Gold Road Resources (ASX : GOR) has finally thrown its support behind Northern Star Resources’ (ASX : NST) takeover of De Grey Mining (ASX : DEG) for $5 billion, which will set up the miner for a >$1 billion pay day.
Based on De Grey’s April 11 share price, Gold Road’s 27.36% share is worth over an eye-whopping $1 billion.
De Grey owns the 11.5 million ounce Hemi gold project in WA’s Pilbara region, one of the world's largest undeveloped gold projects.
If the deal gets approved by De Grey shareholders on 16 April, a second Federal Court hearing is expected on 5 May.
“Any decision Gold Road makes regarding the Northern Star shares it will receive if the scheme completes will be made with a view to maximising value for all Gold Road shareholders,” Gold Road said in today’s ASX announcement.
Takeover attention
Gold Road has been the attention of an M&A spat with its Gruyere gold project JV partner, $35 billion market-capped Gold Fields, with each company trying to takeover one another amidst a peaking gold bull market.
Investor sentiment for gold – trading at record prices of >US$3,200/oz, is reflected in recent M&A activity, including Ramelius Resources (ASX: RMS)' recent $2.4 billion bid to acquire Spartan Resources (ASX: SPR).
Find out more: Open-pit warfare: JV partners battle over WA gold mine
Back in January, Euroz Hartley had a $2.65 price target and buy recommendation on the $3 billion-plus miner, and has well-outperformed that, last trading at $3.05 per share.
