Northern Star Completes $3.25bn De Grey Mining Acquisition

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Northern Star Resources has solidified its position as a heavyweight in global gold production through its recently finalized acquisition of De Grey Mining. The all-scrip deal, valued at AU$5 billion, gives Northern Star full control of the highly promising Hemi gold project in Western Australia’s Pilbara region.

This transaction marks one of the largest mining acquisitions in Australia in recent years. De Grey shareholders now hold roughly 19 percent of the combined entity, while Northern Star absorbs a cornerstone asset that could dramatically boost its annual output.

The Hemi gold project introduces scale and efficiency to Northern Star’s portfolio

De Grey Mining’s Hemi project stands out not only for its size but for its low-cost development model. Discovered in 2019, Hemi has since emerged as a Tier-1 gold deposit with a mineral resource of 10.5 million ounces. A definitive feasibility study released in 2023 outlined plans for a 10.8 million-ton-per-year processing plant, forecasting average annual gold production of 530,000 ounces over the first decade of operation.

The project’s pre-tax net present value (NPV) has been estimated at AU$4.7 billion, with an internal rate of return (IRR) of 37 percent. Capital expenditure is projected around AU$1.3 billion, making it one of the most cost-efficient large-scale projects in Australia. Its location in a politically stable, resource-rich jurisdiction adds to its appeal.

Why this deal matters for the Australian gold sector and global investors

Australia remains the world’s second-largest gold producer, trailing only China, and Western Australia contributes roughly 70 percent of the country’s output. By incorporating Hemi into its portfolio, Northern Star not only scales up but also diversifies its operations away from older assets, many of which are increasingly expensive to maintain.

This acquisition follows broader trends in the mining sector, where capital consolidation is becoming a strategic response to escalating exploration costs and geopolitical uncertainty. By acquiring Hemi at the pre-production stage, Northern Star avoids many of the valuation risks associated with brownfield expansions while securing a long-life, low-cost asset.

Institutional investors have responded favorably to the merger, citing improved project visibility and enhanced operational synergies. Northern Star is now forecast to produce over 2 million ounces of gold annually, placing it firmly in the top five global gold producers.

M&A and the new face of Australian mining in 2025

The Northern Star–De Grey deal exemplifies a broader consolidation trend in Australian mining. As gold prices hover above US$2,000 per ounce, producers are under pressure to scale efficiently and improve cost structures. Acquiring high-grade, low-cost assets like Hemi reflects this strategic imperative.

Furthermore, Australia’s continued investment appeal lies in its transparent regulatory framework and supportive infrastructure. For Northern Star, leveraging this environment while integrating De Grey’s assets sets the stage for stronger export volumes and sustained investor confidence.

With construction of the Hemi project slated to begin in 2025 and first production targeted for late 2027, the market will be watching closely as Northern Star translates this acquisition into measurable output. If successful, it could signal a new era of efficiency-led growth in Australian mining, driven by data, capital discipline and asset optimization.

Sources:

• Mining Technology