The discussions are in a preliminary stage and there is no assurance that a deal will take place between the parties
Australia-based IGO has confirmed media reports that the company is in talks to acquire nickel miner Western Areas.
The miner said that it is in preliminary discussions at this stage regarding a change of control proposal and the basis on which engagement and due diligence can move ahead.
IGO 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.
“IGO will continue to keep shareholders updated as appropriate.”
Listed on the Australian Securities Exchange (ASX), Western Areas is an active explorer of nickel assets at Forrestania and Cosmos in Western Australia. Besides, the company has a greenfield exploration asset in the form of Western Gawler in South Australia.
Western Areas is said to be among the largest sulphide nickel miners in Australia. It had a production of nearly 22,000 to 25,000 tonnes of nickel ore per year coming from its Flying Fox and Spotted Quoll mines. Both the mines are 100% owned and are located in Forrestania.
The Cosmos nickel operation, on the other hand, will see the development of the Odysseus Project, which will be the company’s third nickel mine.
Earlier this year, the company closed an AUD85m ($60.9m) placement from existing and new investors.
The company will use the proceeds from the placement for completing the Odysseus development apart from advancing organic growth projects at Forrestania and Cosmos and continue exploration.
IGO, on the other hand, owns and operates the Nova nickel-copper-cobalt operation in Western Australia. The company had also invested in a lithium focused joint venture with its partner Tianqi Lithium.
The joint venture has a stake of 51% in the Greenbushes lithium mine in Western Australia and a 100% stake in a downstream processing refinery at Kwinana, which produces battery grade lithium hydroxide.