North Star Resources (ASX:NST) announced a definitive agreement to acquire De Gray Mining (ASX:DEG) through a court-approved settlement plan. The transaction, worth approximately $5 billion, will see De Gray shareholders receive 0.119 Northern Star shares per De Gray share. This represents a premium to De Gray’s recent trading prices (De Gray 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 Gray Mining is a gold exploration and development company based 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 of mineral resources. Located in the Pilbara region, Hemi has been praised for its size, low cost and long mine life.
The agreement is in line with Northern Star’s strategic plan to expand production. With expected production of 530,000 ounces per year over the first decade, Hemi will complement Northern Star’s portfolio and add a fourth manufacturing center in Western Australia.
The scheme is expected to be implemented by May 2025, with De Gray shareholders holding around 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 one of the world’s leading gold producers. Hemi offers significant growth potential and our operating expertise will maximize its value.”
De Grey’s CEO, Glenn Jardine, highlighted the benefits for De Grey’s shareholders: “This transaction offers an attractive premium and the opportunity to maintain exposure to Hemi while benefiting from the broader portfolio and proven Northern Star’s operational capabilities”.
Northern Star shares are trading 5.77% lower at $16.50.
De Gray Mining shares are trading 28.29% higher at $1.95.