trade, though were still down 27% since the start of the year. 

Vadnagra is currently the head of commodity giant Glencore’s nickel and zinc assets and previously served as chief technical and projects officer at gold miner Newcrest Mining Ltd., before it was acquired by Newmont Corp. in 2023. He will replace outgoing boss Stuart Tonkin on Oct. 5. 

“Suresh is an accomplished mining executive with the experience and capabilities to unlock the full potential of our assets and our people,” Northern Star Chairman Michael Chaney said in a statement Thursday.

Northern Star also announced that Chaney would be replaced by Michael Ashforth at the next annual general meeting in November. Ashforth was a partner at Herbert Smith Freehills Kramer and earlier a managing director at Gresham Partners. 

“Filling the permanent CEO seat removes a key overhang for Northern Star, providing leadership certainty and a clear runway for execution of growth projects,” Jefferies LLC analyst Mitch Ryan said in a note.

Northern Star has cut guidance repeatedly over the past year due to problems at its Kalgoorlie processing plant in Western Australia, which have hampered output and contributed to underperformance relative to peers.

Elliott last month that the company did “not understand the magnitude of change required” to win back investor trust and rescue the company’s valuation.