De Grey Mining Agrees to be acquired by Northern Star Resources

3 min read | January 21, 2025 12:34 PM AEDT | By Team Kalkine Media

De Grey Mining Agrees to be acquired by Northern Star Resources — Image source: shutterstock

Acquisition by Northern Star

Northern Star Resources Ltd has agreed to acquire De Grey Mining through a Scheme of Arrangement. Key details include:

Scheme Consideration: Shareholders will receive 0.119 new Northern Star shares for each De Grey share held. This represents a 37.1% premium to De Grey’s share price of $1.52 as of November 29, 2024.
Shareholder Ownership: Upon completion, De Grey shareholders will hold approximately 19.9% of Northern Star.
Timeline: The Scheme meeting is anticipated in April 2025, with subsequent Court approval required.
Board Recommendation: De Grey’s Board has unanimously endorsed the Scheme, provided no superior proposal emerges and the Independent Expert concludes the transaction is in shareholders' best interests.

Financial Position

De Grey ended December with $786 million in cash and short-term deposits, ensuring the company is well-positioned to fund the development of the Hemi Gold Project. Additionally, documentation for a senior debt facility continues, subject to Northern Star’s consent under the Scheme Implementation Deed.

Hemi Gold Project Updates

The Hemi Gold Project made significant strides during the quarter, emphasizing its potential as a world-class gold deposit:

Mineral Resource Estimate (MRE): Updated in November, the MRE now stands at 264Mt @ 1.3g/t Au for 11.2Moz for Hemi alone, and 310Mt @ 1.4g/t Au for 13.6Moz including regional deposits.
Drilling Results: Outstanding infill drilling at the Brolga deposit confirmed consistent mineralisation at key cut-off grades, reducing drill spacing to enable a maiden Measured MRE of 12.7Mt @ 1.4g/t for 0.6Moz within the Brolga Starter Pit.
Ore Reserves: The Brolga Stage 1 pit now contains a Probable Ore Reserve of 26.9Mt @ 1.64g/t for 1.42Moz, with a favorable strip ratio of 2.4:1.

Project Development and Contracts

Significant progress was achieved in operational readiness, including contract awards totaling $200 million for long lead items such as permanent camps and autoclaves. These costs remain slightly below the Definitive Feasibility Study (DFS) estimates, excluding growth and contingency allowances.

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