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Australia's Northern Star Resources to purchase De Grey Mining in $3.3 billion offer

Australian gold miner Northern Star Resources said on Monday it will buy De Grey Mining in an allshare offer valuing the smaller sized miner at A$ 5. billion ($ 3.3 billion).

Under the offer, De Grey investors will get 0.119 new. Northern Star shares for each share held, suggesting an offer. rate of A$ 2.08 per share.

The offer cost represents a 36.8% premium on De Grey's. Friday share close of A$ 1.52.

The deal provides Northern Star access to De Grey's Hemi gold. development project in Western Australia, which has a projection. typical gold production of 553,000 ounces per year over the. first 5 years.

De Grey's Hemi development project will deliver a low-cost,. long-life and massive cash cow in the Tier-1 jurisdiction. of Western Australia, improving the quality of Northern Star's. property portfolio to create money revenues, Stuart Tonkin,. Northern Star's CEO, said.

Northern Star already owns and runs 3 production. centers, comprising its Kalgoorlie and Yandal operations in. Western Australia and Pogo in Alaska.

Upon completion of the deal, Northern Star investors will. own about 80.1% of the merged company, while De Grey. shareholders will own the rest.

The offer provides an attractive chance for De Grey. shareholders in regards to in advance premium in addition to retaining. continuous exposure to Hemi and acquiring exposure to Northern Star's. portfolio, said Glenn Jardine, De Grey's managing director.

De Grey's directors have actually all advised. investors vote in favour of the deal, which is anticipated to. nearby late April or early May, the two companies stated.

(source: Reuters)