Northern Star–De Grey $5bn transaction approved

The Federal Court of Australia has approved Northern Star Resources’ $5 billion acquisition of De Grey Mining under the Corporations Act 2001.

De Grey now intends to lodge a copy of the court orders with the Australian Securities and Investments Commission, at which point the scheme will become legally effective.

If this occurs, De Grey shares will be suspended from trading on the ASX at the close of trading on the same day.

Under the terms of the acquisition, De Grey shareholders will receive 0.119 new Northern Star shares for each De Grey share held at the scheme’s record date, equating to an implied offer price of $2.08 per share – a 37.1 per cent premium to De Grey’s closing share price of $1.52 on November 29 2024.

“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 2024.

“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.”

De Grey is currently developing the Hemi gold project in the Pilbara region of WA, which has a mineral resource estimate of 264 million tonnes at 1.3 grams per tonne of gold for 11.2 million ounces and is forecasted to produce 530,000 ounces per annum over its first 10 years.

“Given the high-quality nature of Hemi, De Grey is in the fortunate position to have had many avenues to progress the asset, including mergers and acquisitions,” De Grey managing director Glenn Jardine said in December.

“The transaction that we have entered with Northern Star is a highly attractive opportunity for De Grey shareholders in terms of the upfront premium, as well as retaining ongoing exposure to Hemi and gaining exposure to the broader Northern Star portfolio.”

With the gold price seeing record prices of $US3300 per ounce and being projected to increase further, this is the perfect timing for Northern Star to expand its Tier 1 gold mining portfolio.