Northern Star Resources has struck a deal to acquire De Grey Mining, the holder of the highly prospective Hemi gold project in the Pilbara region of Western Australia.
Hemi has been established as one of the world’s largest undeveloped Tier 1 gold projects, boasting a low-cost, long-life, large-scale resource.
The project’s mineral resource currently stands at 11.2 million ounces of gold and a forecast annual gold production of 530,000 ounces over its first 10 years.
Once the deal is complete, Hemi will become another notch in Northern Star’s world-class resource belt, joining its Alaskan operations and the Kalgoorlie Consolidated Gold Mines (KCGM), which includes the Fimiston “Super Pit” and underground and the Mt Charlotte underground resources.
Northern Star’s takeover is expected to be worth around $5 billion, a 37 per cent premium on De Grey’s closing share price on Friday.
“We remain committed to our profitable growth plan to two million-ounce per annum (Mozpa) by FY26, with the KCGM mill expansion and addition of Hemi propelling a significant further increase in Northern Star’s production to 2.5Mozpa by FY29,” Northern Star managing director and chief executive officer Stuart Tonkin said.
“This reinforces Northern Star’s position as the leading Australian ASX-listed gold company and a top 10 global gold major.
“The addition of the Hemi project leverages Northern Star’s inbuilt project capability with the project team expected to transition from the mill expansion to Hemi.”
Through the transaction, De Grey shareholders will receive 0.119 new Northern Star shares for each De Grey share held.
De Grey managing director Glenn Jardine described the takeover as “a highly attractive opportunity” for the company’s shareholders.
“The transaction enables De Grey’s shareholders to retain material exposure to Hemi, whilst becoming approximately a 19.9 per cent shareholder in a globally significant ASX-50 gold company with a portfolio of producing assets, highly experienced management and track record of paying dividends,” Jardine said.
“Alongside my fellow directors, I have no hesitation in supporting the transaction and am excited for the future prospects of the combined group.”
Subscribe to the Mining newsletter to get the latest news that matters to Australia’s premier industry.
