Rewrites throughout; adds details, share moves in paragraph 12

By Melanie Burton and Jasmeen Ara Islam Shaikh

June 11 (Reuters) - Activist investor Elliott Investment Management late on Wednesday called on Australia's largest gold miner Northern Star Resources NST.AX to immediately restore shareholder value by refreshing its board and undertaking a formal strategic review, citing severe underperformance.

Elliott burst publicly onto Northern Star's register last week with a more than A$1 billion ($700.80 million) stake, calling 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.

The call from Elliott, which successfully pushed BHP BHP.AX to collapse its dual listing after a five-year campaign, came as the $19 billion miner was in the process of recruiting a new CEO and in succession planning for its chair.

Northern Star responded to Elliott's approach with a letter to shareholders earlier on Wednesday, saying it was happy to work with the activist investor and consider a board candidate that Elliott might suggest.

The U.S.-based investor said: "The board's letter indicates that it does not understand the magnitude of change required to win back shareholders' trust, starting with significantly strengthening the board itself."

The case for a strategic review of Australia's largest-listed gold miner is now clearer than it was before the board published its letter, Elliott added.

In its shareholder letter, Northern Star said that it does not consider it the right time to run a sale process. The miner acknowledged that it had been approached by several companies on considering various corporate combinations, given the underperformance of its shares.

"I think a lot of what Elliott is looking for Northern Star to do, Northern Star will do, but Elliott's pressure is going to make Northern Star act faster," said Daniel Morgan, an analyst at Barrenjoey in Sydney.

Northern Star appears to want to go forward with its richest assets, Kalgoorlie's Super Pit, as well as the Hemi and Pogo projects, Morgan said, and remaining assets could be sold to cash-up mid-tier gold miners, which could start this year.

In its letter, Northern Star said that investment banks in the last six months had proposed a spin-off of assets, in an option also reviewed by its financial advisor, but one the miner decided not to act on.

Over the past year, Northern Star has faced several headwinds at its Kalgoorlie gold operations in Western Australia, and it said achieving the lower end of its fiscal 2026 production guidance would be challenging.

Shares of the company fell as much as 5.3% to A$17.55 in early trade on Thursday, their lowest level since March 24, and were in tandem with the broader benchmark S&P/ASX 200 index .AXJO, which was down 0.8% by 0038 GMT. The stock has lost nearly 33% in value so far this year, outpacing gold's 5% decline.

($1 = 1.4300 Australian dollars)

($1 = 1.4269 Australian dollars)