Northern Star Resources reveals size of severance payout for departing boss Stuart Tonkin

Departing Northern Star Resources chief executive Stuart Tonkin will receive a golden handshake of more than $2 million next Friday.

Northern Star revealed Mr Tonkin’s $2.14m severance payout, plus an extra $199,738 as “accelerated recognition” of his remaining share incentives, in its full-year financial results on Thursday.

A glistening gold price run over the past financial year delivered the mining giant a stellar rise in revenue and profit.

But Northern Star won’t share the extra wealth with shareholders, as it hoards cash while the troublesome processing expansion of its flagship Kalgoorlie Super Pit beings to ramp up.

Australia’s biggest gold company maintained a final dividend of 30¢ a share — the same figure it paid out in FY25 — and its full-year distribution of 55¢ a share is also the same as a year ago.

The miner reported a revenue rise of 19 per cent to $7.62 billion over the year to June 30, as Middle East tensions and a global energy crisis pushed prices of the precious metal to multiple record highs.

Underlying earnings before interest, tax, depreciation and amortisation came in at $4.3b, with underlying free cash flow of $190 million.

Cash earnings were up just one per cent to $2.9b and net profit leapt 24 per cent to $1.67b.

In his final results announcement for Northern Star, Mr Tonkin said the company was “at an important inflection point”.

It has so far resisted calls from activist major shareholder Elliott Investment Management for a board clear-out or possible sale.

“The (Super Pit) mill expansion marks a significant milestone for the company, with the expanded processing plant expected to deliver greater operational consistency and reliability, while supporting a significant increase in free cash generation as it ramps up,” Mr Tonkin said.

“As we enter this next phase, disciplined capital allocation remains a priority, with a clear commitment to generating superior shareholder returns.

“To enhance the quality of the portfolio, the (Super Pit) expansion is expected to structurally reset the cost base and create a stronger platform for long-term value creation.”

Mr Tonkin is set to exit right after the problematic $1.6b-plus Fimiston mill expansion at the Super Pit is due to be completed this quarter.

Northern Star first flagged his resignation in May following a series of production downgrades at the Super Pit and cost creep for the mill expansion project.

The Florida-based Elliott pounced on Northern Star’s register soon after the flagged resignation, calling for a total board refresh and potential sale of the business.

Northern Star chair Michael Chaney addressed shareholders last week with a scathing letter about Elliott.

In the letter, Mr Chaney accused Elliott of making demands “to which no responsible board would agree”.

This apparently included Elliott pressuring Northern Star to blindly agree to its preferred board candidates without any right of refusal.

Elliott’s six board picks included former Anglo American chief executive Mark Cutifani, ex-Arcadium Lithium boss Paul Graves and one-time Barrick Gold chief financial officer Graham Shuttleworth.

Elliott’s suggestions have so far been ignored.

Just hours before Mr Chaney’s Thursday letter, Northern Star announced the appointment of former BHP director Terry Bowen, adding to the selection of former Perseus Mining boss Jeff Quartermaine last month.

Northern Star’s three production hubs are forecast to churn out between 1.5 and 1.65 million ounces this financial year at all-in costs of between $3050 and $3450.

The cost guidance was 7 per cent more than analysts’ consensus, according to RBC Capital Markets.

Australia’s biggest gold miner ended the year with cash and bullion of $1.24b, down 35 per cent from the previous year’s $1.9b.