WA based miner and explorer IGO has confirmed media reports that takeover talks with nickel miner Western Areas are moving closer towards a decision.
“While IGO does not comment on media speculation, the Company advises that discussions remain at an early stage with due diligence having commenced in recent days,” the company told the ASX on Tuesday.
“IGO will progress due diligence over coming weeks, however there is no certainty that a definitive transaction will result once this period of diligence is complete.”
Any bid would be share based and valued around $1 billion, according to media reports on Tuesday. Western Areas had a market cap of just over $960 million on Monday.
Just 24 hours after IGO first confirmed talks last month, billionaire Andrew ‘Twiggy’ Forrest showed up as a substantial investor at Western Areas with a stake of 5.3%.
Western Areas has nickel production assets in Australia and base metals development projects across Australia, Canada and Finland.
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Meanwhile, 10 days after raising more than $60 million to finance the expansion of key infrastructure at its growing Kalgoorlie nickel hub, Mincor Resources (another stock where IGO and Wyloo are playing) has uncovered two high-grade high grade sulphide nickel intersections at the Hartley prospect in Western Australia.
The intersections were made in drilling 17 kilometres north-west of the Cassini nickel mine near Kambalda which is the long-time centre of WA nickel exploration and mining.
Mincor said in an ASX filing that the two holes returned assays of 1.4 metres at 3% nickel and 4.5 metres at 3.3% nickel which the company says has seen it unlocked new exploration targets at Hartley.
The continuous high-grade nickel has intersected a 200-metre strike length and was drilled within a three-kilometre untested zone.
“These latest intercepts provide strong evidence that we have an exciting emerging exploration opportunity at the Hartley prospect, just 17 kilometres from our new Cassini mine,” Mincor said in the statement to the ASX
“We have now intersected high-grade nickel sulphides with width over a 200-metre strike length, and while we are still at a relatively early stage in terms of our understanding of the primary architecture and geometry, the high-quality results bode extremely well for the future prospectivity of this area,” Mincor CEO, Managing Director, David Southam, said in the statement to the ASX
The Hartley prospect was renamed from Location 1 after the massive sulphide discovery.
“We are also very pleased to recognise our general manager of exploration, Rob Hartley, by upgrading the naming convention for this emerging area” the company told the ASX
Mincor is now testing a further 100 metres to the south with the next hole, MDD374.
On September 7 it raised $60 million in a placement to build infrastructure for the Cassini mine and other operations in the area. $25 million will be used to replace a bank credit facility and $15 million will be used on new exploration.
Andrew Forrest’s Wyloo metals owns 15% of Mincor with rival nickel and lithium miner, IGO sitting on 8%.
If IGO grabs Western Areas, Mincor would be open to Forrest’s Wyloo but will the collapse in iron prices nip any such move in the bud.
Mincor’s major customer is BHP which has agreements to take nickel concentrate from the company’s mines in the Kambalda area as well as Cassini in the new year.
He said Mincor was returning to the discovery phase again “similar to Bellevue” and was looking to explore more of what was dubbed “the Golden Mile of nickel”.
The company confirmed a third high-grade massive sulphide nickel intersection in the 1.1-kilometre zone between its Long and Durkin North mines near Kambalda, but stopped short of labelling it a discovery.
Mincor shares ended the day steady at $1.27 and IGO shares closed at $9.01, up 0.1%. Western Areas shares lost 1% to $2.92.
