IGO considers nickel divestment to Medallion Metals
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The news: IGO has entered into an agreement with ASX minnow Medallion Metals over the potential sale of assets within its Forrestania Nickel Operation in Western Australia, including the Cosmic Boy processing plant and associated infrastructure.
The numbers: The agreement includes an exclusivity period of nine months, with the ability to extend for up to a further three months, during which IGO and Medallion intend on conducting due diligence and negotiate binding transaction documentation.
The proposed deal comprises upfront cash of up to $15 million, with a total consideration to be capped at $50 million.
IGO shares were down 2.59% to $5.08 in early trading on the ASX and over the last 12 months has plummeted 61.7%.
The context: IGO said that it will transition Forrestania into care and maintenance in FY25. After 18 years of commercial nickel production, Forrestania's nickel reserves are "approaching depletion", and the opportunity to divest the site's assets would be a "positive outcome for both IGO and Medallion", it said.
IGO noted that it will retain lithium and nickel rights at Forrestania, with exploration work progressing at its South Ironcap prospect, where spodumene bearing pegmatites have been discovered.
Meanwhile, IGO and Medallion intend to negotiate the grant of gold and silver rights to Medallion on a non-exclusive basis to across the Forrestania tenement package.
What they said: Medallion managing director Paul Bennett said: "We welcome the opportunity to partner with IGO to seek to create a new gold business at Forrestania while allowing IGO to continue to pursue its corporate objectives in the region".
The sources: ASX announcement, ASX announcement
