Northern Star Resources strikes A$5bn deal to acquire De Grey Mining
Northern Star Resources Limited, a leading name in the global gold leader sector, has announced its intent to acquire De Grey Mining Limited in a landmark A$5 billion deal. The acquisition, structured as a court-approved scheme of arrangement, is set to deliver significant value to De Grey shareholders, offering 0.119 new Northern Star Resources shares for each De Grey Mining share held. This offer reflects a premium of 37.1% over De Grey’s last closing price as of 29 November 2024.
The centrepiece of this acquisition is the Hemi Gold Project, a large-scale gold development project located in the Pilbara region of Australia. With mineral resource estimates of 11.2 million ounces and ore reserves of 6 million ounces, Hemi is one of the most significant gold projects in a tier-1 jurisdiction. Forecasted to produce 530,000 ounces of gold annually for the first decade, Hemi is integral to Northern Star’s shareholder returns strategy and positions the company as a global gold leader.
Stuart Tonkin, CEO of Northern Star Resources, highlighted the strategic importance of this move, stating that the Hemi Gold Project complements the company’s existing low-cost production centres. He added that the project’s integration alongside the KCGM Mill Expansion would boost Northern Star’s production targets to 2.5 million ounces per year by FY2029.
De Grey Mining shareholders stand to benefit significantly from this merger. With an approximate 19.9% stake in the combined entity, they gain exposure not only to the continued growth of the Hemi Gold Project but also to Northern Star Resources’ diverse portfolio of tier-1 jurisdiction assets. De Grey Mining’s Managing Director, Glenn Jardine, emphasized that the deal represents a compelling opportunity for shareholders to leverage Northern Star’s expertise in gold development projects and operational efficiencies.
The combined entity will operate across two premier mining regions: Western Australia and Alaska. Together, they will manage four low-cost production centres with pro forma mineral resource estimates of 74.9 million ounces and ore reserves of 26.9 million ounces. This positions Northern Star as a formidable force in the global gold leader category, ensuring long-term shareholder returns.
The transaction is subject to regulatory approvals and is anticipated to close by May 2025. The Hemi Gold Project, already a low-cost production centre, is expected to leverage Northern Star Resources’ expertise to optimize development timelines and unlock maximum value. Industry analysts view this merger as transformative, reinforcing Australia’s dominance in gold mining and setting a benchmark for tier-1 jurisdiction operations.
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