PERTH (miningweekly.com) – ASX-listed IGO will partner with Andrew Forrest’s Wyloo Metals to evaluate opportunities for downstream nickel processing in Australia, as Wyloo commits to support IGO’s bid for fellow-listed Western Areas.
The agreement will see IGO and Wyloo Metals conduct a study, funded 70:30 by IGO and Wyloo respectively, to evaluate the technical, commercial and economic feasibility of developing a downstream nickel processing facility based in Australia.
Following the conclusion of the study, and subject to the parties making a final investment decision, the parties will then form a 70:30 joint venture (JV) to construct and operate a downstream nickel processing facility.
Meanwhile, Wyloo on Thursday also said that it would vote its 31.5-million shares in takeover target Western Areas in favour of IGO’s takeover of the company.
Western Areas in December entered into a scheme implementation deed with IGO, under which IGO will acquire 100% of the share capital of Western Areas by way of a scheme of arrangement, subject to shareholder approval and in the absence of a superior proposal.
Under the terms of the scheme, Western Areas shareholders will receive A$3.36 per Western Areas share in cash, which represents a 35.5% premium to the company’s undisturbed share price of A$2.48 per Western Areas share on August 18, 2021.
Wyloo’s acceptance for its 9.8% interest in Western Areas is subject to there being no superior proposal, and an independent expert concluding that the scheme is in the best interest of Western Areas shareholders.
Wyloo has also committed not to acquire or dispose of any Western Areas shares other than under its agreement with IGO.
“Wyloo Metals is looking forward to working closely with our strategic partner IGO to develop an independent, downstream nickel processing facility that could potentially accept feed from any nickel mine in Western Australia,” said CEO Luca Giacovazzi.
“By developing additional downstream processing capacity domestically, this partnership will make Western Australia an increasingly relevant jurisdiction in the global battery supply chain.
“This partnership is aligned with Wyloo Metals’ global strategy of investing in the production of materials required to support the rapid decarbonisation of the global economy.”
IGO MD and CEO Peter Bradford said on Thursday that the transaction to acquire Western Areas is "on strategy" and a "sensible consolidation of Western Australian nickel production assets".
“The transaction delivers price certainty to Western Areas shareholders and is accretive to IGO shareholders. We are therefore pleased to have secured Wyloo Consolidated’s support for the scheme of arrangement.
“Looking forward, our agreement with Wyloo Metals to investigate and, if economically feasible, advance development of a downstream nickel processing facility represents a great opportunity to progress Australia’s relevance in the battery metals supply chain. IGO and Wyloo Metals have each had an aspiration to evaluate the potential for downstream nickel processing in Australia and our joint initiative is a step towards realising the ambitions of both companies.”