IGO is looking to expand its footprint of nickel operations in Western Australia, today confirming it is in preliminary discussions about a potential takeover of Western Areas.
In response to media speculation about a transaction, IGO stated that it was speaking with Western Areas about a “change of control proposal”.
“IGO confirms that it is in preliminary discussions with Western Areas in relation to a change of control proposal and the basis upon which engagement and due diligence could proceed,” the company stated.
“Given the preliminary stage of these discussions, there is no certainty as to whether a definitive transaction will eventuate, or, as to the terms and conditions of any such transaction.”
Western Areas also released a statement in response to the speculation, acknowledging media reports about the potential deal.
“Western Areas Ltd has noted media reports published by The Australian Financial Review in relation to a potential transaction involving Western Areas,” the company stated.
A takeover of Western Areas would give IGO control of the Forrestania nickel mine in Western Australia.
Forrestania is one of Australia’s highest grade mines for nickel, which is regarded as a commodity essential to the world’s clean energy revolution.
Western Areas also owns the Cosmos nickel operation in Western Australia, where it is developing its third nickel mine at the operation.
The company’s market capitalisation sits at $797.67 million at the time of writing.
IGO offloaded its stake in the Tropicana gold mine to Regis Resources for $903 million earlier this year as part of a strategy to solely focus on clean energy technologies.
The company also closed a $1.9 billion deal to acquire a 49 per cent stake in Tinaqi Lithium’s assets.
“Our new partnership with Tianqi promises to be truly transformational for IGO and delivers on our strategy focused on the clean energy revolution,” IGO managing director and chief executive officer Peter Bradford said in June.
“We are incredibly excited to commence this journey with Tianqi as we build a globally relevant lithium business delivering high quality, responsibly produced lithium products to global customers while generating strong financial outcomes for shareholders.”