The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

By Antony Currie

MELBOURNE, June 2 (Reuters Breakingviews) - Just three months ago Northern Star Resources' NST.AX market value hit a record high. Now, after shares plummeted 42%, the $19 billion Australian gold miner is Elliott Management's latest target. Paul Singer's activist investment firm has taken a more than 4% stake and is pushing for a major overhaul, with a sale of the company probably its preferred route.

Northern Star's fall from grace has not been quite as swift as its stock price suggests. Elliott points out the company's total returns have been subpar for years. But rising gold prices, which hit their own record earlier this year, helped float all boats.

This year, though, investors in the miner faced a cacophony of missteps and downgrades. First, in early January, Northern Star cut production guidance by up to 8%, blaming "isolated incidents" including machine failure at a mine; its tardiness in reporting the issues earned it a please-explain note from the bourse ASX.

Later that month, CEO Stuart Tonkin also had to admit that operating costs would jump as much as 25%, as would capital expenditure at a new processing mill. And he committed the schoolboy error of telling analysts not to focus on the "minutiae which is behind us" - only to cut production estimates two months later by at least another 6%. Before the end of May he was out of a job - with no successor in place.

The mess reflects poorly on the board, too. The stock now trades at just 69% of net asset value, compared with a peer average of 1.08 times, per Elliott. Yet Northern Star has some of the best yellow gold assets in the world, including one of the top new mines, Hemi, under development. That's why Elliott is pushing for the next boss to come from outside the company and for some expert directors to join the board - as well as to build out the management team.

That could take 18 months or more. A sale could take advantage of cash-rich potential suitors in a hot M&A environment with at least 10 billion-dollar-plus deals in the past year. Imagine Northern Star secured a 40% takeover premium to yesterday's closing price from, say, Colorado-based Newmont NEM.N or Canada's Agnico Eagle Mines AEM.TO - two of the potential candidates Elliott flags. That'd still be 10% below peers' average net asset value, but a stellar, and faster, return on investment nonetheless. Singer's team is panning for gold in a deposit-rich river.

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CONTEXT NEWS

Elliott Management on June 1 said it has taken a more than 4% stake in $19 billion Australian gold miner Northern Star Resources. The Florida-based activist investment firm wants the company to consider selling to a rival as one option in a broader strategic review that would also include hiring an external CEO, appointing more mining experts to the board and building a new broader management team.

Shares in Northern Star had fallen 40% since March after a series of production downgrades and concerns over transparency. Stuart Tonkin, CEO since 2016, said on May 21 that he would step down before the end of September once his successor is found.

The miner's stock rose by more than 11% in morning trading in Sydney on June 2.