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Highlights
- Northern Star Resources (NST) to acquire De Grey Mining (DEG) in a $5 billion deal.
- The merger includes the Hemi gold project in Western Australia's Pilbara region.
- Combined group to achieve significant scale in Tier-1 mining jurisdictions.
The Australian mining sector has marked the year with a notable development as Northern Star Resources (ASX:NST) announces the acquisition of De Grey Mining (ASX:DEG) in a $5 billion transaction. This agreement, set under a binding scheme implementation deed, includes De Grey's Hemi gold project located in Western Australia's Pilbara region. The Hemi project is recognized as one of the largest undeveloped gold projects in a Tier-1 jurisdiction, further enhancing Northern Star's growth trajectory.
Transformative Potential for Northern Star
This merger positions Northern Star as a leader in the global gold mining landscape, with operations spanning two Tier-1 jurisdictions and four production centers. The combined entity will boast pro forma mineral resources of 74.9 million ounces and ore reserves of 26.9 million ounces, highlighting its substantial scale.
The acquisition includes the Hemi gold development, which brings additional mineral resources of 11.2 million ounces and ore reserves of 6 million ounces. The project is anticipated to yield approximately 530,000 ounces of gold annually over its first decade, cementing its importance as a long-life, large-scale asset.
Following this merger, Northern Star expects to benefit from the expanded Kalgoorlie Consolidated Gold Mines (KCGM) mill, which is undergoing a 27-million-tonnes-per-annum expansion—the largest Australian gold project in over a decade.
Strategic Vision
Northern Star's chief executive officer highlighted the strategic value of the acquisition, stating that Hemi will strengthen the company's asset portfolio by delivering low-cost, high-quality production. The integration is expected to drive Northern Star's gold output to 2.5 million ounces annually by FY29, in line with its growth targets.
De Grey Mining's management also emphasized the benefits of the transaction, citing the upfront value and continued exposure to Hemi's development. The collaboration between Northern Star and De Grey’s project teams is set to accelerate the progress of the Hemi project, ensuring knowledge sharing and momentum.
Terms of the Agreement
Under the proposed scheme, De Grey shareholders will receive 0.119 Northern Star shares for each share held. This represents a 37% premium to De Grey's latest closing price, valuing the company at approximately $5 billion. Post-transaction, Northern Star shareholders will control 80.1% of the merged entity, while De Grey shareholders will hold 19.9%.
This landmark merger underscores the growing scale and ambition within Australia's gold sector.
