Australian gold miner Northern Star Resources said on Monday it will buy De Gray Mining in an all-share deal valuing the junior miner at A$5 billion ($3.3 billion).
As part of the transaction, De Gray shareholders will receive 0.119 new Northern Star shares for each share held, representing an offer price of A$2.08 per share.
The offer price represents a 36.8 percent premium to De Grey’s share price on Friday, which closed at A$1.52.
The transaction gives Northern Star access to the Hemi De Gray gold development project in Western Australia, which is expected to produce an average of 553,000 ounces of gold per year over the first five years.
“The Hemi De Gray development project will enable the operation of a low-cost, long-life, large-scale gold mine in a Tier-1 jurisdiction in Western Australia, improving the quality of Northern Star’s asset portfolio to generate cash income to generate,” said Stuart Tonkin, CEO of Northern Star.
Northern Star already has three production centers up and running, namely Kalgoorlie and Yandal in Western Australia and Pogo in Alaska.
Upon completion of the transaction, Northern Star shareholders will own approximately 80.1% of the combined company, with De Gray shareholders holding the remainder.
The transaction represents an attractive opportunity for De Gray shareholders in terms of premium, maintaining Hemi expertise and exposure to the Northern Star portfolio, said Glenn Jardine, De Grey’s chief executive.
De Grey’s directors have unanimously recommended that shareholders vote for the deal, which is expected to close at the end of April or early May, both companies said.
($1 = 1.5356 Australian dollars)
2024-12-02 00:11:00
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