Northern Star Resources (ASX:NST) has announced a definitive agreement to acquire De Grey Mining (ASX:DEG) through a court-approved scheme of arrangement. The transaction, valued at approximately $5bn, will see De Grey shareholders receive 0.119 Northern Star shares for De Grey share. This represents a premium over De Grey’s recent trading prices (De Grey closed at $1.50 on Friday; Northern Star closed at $17.48 on Friday).
Northern Star is one of Australia’s leading gold producers, with operations spanning Western Australia and Alaska. Known for its focus on low-cost, high-margin projects, the company operates several Tier-1 mining assets, including the Kalgoorlie Super Pit and the Jundee Gold Mine.
De Grey Mining is a gold exploration and development company headquartered in Western Australia. Its flagship asset, the Hemi Gold Project, is one of the largest undeveloped gold projects in the world, with 11.2 million ounces in mineral resources. Located in the Pilbara region, Hemi has been lauded for its scale, low cost, and long mine life.
The deal aligns with Northern Star's strategic plan to expand production. Boasting forecast production of 530,000 ounces annually over its first decade, Hemi will complement Northern Star’s portfolio and add a fourth production centre in Western Australia.
The scheme is expected to be implemented by May 2025, with De Grey shareholders owning approximately 19.9% of the combined entity.
Stuart Tonkin, Managing Director and CEO of Northern Star, commented: “This acquisition enhances our portfolio and positions Northern Star as a leading global gold producer. Hemi offers significant growth potential, and our operational expertise will maximise its value.”
De Grey’s Managing Director, Glenn Jardine, highlighted the benefits for De Grey shareholders: “This transaction delivers an attractive premium and the opportunity to retain exposure to Hemi while benefiting from Northern Star’s broader portfolio and proven operational capabilities.”
Shares in Northern Star are trading 5.77% lower at $16.50.
Shares in De Grey Mining are trading 28.29% higher at $1.95.
