Northern Star Resources (NST) M&A Announcement summary

Deal rationale and strategic fit

• The merger creates a global gold leader, adding Hemi, a large-scale, low-cost, Tier-1 gold project in Western Australia, and targeting ~2.5Mozpa production by FY29.

• Hemi's scale, low cost, and strong ESG credentials align with the acquirer's strategy, enhancing portfolio quality and growth.

• De Grey shareholders receive immediate premium and future upside, retaining a 19.9% stake in the enlarged group.

• The acquirer's operational expertise is expected to optimise Hemi's value and leverage complementary project timelines.

• The combined entity will operate in two low-risk jurisdictions, with Hemi as a fourth high-quality production centre.

Financial terms and conditions

• The transaction is an all-scrip scheme of arrangement: 0.119 new acquirer shares per target share, implying A$2.08 per share and valuing the target at approximately A$5 billion.

• The offer represents a 37.1% premium to last close and 43.9% to 30-day VWAP.

• Target shareholders will own 19.9% and acquirer shareholders 80.1% of the combined group.

• The deal preserves the acquirer's balance sheet, enabling funding for KCGM expansion and Hemi development.

• The deal is unanimously recommended by the target's board, subject to no superior proposal and a positive independent expert report.

Synergies and expected cost savings

• The combined group targets ~2.5Mozpa gold production by FY29, leveraging operational efficiencies and portfolio management.

• Hemi's integration is expected to be valuation and free cash flow accretive at first production.

• Operational and development expertise will be leveraged to optimise Hemi's value, with efficiencies from complementary project timelines.

• All-scrip structure preserves financial flexibility for further growth and capital management.