De Grey Mining’s top shareholder still won’t bite on $5b Northern Star takeover, but says ‘options open’

Gold Road Resources chief executive Duncan Gibbs has implied Northern Star Resources’ proposed $5 billion purchase of De Grey Mining is no sure thing and that the miner is keeping all options open should “other scenarios” emerge. With a 17.3 per cent in De Grey, the West Perth-based mid-tier with operations in the north-eastern Goldfields will count as a crucial vote in Northern Star’s proposed takeover, which was revealed at the end of last year. The acquisition needs 75 per cent of shareholders to vote in favour for the deal to cross the line. Taking questions from analysts in a quarterly update on Wednesday, Mr Gibbs did not explicitly indicate whether the company was leaning towards backing the deal, but he pushed back on market assumptions the blockbuster deal would get through. “I really don’t want to get into speculating all around, because the Northern Star offer, I think a lot of the market, like you’re doing, is banking it’s going to get done. But you know, of course, there’s other scenarios that may or may not emerge,” he said. “We don’t want to be on record as indicating one position or another, because simply we want to be able to keep all of our options open, which is what’s in the best interest of Gold Road shareholders.” Gold Road had at one stage been considered a potential suitor for De Grey, but the target seemingly fell out of financial reach as its share price swelled more than 71 per cent throughout 2024. Gold Road’s stake is worth about $800 million, based on Norther Star’s implied $2.08-a-share offer. And there’s still time for an even bigger fish to come along with a counter-offer, though Northern Star will have exclusive matching rights on any new proposal put forward. Mr Gibbs was not forthcoming with what the business might do with the huge cash injection, if it decided to accept the offer or sell its stake. “Probably people are missing that if we sell the shares, ultimately, we’ll have quite a big tax event that needs to be considered,” he said. It would also be up to the board as to whether shareholders saw any of the proceeds, the CEO responded when asked about a special dividend. “That’s three steps down the track. The ASX takes a very dim view of companies flagging potential future change on the dividends and dividend policies. So it’s really not a question I can answer unfortunately.” Gold Road churned out a record 91,631 ounces from its flagship Gruyere asset, which it owns jointly with South Africa’s Gold Fields. But annual production for the calendar year of 287,270oz fell short of guidance, and production costs were above a targeted band of between $2050 and $2200 an ounce. Gold sales were strong, with an ounce fetching $4093 during the quarter, and its share price was up nearly 4.6 per cent by late afternoon trade. In more quarterly updates, fellow mid-tier Ramelius Resources shares were lifted on news its full-year production target of between 270,000oz and 300,000oz was on track. West African-focused operator Perseus Mining was also in the green, trading higher by more than 4 per cent after reporting increased quarterly production and bringing down production costs.