 has announced its support of Northern Star Resources (ASX: NST) acquisition of De Grey Mining (ASX: DEG).){kind=link}
Northern Star closing in on $5b bid for De Grey
Gold Road Resources (ASX: GOR) has announced its support of Northern Star Resources (ASX: NST) acquisition of De Grey Mining (ASX: DEG).
Gold Road has advised that it has the intention to vote all the De Grey shares it holds in favour of the scheme.
Gold Road holds approximately 17.26% of De Grey shares, which are valued at over $1b, making it the company’s largest shareholder.
Northern Star is Australia’s largest listed gold miner, valued at almost $25b, and will know if its bid has been successful following a De Grey shareholder meeting on April 16th.
The target of this acquisition and De Grey’s most lustrous asset is the Hemi gold project in the Pilbara region of WA.
Hemi is one of the largest undeveloped gold projects in a Tier-1 mining jurisdiction globally. Hemi boasts mineral resources of 11.2moz and ore reserves of 6moz and a forecast annual gold production of 530kozpa over its first decade.
The high value of the project is attributed to its size, grade continuity and its potential to be mined by large scale and low-cost open pit mining.
Northern Star’s managing director and chief executive Stuart Tonkin said that the acquisition of De Grey strongly aligns with Northern Star’s strategy and benefits shareholders.
“De Grey’s Hemi development projects will deliver a low-cost, long-life and large-scale gold mine in the Tier-1 jurisdiction of WA, enhancing the quality of Northern Star’s asset portfolio to generate cash earnings,” he said.
“We look forward to working with the De Grey team and continuing the strong relationships with the Kariyarra people and other Traditional owner groups along with local communities as we advance this project together.”
Increasing gold prices have recently sparked numerous billion-dollar ASX deals including Ramelius Resources (ASX: RMS) $2.4b acquisition of Spartan resources (ASX: SPR).
Johannesburg-based gold giant, Gold Fields (ASX: GFI), also attempted a takeover bid for Gold Road earlier this year. The offer would have involved Gold Fields consolidating ownership of the high-quality, long-life Gruyere mine, in which the companies are joint venture partners.
Gold Road chief executive Duncan Gibbs deemed the takeover proposal of $3.3b as aggressive and hostile as it severely undervalued the company.