DEG +29.61% & NST -5.25% following news that NST has agreed to acquire DEG in an all-stock deal worth A$5 billion.
The acquisition enhances Northern Star’s production potential while addressing aging asset concerns. NST secures a key asset in the Hemi gold project in W.A, one of Australia’s largest undeveloped gold mines.
- De Grey shareholders receive 0.119 NST shares per DEG share
- Implied offer price of $2.08 on DEG’s uninterrupted share price at close on Friday close, a 38% premium.
- NST positioning to increase annual production to 2.5mn oz by 2029
The deal bolsters Northern Star’s portfolio by securing a world-class asset, but the share price reaction would say the market thinks they paid too much. If the gold price remains elevated in the medium-long term, this will be considered a winning deal.
- We like the deal given NST has the expertise, and capital (a whopping $1.3bn), to get the Hemi project off the ground – something De Grey might have struggled to do otherwise.

