Join our daily newsletter At The Bell to receive exclusive market insights
- Large-cap Northern Star Resources has completed final checks to absorb a small-cap gold explorer
- The company finally increased its majority holding in gold miner Echo Resources — spawning from a $139 million deal back in August
- At the time, Northern Star offered Echo punters a massive premium of 33 cents per share — ironically kicking off Echo shares to boost over 30 per cent after the proposal
- Northern Star lobbed the deal to secure Echo’s “Yandal Gold” project, which holds 1.8 million ounces of gold in Western Australia
- With Echo Resources now officially delisted, top-200 Northern Star is trading for $9.85 per share today after a 0.51 per cent premium
Gold explorer Northern Star Resources (NST) has inched its holding in once-ASX listed Echo Resources to completely absorb the company.
This process caps off Echo Resources delisting from the Australian market, now completely owned and operated by Northern Star.
It comes as no surprise for punters to see the top-200 Northern Star, with a market cap of $6.35 billion, eat up the much smaller 2004-founded Echo Resources.
The takeover first began in August, with Northern Star offering $139 million to Echo investors — at 33 cents each share. This deal represented a 42.1 per cent premium to Echo’s 10-day weighted average during the proposal.
At the time of bid, with Echo still existing on the market, the small-cap explorer’s shares jumped over 30 per cent to 32.5 cents each. The last time Echo ever traded was on August 19 this year.
The offer by Northern Star was more than funded, as the large-cap possessed cash and equivalents of $361 million — on top of an on-hand $200 million debt facility.
At the centre of the takeover bid was Northern Star eyeing the Yandal Gold project, north of Kalgoorlie and close to Northern’s existing Jundee project.
Yandal is a high-quality project with 1.8 million ounces of gold down below, paired with a 1.8 million ounce-per-annum processing plant.
Overnight this Thursday, gold gained a slight 0.4 per cent gain for a valuation of $2160 per ounce.
Shares in Northern Star have increased 0.51 per cent today since market open, now valued for $9.85 each.
