Gold Road backs Northern Star–De Grey scheme

Gold Road Resources has thrown its support behind Northern Star’s proposed acquisition of De Grey Mining.

Northern Star announced its $5 billion acquisition of De Grey in December. If successful, the deal will provide Northern Star with access to a low-cost, long-life and large-scale gold development via the Hemi gold project in Western Australia.

Now, De Grey’s shareholders will vote on the scheme of arrangement at a meeting on April 16.

Gold Road has confirmed it will vote in favour of the scheme at De Grey’s upcoming shareholder meeting. Gold Road is currently De Grey’s largest shareholder, holding approximately 17.26 per cent of the company’s issued capital.

If approved, the Northern Star–De Grey deal is expected to be finalised on May 5.

“Gold Road advises that it is supportive of the scheme and will vote all De Grey shares it holds or controls in favour of the scheme,” Gold Road said.

“Any decision Gold Road makes regarding the Northern Star shares it will receive if the scheme completes will be made with a view to maximising value for all Gold Road shareholders.”

Hemi currently has a mineral resource estimate of 264 million tonnes at 1.3 grams per tonne of gold for 11.2 million ounces (Moz) and is forecasted to produce 530,000 ounces per annum over its first 10 years.

“The acquisition of De Grey is strongly aligned with Northern Star’s strategy and contributes to our purpose of generating superior returns for shareholders,” Northern Star managing director and chief executive officer Stuart Tonkin said in December.

“De Grey’s Hemi development project will deliver a low-cost, long-life and large-scale gold mine in the Tier 1 jurisdiction of Western Australia, enhancing the quality of Northern Star’s asset portfolio to generate cash earnings.”