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DIGGERS & DEALERS PREVIEW

IGO considers Tropicana clean-up

by Dominic Piper

GO Ltd has launched a strategic review into its share of the lingering for some time.
ITropicana gold mine in Western Australia as it considers its “That rumour has been doing the rounds for three or four years
options for its 30% stake in the mine. and is the most common question I get on calls,” Bradford
IGO managing director Peter Bradford announced the review said. “My consistent response is: ‘Tropicana as a gold asset is
on September 11, saying the company did not believe the not aligned with our strategy but it’s a high-quality asset so it is
project’s value was being fairly recognised in the IGO share core to our portfolio.’”
price. While there would be plenty of suitors for the 30% interest,
The strategic review will involve technical analysis of various Bradford is reluctant to sell the stake unless the buyer values
opportunities at the mine and explore divestment options it appropriately and there is something useful to apply the
such as full or partial sale “or other alternative transaction proceeds to.
structures”. “We shouldn’t take it for granted that it will always be in the
The launch of the review came six days before commercial portfolio but any sale would rely on a few factors; that the
production was declared by IGO and JV partner AngloGold market conditions are such that the value is understood and, if
Ashanti Ltd on the Boston Shaker underground mine at we do sell, why would we be doing it?” Bradford asked. “If it is
Tropicana. to return the proceeds to shareholders, is it not better to retain
The mine – completed on time and below budget – is producing the asset and produce a higher annual dividend?”
at a rate of 700,000 tpa and will ramp up to 1.1 mtpa by March He is also wary of selling the asset before its longer-term value
2021. At expected grades of 3.5 g/t gold, it should produce has been accurately assessed, hence the strategic review.
100,000 ozpa in full production. “Boston Shaker is coming into commercial production and
IGO was largely responsible for the discovery of Tropicana in there are two further underground prospects to fully test there
2005. A recent renewed focus on clean energy metals such as which means we are still only part way through the journey
nickel and copper fuelled speculation IGO was considering its at Tropicana,” he said. “And, there is the regional exploration
options for Tropicana. around Tropicana, where we are spending $10-11 million this
Speaking to GMJ prior to announcing the strategic review, year, three times what was spent last year.”
Bradford said the question around divestment had been

Commercial production at the Boston Shaker underground
was declared in September

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