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Blackrock looks to have a bleak outlook with Beament ‘s Northern Star

On 22 May 2020 Northern Star (NST) announced that it’s largest shareholder, Blackrock Group (Blackrock), has disposed of 10,871,316. Based on the closing price of 22 May 2020 that is near $150M.

BlackRock is the world’s largest asset manager, with $7.4 trillion in assets under management as of end-Q4 2019

Questions surround insider selling

In a 30 page detailed “Notice of change of interest of substantial holder“, Blackrock commenced their sell-off in on 6 February and over hundreds of trades up to, and including 22 May 2020 sold their stock.

Shareholders need to understand more of the insider selling that exists within NST. There remain many unanswered questions;

Are Blackrock continuing to dump their stock? 

The market and existing shareholders should be entitled to be better informed to understand why the largest stockholder of NST is reducing their exposure to the company. This would assist in reassuring shareholders that they are not privy to the same information that insiders may have access to.

Beament’s has consistently dumped his stock, is this continuing?

In 2017-2019 Beament sold down nearly 70% of his shareholding realising over $118M for his own personal gains. Scepticism has surrounded his explanations of Family Court settlements as this value far exceeds what many consider fair value to pay under such circumstances given Beament’s reported net worth (in 2015 he was reportedly worth $40M).

NT not good as gold

Perhaps NST is not ‘as good as gold’? 

The NST camp’s public relations machine continues top promote the virtues of NST. But 

Are Blackrock exiting because of Beament’s acquisition plans?

NST have been on an aggressive acquisition path with recent purchases of Pogo, in Alaska ($347M) and their 50% stake in Kalgoorlie’s Super Pit ($775M). With costs circa $1.12B the earnings do not appear to equate to the price paid. NST continues to assure shareholders that the resources exist to support the acquisition. But with escalating All In Sustaining Costs (ASIC) to produce the gold, a downturn in the volatile precious metal could soon take this gamble into negative territory.

Is there friction with Beament’s management?

Undeniably NST has been the greatest gold performer over the past decade. But nothing lasts for ever. Beament has, reportedly, trodden on many toes in his aggressive thrust to the top.

Is Litigation of concern?

At the East Kalgoorlie Joint Venture (EKJV) NST holds 51% of this very profitable gold mine. Joint venture partners Tribune Resources (TBR) and Rand Mining (RND) hold the balance. This relationship has soured with TBR and RND issuing proceedings against NST, on 20 December 2019, in the Supreme Court of Western Australia. It is claimed, amongst other things, breaches of the EKJV Agreement by NST.

If TBR and RND are successful there could be substantial damages and other costs to NST.

Shareholders just want to be able to make informed decisions

The “Notice of change of interest of substantial holder” contained no covering correspondence from NST. Surely such a substantial dumping of stock from the largest stockholder would warrant further explanation to placate shareholders with a transparent approach. NST have done the opposite and made no remarks whatsoever. Perhaps it is time that Beament helped his smaller investors along to assure them that the future at NST is better than Blackrock ostensibly appears to think.

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