Northern Star Acquires De Grey For $3.3 Billion, Secures Promising Tier 1 Asset

Leading Australian gold miner Northern Star Resources NSTYY has announced a $3.3 billion acquisition of De Grey Mining DGMLF, taking over De Grey's prized Hemi gold project.

"This acquisition reinforces Northern Star's position as the leading ASX-listed gold company and a top-ten global gold producer," stated Stuart Tonkin, CEO of Northern Star.

The Hemi project is a transformative addition to Northern Star's portfolio. It ranks among the largest undeveloped gold assets globally and is positioned in a Tier-1 mining jurisdiction.

According to last month's estimates, Northern Star has 11.2 million ounces of mineral resources and 6 million ounces of reserves. With a planned annual production of 530,000 ounces over its first decade, the project could boost Northern Star's overall production capacity to 2.5 million ounces annually by 2029.

The acquisition leverages Northern Star's expertise in mine development. The company worked on a $1 billion KCGM mill expansion—the largest Australian gold project in over a decade. Management underlined this fact as a strategic advantage in Hemi's development.

"This combination de-risks Hemi's development, enabling Northern Star to optimize the project pathway and capitalize on our extensive contractor and supplier networks," Tonkin added.

Northern Star structured the deal as an all-stock transaction, with De Grey shareholders receiving 0.119 Northern Star shares for each De Grey share, valuing De Grey at $3.3 billion (A$5 billion). This price represents a 43.9% premium to De Grey's 30-day volume-weighted average share price. 

Northern Star shareholders will own 80.1% of the combined company upon completion, while De Grey shareholders will hold 19.9%.

Both boards have unanimously approved the deal, describing it as a win for shareholders of both entities. De Grey's CEO, Glenn Jardine, highlighted that the agreement provides De Grey shareholders with continued exposure to Hemi's potential while gaining access to Northern Star's diversified asset base and proven operational capabilities.

The acquisition is slated for finalization by May 2025, pending shareholder and regulatory approvals. If it goes through, the combined Northern Star Group will operate across two Tier-1 jurisdictions and four production centers, with 74.9 million ounces of resources and 26.9 million ounces of ore reserves.

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Photo courtesy: Michael Sutton via Flickr