IGO sells its non-aligned Tropicana gold stake for A$903 million
Regis Resources (ASX:RRL) said on Tuesday it is acquiring a 30% interest in the Tropicana GoldProject for A$903 million (US$687 million) from IGO.
Tropicana is a low-cost, high-margin, top-five producing Australian open-pit and underground gold mine located in Western Australia. It is one of the largest gold mines in Australia with gold production of 463koz in FY20 and guidance of 380koz – 430koz FY21E (100% basis), according to a news release by Regis.
AngloGold Ashanti is 70% partner in Tropicana. IGO owns the other 30%.
Regis said it intends to fund the acquisition through a combination of a fully underwritten equity raising of up
to A$650 million via an institutional placement and an accelerated pro rata non-renounceable entitlement
offer and a new A$300 million loan facility.
Tropicana is located 330km north-east of Kalgoorlie in Western Australia.
IGO is an ASX-listed exploration and mining company, which is shifting to the energy storage sector. IGO said the sale allows the company to focus on clean energy.
"While IGO continues to believe that Tropicana is a high-quality tier-1 gold asset with strong upside potential, it is no longer aligned with our focus on commodities critical to clean energy. We are therefore delighted to have entered into an agreement to sell Tropicana to Regis," said IGO’s Managing Director and CEO, Peter Bradford.
"This transaction, along with the recent investment in Tianqi Lithium assets in Australia, solidifies IGO’s position of becoming a globally relevant pure-play battery minerals producer and developer, uniquely exposed to tier nickel, copper, cobalt and lithium."