Gold Road Resources holds a 17.3% shareholding in De Grey Mining (ASX:DEG) which has received a binding Scheme Implementation Deed (SID) from Northern Star Resources (ASX:NST) to acquire 100% of DEG. We update our valuation for GOR factoring in the current NST offer price to acquire 100% of DEG shares. Our Price Target increases from A$2.20 to A$2.30 driven primarily by an increase in GOR’s equity portfolio valuation but offset by lower spot gold prices since our last update. We view the proposed Hemi transaction as a positive outcome for GOR which will see it realise fair value for its DEG stake and free up proceeds toward the acquisition of a second operating asset.
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