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OPERATIONAL REVIEW
DIGGeRs & DeALeRs PReVIeW MACA.NET.AU

Two nickels come together

IGO’s commitment to clean energy is
GO Ltd has continued reshaping its portfolio and the conviction the combined company exemplified by its investment in the
Iwith the completion of its merger with West- can extract more value from the combined Greenbushes lithium mine
ern Areas Ltd last month bringing an even assets than each of us could’ve done our-
keel between nickel and lithium production. selves.” sive Fraser Range tenement holding as it
The acquisition – completed via a $1.26 bil- Both lithium and nickel fit perfectly into was Nova itself and the company has looked
lion scheme of arrangement – will hand IGO IGO’s stated preference for clean energy to replicate that elsewhere. The company
control of the operating Forrestania nickel metals however there are several other com- has taken significant positions in the Fraser
mine in the south-west of Western Australia modities in the basket which it is yet to involve Range, Paterson and Kimberley provinces of
and the Cosmos nickel complex, near Le- itself in, chief among them copper. In Febru- WA, as well as elsewhere around the coun-
onora, where the Odysseus orebody is being ary, the company walked away from discus- try.
reopened for development. sions with Glencore plc over the CSA copper The challenge of such a strategy is trying
The deal adds production tonnes but, mine in New South Wales. to move the discovery dial forward in under-
more importantly, mine life to IGO’s nickel “Copper is of interest to us, and we are explored terrains. Despite spending more
portfolio which was beginning to look skinny looking at copper opportunities but it is a than $60 million in each of the last five years,
in comparison to its lithium division. hotly contested space and we are yet to find IGO is yet to make a breakthrough discovery.
“The completion of the transaction adds to an opportunity that is complementary to the “Our exploration portfolio is very green –
the story and really acts as a counter-balance portfolio and delivers value for shareholders,” by that I mean immature – as we are looking
to the dominance of lithium in the portfolio,” Bradford said. in places that haven’t been looked at before,”
IGO managing director Peter Bradford told “I characterise ourselves as serial lookers. Bradford said. “Being pragmatic, there are
Paydirt. The reason why is because that way you are many years work you need to build up the
The Western Areas transaction is typical of putting yourself in the pathway of opportunity. level of understanding before you can rea-
IGO’s recent history which has seen it divest If you’re not looking, those opportunities go sonably expect to drive up the probability of
foundational assets such as the Long nickel by. But you have to be disciplined on how and discovery in a greenfields environment. We
mine and Tropicana gold mine, acquire the when to transact. We have demonstrated we all hope to make a discovery accidently along
Nova nickel mine while still in development are quite disciplined both on acquisitions and the way but pragmatically we all know there
and take a minority interest in the Green- divestments.” is a lot of work we have to do to build up the
bushes lithium mine and associated Kwinana While the hunt for suitable operating as- layers of information.
lithium hydroxide project. sets continues, IGO is content with defining “By the passage of time, we are better po-
Bradford wouldn’t be drawn on whether more organic copper opportunities. sitioned to make a discovery today than we
further deals were likely, saying the company “Half of our exploration portfolio is copper, were last year, the year before that or the year
had enough on its plate with integration of and if we can’t find it through M&A, we are before that. Along the journey we have ma-
Western Areas. quite happy to ultimately deliver it through ex- tured our exploration portfolio, and that is a
“We think about the opportunity which has ploration,” Bradford said. result of continued effort from a best-in-class
been unlocked by doing with this transaction, IGO has been bullish on exploration since exploration team.
we are not thinking about positioning for the acquiring Nova in 2015. At the time, Bradford “With the belt-scale nature, if we do have
next one,” he said. “This deal was driven by was insistent the purchase was as much success we are likely to have multiple suc-
maintaining our relevance in the nickel space about the district-wide potential of the mas- cesses. And because of the volume of work

Page 42 JULY 2022 aUSTRaLIa’S PaYDIRT