Northern Star is paying a 37.1 per cent premium, based on De Grey's closing share price on Friday. De Grey shareholders will own 19.9 per cent of the combined company.
"The acquisition of De Grey is strongly aligned with Northern Star's strategy and contributes to our purpose of generating superior returns for shareholders," said Northern Star managing director and chief executive Stuart Tonkin.
"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 has entered a binding SID for Northern Star to acquire 100% of De Grey via a Scheme of Arrangement, valuing De Grey at ~$5B. Hemi Gold Project will join $NST's portfolio. Full details: — De Grey Mining (@DeGreyMining) https://t.co/fhEApND79t#DeGreyMining $DEG pic.twitter.com/lymhywFVD9December 1, 2024
Discovered in late 2019, De Grey's Hemi project is 85km south of Port Hedland.
De Grey estimates it will generate annual gold production of 530,000 ounces a year in its first 10 years.
The project was nearly shovel-ready, with a number of key approvals in place, the companies said. Production is projected to begin in the third quarter of 2026/27.
De Grey estimates it will spend $120 million to $150 million locally once operations begin, with another $15 million invested in Port Hedland community projects.
Late Monday morning, De Grey shares were up 28.1 per cent to $1.9475, while Northern Star shares had dipped 5.9 per cent to $16.48.
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