Australia's IGO looking to divest some Forrestania nickel assets (updated)

Medallion Metals

08/08/2024 24:45

(Adds details on the proposed deal from paragraph 3 onwards)
       Aug 8 (Reuters) - Nickel and lithium producer IGO Ltd
 IGO.AX  is negotiating a potential deal with Medallion Metals
 MM8.AX  to divest certain assets of its Forrestania nickel
operation in Western Australia, the companies said in separate
statements on Thursday.
    The total consideration of the deal is up to A$50 million 
($32.58 million), Medallion said.
    Australia-based IGO will transition Forrestania into care
and maintenance in fiscal 2025 after 18 years of commercial
nickel production from its mines, as reserves are now depleting.
    The deal comes at a time when IGO has been undertaking a
strategic review in an attempt to reevaluate its resources, as
nickel prices have slumped due to an oversupply in the global
market.
    Last month, it said it will slim down its executive team
amid nickel writedowns, and was looking to maximize cash from
its nickel businesses that are transitioning to care and
maintenance.
    The assets include IGO's Cosmic Boy Process Plant and
associated infrastructure, which Medallion would use to
accelerate commercial production at its flagship Ravensthorpe
Gold project.
    The parties entered into an exclusivity agreement, granting
them 90 days to conduct due diligence and negotiate a binding
transaction.
    
($1 = 1.5349 Australian dollars)

 (Reporting by Ayushman Ojha; Editing by Mohammed Safi Shamsi
and Rashmi Aich)
 ((Ayushman.Ojha@thomsonreuters.com;))