IGO sells Tropicana stake to Regis for $903m

The sale marks the final chapter in IGO’s strategic review of Tropicana, which included a global sales process for its stake in the gold mine.

IGO stated that the $903 million from Regis will allow the company to continue focussing on battery minerals for clean technology.

IGO managing director and chief executive Peter Bradford said the outcome was ideal.

“Since discovery in 2005, Tropicana has been an important part of IGO’s history and a key driver of our sustained growth,” he said.

“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.”

IGO’s transition to clean energy commodities follows its acquisition of a 49 per cent stake in Tianqi Australia for $1.9 billion last December.

“We are therefore delighted to have entered into an agreement to sell Tropicana to Regis,” Bradford said.

“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 1 nickel, copper, cobalt and lithium.”

IGO has been operating the Tropicana mine under a joint venture with AngloGold Ashanti for 18 years.

Regis’ acquisition of IGO’s Tropicana stake is effective from March 31 2021.

Regis managing director and chief executive officer Jim Beyer said the acquisition would provide further opportunities for Regis.

“This is a genuinely transformational transaction for Regis and one that delivers on our strategic objectives to grow as a safe, responsible, reliable, long life, low cost gold producer, generating strong financial returns,” he said.

“Diversifying the company’s robust portfolio through the acquisition of a 30 per cent interest in the Tropicana operation will deliver significant improvements in the company’s resources, reserves and annual production, along with providing additional immediate cashflows, all of which adds to the strength of our platform for undertaking further organic and inorganic growth activities.”

On Monday, Gold Road Resources confirmed that it had also made a bid to acquire IGO’s stake in Tropicana, but was unsuccessful in reaching an agreement.

Tropicana is one of the highest producing gold mines in Australia, producing 463,000 ounces in the 2020 financial year.

“I take this opportunity to acknowledge and thank AngloGold Ashanti for their partnership and support over the last 18 years. I would also like to acknowledge the IGO team,” Bradford said.

“To successfully execute the strategic review and associated divestment of Tropicana, while also progressing the investment in the lithium assets of Tianqi in Australia, demonstrates the collective commitment and strength of the IGO team.”