6 October 2020

Northern Star Resources Ltd (ASX: NST) and Saracen Mineral Holdings Ltd (ASX: SAR) have announced their merger.

The transaction will will unlock AUD1.5-2.0B in synergies and create a Top-10 global gold company valued at AUD16B. The merged entity will target a production of 2 Million oz per annum of gold, exclusively in Tier-1 locations.

For the first time in its +125 year history, a single entity will own the Kalgoorlie “Golden Mile”.

And from The Australian today, by Nick Evans and Bridget Carter:

Northern Star founder Bill Beament will remain the company’s executive chairman until mid-2021, before moving to a non-executive role, with Saracen boss Raleigh Finlayson acting as its managing director.

Mr Beament said in a statement the merger would create “an abundance of value” for shareholders of both companies. “Our position as joint venture partners at KCGM, the close proximity of the majority of the combined company’s assets and a host of other synergies makes this a unique opportunity exclusive to Saracen and Northern Star shareholders”.

Mr Finlayson said the deal was the “one of the most logical and strategic M&A transactions the mining industry has seen… The benefits which will flow to Saracen shareholders from this merger are significant. The pre-tax synergies alone are expected to be worth in the order of A$1.5 to A$2.0billionover the next 10 years”.

The announcement comes as gold miners continue to experience buoyant conditions thanks to the soaring price of the commodity.

The Australian gold price hit a record of $2873.56 per ounce on August 6, driven by the weakening US dollar and the search by investors for diversification.

At that time, gold was up 33 per cent from the start of the year.