Macquarie believes the business has been transformed by the sale of 30% interest in Tropicana and the acquisition of an interest in the lithium joint venture.
The sale of the stake in Tropicana will result in the company emerging from both transactions with a modest net cash position.
The 24.99% stake in the Greenbushes spodumene mine and 49% of the Kwinana lithium hydroxide plant will be the key growth engines for the company. Greenbushes is the largest and lowest-cost spodumene mine globally with a life of over 20 years.
Macquarie resumes coverage with an Outperform rating and $8 target.
Sector: Materials.
Target price is $8.00.Current Price is $7.24. Difference: $0.76 – (brackets indicate current price is over target). If IGO meets the Macquarie target it will return approximately 10% (excluding dividends, fees and charges – negative figures indicate an expected loss).
