Northern Star (NST), under the leadership of Bill Beament, has been expanding their mining operations through acquisitions of gold mines across Australia and North America. NST has been reaping benefits without any regard for their partners.
Beament’s ‘opportunistic’ offer to NST’s EKJV Partners
When Bill Beament offered to buy Tribune Resources (TBR) and Rand Mining’s (RND) combined 49% stake in the East Kundana Joint Venture (EKJV), he violated a long-standing code of conduct and respect amongst Kalgoorlie miners.
TBR and RND labelled the timing of NST’s $150 million offer as ‘opportunistic’ when Beament took advantage of their vulnerability after the Takeovers Panel’s declaration in connection to nondisclosure of controlling shareholdings.
Bill Beament’s $150 bid for TBR and RND’s share for the stake in the EKJV undervalued its joint partners. NST, the 51% owner of EKJV, has been eyeing full control of the gold mine. His opportunistic streak will fracture relations with Northern Star’s EKJV partners.
After NST’s failed bid, it was a disappointment for Beament when TBR and RND accepted Evolution Mining’s offer to take a significant stake in their companies and indirectly the EKJV.
Self-performing with Northern Star Mining Services
Bill Beament’s Northern Star replaced Barminco with their very own Northern Star Mining Services (NSMS) as mining contractor for NST’s East Kundana Joint Venture without consultation with his minority partners. Beament’s imprudent decision to disregard NST’s EKJV partners is arguably oppressive conduct toward their minority shareholders. Observers are expecting that there is more to play out here!
Despite Barminco low cost production and excellent credentials, NST terminated their contract with the intention of self-performing with NSMS. Since transitioning, NST has arguably been reaping unjust profits. Production costs for the EKJV increased by nearly 50%, decreasing mine profitability for NST’s partner companies, TBR and RND.
NST’s new partnerships
Northern Star Resources, the largest shareholder of Echo Resources (EAR), owning 21.7% of the company, is reported to buy more shares from EAR for a total transaction of $193 million. There are also speculations that Bill Beament’s Perth-based gold miner will also make an offer for Barrick Gold’s (ABX) share in the Super Pit gold mine.
With NST’s new acquisitions and partnerships, it is only a matter of time before Beament hurts his other partners like TBR and RND. With Mr Beament’s expedient conduct, it is no surprise that his business partnerships appear to have turned sour.