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Saracen and Northern Star merger progresses

Saracen Minerals and Northern Star Resources continue to make progress in their bid to execute a merger between the two mining companies.

In October, Northern Star and Saracen Mineral agreed to a merger-of-equals via a Scheme of Arrangement under which Northern Star would acquire 100% of the shares in Saracen. The $16 billion merger is expected to unlock $1.5-$2.0 billion in synergies, with the highly accretive transaction creating a Top-10 global gold company targeting production of 2 million ounces per annum exclusively in Tier-1 locations.

The companies hope to create a business with the scale, liquidity and quality of cash flows to be attractive to both gold and generalist investors, with several targets already set:

  • $16.0B pro-forma market capitalisation and A$118M net cash position;

  • Immediate production of 1.6Mozpa with a pathway to 2.0Mozpa;

  • Long-life producer with over 19Moz in Reserves and 49Moz in Resources;

  • Complementary industry-leading underground and open pit operating expertise;

  • A world-class portfolio with 3 large scale production centres (Kalgoorlie, Yandal and North America) exclusively in Tier-1 locations; and the Kalgoorlie “Golden Mile” consolidated under one owner for the first time in its 125+ year history

Saracen shareholders are to receive 0.3763 Northern Star shares for each Saracen share held at the Scheme record date estimated in February 2021. Saracen will also pay a special, fully franked dividend of 3.8¢ per Saracen share, conditional on the Scheme becoming effective and banking consents.

The Scheme has been unanimously recommended by the Board of Saracen, subject to no superior proposal emerging for Saracen and the Independent Expert concluding that the merger is in the best interests of Saracen shareholders

In November, the companies confirmed that all Northern Star financier consents and Material Saracen Facilities and Relevant Agreements consents required under relevant Scheme clauses were obtained, with those conditions precedent now satisfied. The Scheme remains subject to remaining conditions including approval from Saracen shareholders and Court approval, which is expected to be complete in January and February respectively.

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