Australia’s De Grey Mining Ltd saw its shares surge on Monday after Northern Star Resources announced a stock-based acquisition deal valued at approximately A$5 billion ($3.25 billion). This deal, which still requires shareholder and regulatory approval, will make Northern Star a leading global gold producer.
Under the agreement, De Grey shareholders will receive 0.119 Northern Star shares for each De Grey share, giving them an implied price of A$2.08 per share. This represents a 36.8% premium over De Grey’s closing price on November 29. Once completed, Northern Star shareholders will own 80.1% of the combined company, while De Grey shareholders will hold 19.9%.
De Grey’s shares rose nearly 30% to A$1.97 following the news, while Northern Star’s stock fell by 6.1%. Shares of Gold Road Resources, another gold miner, also jumped more than 12%, reflecting growing enthusiasm in the Australian gold sector.
The acquisition focuses on De Grey’s Hemi Gold Project in Western Australia, one of the world’s largest undeveloped gold assets. The project has reserves of six million ounces and is expected to produce 530,000 ounces annually during its first ten years. Northern Star plans to speed up Hemi’s development by combining its expertise with De Grey’s capabilities.
Northern Star CEO Stuart Tonkin described the acquisition as a transformative step toward boosting annual gold production to 2.5 million ounces by 2029. He noted that adding Hemi to the company’s portfolio would strengthen its position as a low-cost producer in top-tier mining locations. De Grey CEO Glenn Jardine said the deal offers shareholders a chance to benefit from Hemi’s future growth while gaining access to Northern Star’s diversified operations and stable dividends.
The boards of both companies have fully endorsed the deal, which will go to a shareholder vote in April 2025. If approved, final regulatory clearance is expected by May.
