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Australia’s Northern Star Resources (ASX: NST) on Wednesday flagged the potential for asset sales as the miner focuses on delivering its turnaround plan under a new CEO, amid pressure from both activist investor Elliott and suitor Gold Fields.
Northern Star reported a 7.2% rise in first-quarter revenue from gold sales, helped by higher average gold sale prices that offset lower volumes from planned shutdowns, but missed market expectations. It, however, kept its full-year guidance intact.
The result was the first time CEO Suresh Vadnagra faced investors since he took the helm of Australia’s biggest gold miner on October 5.
Vadnagra said his first focus was to deliver against company projections as processing at its Kalgoorlie operations ramps up, and flagged that he would assess the company’s assets for value including for potential sales.
The focus on delivery comes after Elliott in June called for a review and new leadership, citing repeated “operational missteps”, including seven outlook misses in four years, and a share price that vastly underperformed its peers.
Asked by an analyst on a results call about whether management saw potential value from asset divestment, Vadnagra said: “It’s clear that there’s an active process by the site team and the planning team to look at each (of our) assetsand assess … the way we’re operating those assets, and is there a way for us to unlock further value or improve the resilience?”
“Obviously, I’d like to apply my own lens to it as well with time, and it’s an area that’s high on the agenda.”
He declined to comment on the A$38.7 billion ($27.16 billion) takeover offer by South Africa’s Gold Fields (JSE: GFI; NYSE: GFI) that the miner rejected. Northern Star’s management has previously said that the offer was opportunistic.
Gold Fields’ CEO last week played down market speculation that it would raise its offer for Northern Star.
Four Western Australian assets identified by Barrenjoey for potential sale include Jundee, Thunderbox, Carosue Dam, and some of its Kalgoorlie operations.
Higher prices offset lower volumes
Bullion traded higher during the September quarter, as central bank buying and geopolitical uncertainty helped the gold miner report a higher average realised gold price of A$4,999 per ounce, compared with A$4,452 a year earlier.
This made up for the lower volumes due to planned major shutdowns that hit its three production centres. The miner said quarterly gold sold totaled 364 koz, compared with 381.1 koz from a year before.
Revenue from gold sales came in at A$1.82 billion for the quarter ended September 30, compared with A$1.70 billion a year earlier. That missed the Visible Alpha consensus estimate of A$1.93 billion.
($1 = 1.4251 Australian dollars)
(Reporting by Sherin Sunny and Kumar Tanishk in Bengaluru; Editing by Shreya Biswas and Stephen Coates)
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