NST - Northern Star Resources

[finicky]

The outlook for miners

UBS is equally bullish on the gold miners, noting that the key catalyst for them to outperform remains delivering on production guidance and subsequent generation of free cash flow.

"The combination of already strong balance sheets and strong cash generation should drive further cash returns (dividends and buy-backs)".

Top picks
UBS’ pick of the litter is Northern Star (ASX: NST), within a basket of Perseus (ASX: PRU), Gold Road Resources (ASX: GOR), Genesis Minerals (ASX: GMD), and De Grey Mining (ASX: DEG).

Interestingly, despite the gold price forecast update, UBS has left its ratings for individual gold stocks unchanged. However, it has lifted target prices by up to 4%.

"We remain overweight the gold sector given our constructive outlook for the price and continue to see value in the equities".

Below is a table from the research note, summarising UBS rating on the ASX gold names in coverage.

What others have to say​

For each of the names that UBS likes (NST, PRU, GOR, GMD and DEG), I’ve done a sweep of the Livewire platform to see what other fund managers/investment banks think.

Northern Star​

Macquarie is also bullish on NST, with my colleague Kerry Sun writing the following in a wire in September;

Among the large-cap gold stocks, Northern Star stands out with the most significant EPS upgrades, averaging 25% over the next five years. This is attributed to its higher cost base, which provides greater leverage to gold price movements, and its lack of copper exposure.

Although it’s a while back, Daniel Sullivan, Head of Global Natural Resources and Portfolio Manager at Janus Henderson Investors, nominated Northern Star and De Grey Mining as his top picks in the gold space back in April.

UBS: The bullion bull run is set to continue (and the 5 ASX stocks they like most)

We unpack UBS' bullish thesis for gold, and leverage insights from Livewire to assess the five stocks it likes.

www.livewiremarkets.com

 

[divs4ever]

NORTHERN STAR AGREES TO ACQUIRE DE GREY

▪ Northern Star agrees to acquire De Grey by way of a recommended scheme of arrangement, with DeGrey shareholders to receive 0.119 new Northern Star shares for each De Grey share held
▪ De Grey’s flagship project, Hemi, provides Northern Star with an additional Tier-1
1future low-cost production centre, aligning to its strategy to deliver superior shareholder returns

Northern Star Resources Ltd (ASX: NST) (Northern Star) and De Grey Mining Ltd (ASX: DEG) (De Grey) are pleased to announce that they have entered into a binding Scheme Implementation Deed (SID) under which it is proposed that Northern Star will acquire 100% of De Grey by way of a Court-approved scheme of arrangement under Part 5.1 of the Corporations Act 2001(Cth) (Scheme) (the Transaction).Upon implementation of the Transaction, Northern Star will acquire De Grey and its flagship project, Hemi, a low-cost, long-life and large-scale gold development project in the Pilbara region of Western Australia.
The Hemi Project is one of the largest undeveloped gold projects in a Tier-1 mining jurisdiction2 globally, with Mineral Resources of 11.2Moz and Ore Reserves of 6.0Moz3 and forecast annual gold production of 530kozpa4 over its first 10 years.
Northern Star’s extensive exploration, mine development and operating expertise is expected to unlock the long term value potential of the Hemi Project, which in turn, is forecast to generate superior returns to all shareholders.
The combined Northern Star Group will operate across two Tier-1 jurisdictions2 and four production centres, with Proforma Mineral Resources of 74.9Moz and Ore Reserves of 26.9Moz5.
Post the KCGM Mill Expansion and the development of Hemi,Northern Star is expected to be positioned in the first half of the global cost curve.
Under the terms of the SID, De Grey shareholders would be entitled to receive 0.119 new Northern Star shares for each DeGrey share held at the record date for the Scheme (Scheme Consideration), representing an implied offer price of A$2.08 per De Grey share and a total equity value for De Grey of approximately A$5 billion on a fully diluted basis6.
The Scheme is unanimously recommended by the Board of Directors of De Grey, and each De Grey Director intends to vote all De Grey shares that they hold or control in favour of the Scheme, in each case, subject to no Superior Proposal (as defined in the SID)emerging and the Independent Expert concluding (and continuing to conclude) in the Independent Expert’s Report that the Scheme is in the best interest of De Grey shareholders.
The Scheme Consideration represents a significant and attractive premium of
:▪ 37.1% to De Grey’s last closing share price of A$1.52 per share on 29 November 20246; and
▪ 43.9% to De Grey’s 30-day volume-weighted average price of A$1.45 per share up to and including 29 November 20246.
Upon implementation of the Scheme, Northern Star shareholders will own approximately 80.1% of the combined Group and De Grey shareholders will own approximately 19.9%.
1 A Tier-1 gold asset is defined as an operation producing in excess of 500 kozpa of gold per annum with a 10+ year mine life.
2 Western Australia ranked 4th and Alaska ranked 11th in the Investment Attractiveness Index published by the Fraser Institute Annual Survey of Mining Companies 2023 (May 2024).
3Mineral Resources and Ore Reserves estimates as released to the ASX in De Grey’s announcement “Hemi Gold Project Mineral Resource Estimate 2024” on 14 November 2024.
4 Estimated Hemi production based on September 2023 DFS – see De Grey’s “Hemi Gold Project – DFS Outcomes” ASX releases of 28 September 2023.
5 Proforma based on the aggregate Mineral Resources and Ore Reserves (with rounding) of each of Northern Star as at 31 March 2024 and De Grey as at November 2024, with the underlying,respective Mineral Resources and Ore Reserves estimates as released to the ASX in Northern Star’s announcements “Resources, Reserves and Exploration Update” on 2 May 2024 and in De Grey’s announcement “Hemi Gold Project Mineral Resource Estimate 2024” on 14 November 2024 and “Hemi Gold Project – DFS Outstanding Financial Metrics” released to the ASX on 28 September,2023, as summarised on pages 6 & 7.
Mineral Resources are presented inclusive of Ore Reserves.6 Based on the closing price of Northern Star shares of A$17.51 on 29 November 2024.
ASX Announcement:2 December 2024 Page 2
Northern Star’s Managing Director and CEO, Stuart Tonkin, said:“The acquisition of De Grey is strongly aligned with Northern Star’s strategy and contributes to our purpose of generating superior returns for shareholders.
De Grey’s Hemi development project will deliver a low-cost, long-life and large-scale goldmine in the Tier-1 jurisdiction of Western Australia, enhancing the quality of Northern Star’s asset portfolio to generate cash earnings.“We remain committed to our profitable growth plan to 2Mozpa by FY26, with the KCGM Mill Expansion and addition of Hemi propelling a significant further increase in Northern Star’s production to ~2.5Mozpa by FY297.
This reinforces Northern Star’s position as the leading Australian ASX-listed gold company and a top 10 global gold major.
“The addition of the Hemi Project leverages Northern Star’s inbuilt project capability with the project team expected to transition from the Mill Expansion to Hemi.
The 27Mtpa KCGM Mill Expansion is the largest Australian gold project in over 10 years and provides Northern Star with the unique opportunity to de-risk the Hemi development pathway through our experience and relationships with contractors and suppliers.
“We recognise the excellent work the De Grey team has completed to date in taking the asset from an exploration discovery to a near shovel-ready mine.
We look forward to working with the De Grey team and continuing the strong relationships with the Kariyarra people and other Traditional Owner groups along with local communities as we advance this Project together.”

De Grey’s Managing Director, Glenn Jardine, added:“Given the high-quality nature of Hemi, De Grey is in the fortunate position to have had many avenues to progress the asset,including M&A.
The Transaction that we have entered with Northern Star today is a highly attractive opportunity for De Grey shareholders in terms of the upfront premium, as well as retaining ongoing exposure to Hemi and gaining exposure to the broader Northern Star portfolio.“We have assembled a wonderful project team to undertake the work required to bring this generational asset to its current position, and the integration of this team into Northern Star will ensure continued momentum and sharing of Hemi knowledge.“
The Transaction enables De Grey’s shareholders to retain material exposure to Hemi, whilst becoming approximately a 19.9% shareholder in a globally significant ASX-50 gold company with a portfolio of producing assets, highly experienced management and track record of paying dividends.
Northern Star’s demonstrated skillset across exploration, development, and production,will also maximise Hemi’s potential post development.“I would like to thank the De Grey employees and my fellow Directors for their tireless work and achievements over the past fiveyears, which has created significant shareholder value and de-risked Hemi to facilitate a transaction of this nature, and we look forward to implementing the transaction.
“Alongside my fellow Directors, I have no hesitation in supporting the Transaction and am excited for the future prospects of the combined Group.”

INVESTOR WEBCAST Northern Star & De Grey will host an investor conference call to discuss the Transaction today, 2 December 2024 at 8.30am AWST / 11.30am AEDT.

Webcast link: https://loghic.eventsair.com/576938/254222/Site/Register

i hold NST ( 'free-carried' )

 

[finicky]

The Market Matters verdict on the De Grey acquisition from a few days ago.

ASX:NST 05/12/2024

A blockbuster acquisition for Northern Star (NST)​

The ASX woke on Monday to the news that Australia’s largest gold miner since the takeover of Newcrest, $19bn Northern Start (NST), was set to acquire De Grey Mining (DEG) for around $5bn in an all-scrip bid. DEG Hemi mine is a large and high-grade deposit, close to local infrastructure, in a stable legal jurisdiction and possessing a low All-in Sustaining Cost (AISC) estimated at $US1,250 – an exciting margin when we consider the likes of Citi, UBS, and Goldman Sachs recently upgraded their forecast consensus estimates for 2025 to around $US3,000/oz.

We like the deal announced for NST, enhancing it’s production potential while addressing ageing asset concerns. NST is set to secure a key asset in the Hemi gold project in W.A., one of Australia’s largest undeveloped gold mines. NST is positioning to increase annual production to 2.5mn oz by 2029 with the deal; yesterday’s knee-jerk -5.3% drop suggests that some think they overpaid; we disagree as assets are likely to increase in price as M&A is expected to increase across the space.

In our opinion, NST has been wise to “go early” as the competition for assets will likely intensify in 2025. In conclusion, we like the deal, given that NST has the expertise and capital (a whopping $1.3bn) to get the Hemi project up and firing. Note, De Grey’s asset is probably going to be 20 million ounces of gold by the time they’ve finished drilling!

• While we remain bullish toward gold, NST is an excellent large ASX proxy enhanced by its acquisition of DEG.

Held
Holding

 

[divs4ever]

The Market Matters verdict on the De Grey acquisition from a few days ago.

ASX:NST 05/12/2024

A blockbuster acquisition for Northern Star (NST)​

The ASX woke on Monday to the news that Australia’s largest gold miner since the takeover of Newcrest, $19bn Northern Start (NST), was set to acquire De Grey Mining (DEG) for around $5bn in an all-scrip bid. DEG Hemi mine is a large and high-grade deposit, close to local infrastructure, in a stable legal jurisdiction and possessing a low All-in Sustaining Cost (AISC) estimated at $US1,250 – an exciting margin when we consider the likes of Citi, UBS, and Goldman Sachs recently upgraded their forecast consensus estimates for 2025 to around $US3,000/oz.

We like the deal announced for NST, enhancing it’s production potential while addressing ageing asset concerns. NST is set to secure a key asset in the Hemi gold project in W.A., one of Australia’s largest undeveloped gold mines. NST is positioning to increase annual production to 2.5mn oz by 2029 with the deal; yesterday’s knee-jerk -5.3% drop suggests that some think they overpaid; we disagree as assets are likely to increase in price as M&A is expected to increase across the space.

In our opinion, NST has been wise to “go early” as the competition for assets will likely intensify in 2025. In conclusion, we like the deal, given that NST has the expertise and capital (a whopping $1.3bn) to get the Hemi project up and firing. Note, De Grey’s asset is probably going to be 20 million ounces of gold by the time they’ve finished drilling!

• While we remain bullish toward gold, NST is an excellent large ASX proxy enhanced by its acquisition of DEG.

Held
Holding

maybe punters ( BIG and small ) were expecting a special div. or buy-back before this announcement

probably a little bit presumptuous given NST's ( fairly ) aggressive expansion during the 11 years i have been holding it

under the previous CEO , NST had a good record of getting mines into production in a timely manner ( i was always apprehensive of the Northern American acquisition

i hold NST 'free-carried' )

while i am not panicking , i am also unlikely to be adding more this side of $8

 

[rcw1]

Good morning

update:
15 minute chart

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