Northern Star Resources Acquires De Grey Mining in $3.2 Billion Australian Gold Sector Deal
Two of Australia’s largest gold miners have struck a groundbreaking AU$5 billion ($3.2 billion) takeover agreement as the gold sector experiences a surge in consolidation driven by record-high commodity prices.
Northern Star Resources, operator of the iconic Super Pit gold mine in Western Australia, announced the acquisition of De Grey Mining in an all-share deal.
The transaction represents a 37% premium to De Grey’s share price, with its shareholders set to hold a 20% stake in the combined entity.
This acquisition marks another significant milestone in global gold sector consolidation. Last year, U.S.-based Newmont acquired Newcrest, Australia’s largest gold producer, for $19 billion.
Other notable deals include Gold Fields’ $1.6 billion acquisition of Canada’s Osisko Mining and AngloGold Ashanti’s £1.9 billion purchase of UK-listed Centamin.
Following the announcement, Northern Star’s shares fell by 5%, while De Grey’s stock surged 28%.
The acquisition grants Northern Star control over the promising Hemi prospect in the Pilbara region of northern Western Australia. Expected to produce over 500,000 ounces of gold annually in its first decade, Hemi is considered a high-quality, long-life asset.
“Hemi is a rare, high-caliber deposit in a stable jurisdiction, and it was critical to keep it in Australian hands,” said Stuart Tonkin, Northern Star’s CEO.
The merger positions Northern Star as a top 10 global gold producer, with two of the world’s largest gold mines under its portfolio.
Northern Star has solidified its reputation as a leader in revitalizing underperforming gold assets. The company’s acquisition of the Super Pit—officially the Fimiston Open Pit—was a key milestone.
Spanning 3.5 kilometers in length, 1.5 kilometers in width, and 600 meters in depth, the mine came under single ownership in 2021 for the first time in its 130-year history.
A $1.5 billion upgrade to the Kalgoorlie operations, announced last year, is set to double processing capacity by 2026. Analysts view the De Grey acquisition as strategically sound, predicting that Northern Star’s gold production could reach 2.5 million ounces annually by the decade’s end, cementing its position among the world’s largest producers.
JPMorgan analysts noted, “This acquisition marks a shift from Northern Star’s traditional strategy of acquiring and revitalizing older assets. However, with major projects like Kalgoorlie progressing well, we see minimal risk to delivery.”
Northern Star’s bold move underscores Australia’s leading role in the global gold mining sector, highlighting the industry’s dynamic transformation amid record prices and growing demand.
