In a significant move that highlights the growing consolidation within the Australian gold sector, Northern Star Resources has announced its acquisition of De Grey Mining in an all-share deal valued at AUD 5 billion (approximately USD 3.3 billion). This acquisition positions Northern Star to expand its portfolio with access to De Grey’s world-class Hemi gold project, one of the largest undeveloped gold assets globally, located in Western Australia’s Pilbara region. 

The deal reflects a strategic response to rising gold prices, which have surged by about a third over the past year. The Australian-dollar gold price recently reached record highs, surpassing AUD 4,240 per troy ounce, creating fertile ground for mergers and acquisitions across the industry. 

Strategic Benefits for Northern Star Resources 

The acquisition of De Grey Mining is a transformative step for Northern Star Resources. It aligns with the company’s strategy to acquire high-quality, large-scale gold assets in Tier-1 jurisdictions like Western Australia. The Hemi gold project offers a low-cost, long-life development opportunity that is set to become a cornerstone of Northern Star’s future operations. 

According to Stuart Tonkin, Northern Star’s Managing Director and CEO, “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.” 

The Hemi Gold Project 

The Hemi gold project, located in the Pilbara region of Western Australia, is a standout feature of this acquisition. With a mineral resource estimate of 264 million tonnes at 1.3 grams per tonne of gold, totalling 11.2 million ounces, Hemi is forecast to produce an average of 530,000 ounces of gold annually over its first decade of operation. This development is expected to ramp up toward the end of the decade, providing Northern Star with significant growth opportunities. 

Hemi will join Northern Star’s existing production centres: Kalgoorlie and Yandal operations in Western Australia and Pogo in Alaska. The addition of Hemi will increase Northern Star’s production capacity, with the merged entity’s growth path projected to reach 2.5 million ounces per annum. 

Benefits for De Grey Shareholders 

The deal is equally advantageous for De Grey shareholders, offering an attractive upfront premium while allowing them to retain ongoing exposure to the Hemi project. Additionally, shareholders will gain exposure to Northern Star’s broader portfolio of established production assets, creating a diversified investment opportunity. 

De Grey’s Managing Director, Glenn Jardine, emphasised the value of the transaction: “The transaction that we have entered with Northern Star today is a highly attractive opportunity for De Grey shareholders in terms of the upfront premium, as well as retaining ongoing exposure to Hemi and gaining exposure to the broader Northern Star portfolio.” 

Jardine also highlighted the strong project team assembled for Hemi and expressed confidence in the integration of this team into Northern Star, ensuring the project’s continued momentum. 

Consolidation in the Gold Sector 

The Northern Star–De Grey deal is part of a broader wave of mergers and acquisitions in the Australian gold sector in 2024. Other notable deals include mergers between Red 5 and Silver Lake Resources, Westgold Resources and Karora Resources, and Greatland Gold’s acquisition by Newmont. These consolidations reflect the high demand for gold assets and a focus on operational efficiency within the sector. 

As one of Australia’s leading gold miners, Northern Star’s acquisition of De Grey underscores its commitment to strengthening its asset portfolio and delivering superior returns for shareholders. By securing the Hemi project, Northern Star positions itself as a dominant player in the Australian gold industry, poised for sustained growth in the years to come. 

What This Means for the Gold Mining Industry 

The Northern Star–De Grey merger signals a trend toward strategic consolidation, driven by the increasing complexity of mining operations, rising costs, and the need to secure high-quality assets in stable jurisdictions. For Northern Star, the acquisition represents an opportunity to optimise its operations, expand its production capacity, and capitalise on high gold prices. 

For the gold mining industry as a whole, deals like this highlight the importance of collaboration and investment in large-scale, sustainable projects. With Hemi’s long-term potential and Northern Star’s operational expertise, this partnership is likely to set a benchmark for future mergers and acquisitions in the sector. 

The acquisition of De Grey Mining by Northern Star Resources is a landmark deal that will reshape the Australian gold mining landscape. By combining Northern Star’s operational expertise with De Grey’s Hemi project, the merged entity is well-positioned to drive growth, enhance shareholder value, and meet the increasing demand for gold in global markets. As experts in the mining industry, BLJ In-situ Solutions recognises the significance of this deal and its impact on advancing Australia’s gold sector to new heights. 

Image credit: Hemi gold project. De Grey Mining