(Bloomberg) — Northern Star Resources Ltd. agreed to buy smaller Australian rival Saracen Mineral Holdings Ltd. to boost gold output amid surging prices and create a top 10 global producer with a market valuation of about A$16 billion ($11.5 billion).
Adding Saracen’s assets in Australia will put the company on track to produce 2 million ounces a year from fiscal 2027 and deliver as much as A$2 billion in operational savings, Perth-based Northern Star, the country’s second-largest gold miner, said Tuesday in a statement.
The combination of the companies, which already jointly run Australia’s giant Super Pit may mark a revival of major deal-making in the gold sector, which has ebbed since a two-year long spree through last year that included Newmont Corp.’s mega-merger with Goldcorp Inc.
Deals in the sector worth about $9.8 billion have been completed, or agreed, so far this year, compared with about $26 billion in 2019, according to data compiled by Bloomberg. Northern Star has added more than $1 billion of acquisitions since August 2018, the data show.
“Between both portfolios we’ve got so many growth options. We’re not planning to divest anything and in fact we’re growing our production,” Northern Star Executive Chairman Bill Beament said on an investor call. “We’ve got plenty of feed to keep our expanded processing plants going for decades to come.”
The producer will operate three clusters of assets, in the Kalgoorlie and Yandal regions of Western Australia and around the Pogo mine in Alaska, and be in a position to accelerate growth opportunities, according to the statement.
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Collaboration between the two companies this year at