Gold miner mega merger a step closer
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    Gold miner mega merger a step closer

    Alice Shen, Senior Associate - Investments & Capital Markets
    27 January 2021

    Saracen (ASX: SAR) shareholders have voted overwhelmingly in favour of the proposed merger with Northern Star Resources (ASX: NST), according to a recent company announcement. Subject to Supreme Court of Western Australia approval of the scheme, the newly formed global top 10 gold miner could generate $1.5 to 2 billion from synergies, economies of scale and strong free cash flows1.


    Source: Bloomberg as of 21 Jan 2021

    On 20 January, NST released its December quarterly report. Highlights include:

    • 11% QoQ growth in gold sold for the quarter totalling 252,899oz, sitting on the top range of the guidance 226,000 – 254,000oz
    • Strong balance sheet performance – corporate debt reduced by $125 million; cash, bullion and investments of A$372 million at calendar year end
    • Free underlying cashflow totalled A$93 million, along with A$63 million investment in growth capital and exploration

    The market has also responded positively – trading volumes of both NST and SAR are on the rise since 11 Jan 2021 in light of the deal.


    Source: Bloomberg as of 21 Jan 2021

    1Saracen media release, 15 January 2021

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