SYDNEY (AFP) – Australian gold mining giant Northern Star Resources said yesterday it has agreed to buy a rival that owns a vast undeveloped gold project in a deal worth USD3.2 billion.
Northern Star said it would acquire full ownership of De Grey Mining along with its Hemi gold development in Western Australia’s Pilbara region.
The all-share offer valued De Grey at about AUD5 billion (USD3.2 billion), it said.
Gold prices have surged about 30 per cent so far this year, sparking a scramble for more supplies.
“De Grey’s Hemi development project will deliver a low-cost, long life and large-scale gold mine,” said Northern Star chief executive Stuart Tonkin.
In late morning trade on the Australian Securities Exchange, shares in Perth-based Northern Star fell 5.5 per cent while De Grey, also based in Perth, surged 31 per cent.
The deal, which was unanimously approved by De Grey’s board, implies a price per share more than 37 per cent above De Grey’s closing price on Friday.
