12/04/2021 - 12:00

Tropicana auction heats up

12/04/2021 - 12:00

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The sale of IGO’s 30 per cent stake in the Tropicana gold mine appears close to being completed, with Regis Resources tipped as the successful bidder after Gold Road Resources said its offer had not been accepted.

Tropicana auction heats up
AngloGold Ashanti is the majority owner and operator of Tropicana.

The sale of IGO’s 30 per cent stake in the Tropicana gold mine appears close to being completed, with Regis Resources tipped as the successful bidder after Gold Road Resources said its offer had not been accepted.  

The Australian Financial Review reported this afternoon that Regis is planning to launch a $650 million equity raising to help fund a $900 million purchase.

The Perth-based gold miner has not updated the market at the time of publication.

Earlier today, Gold Road updated the market after a media report said it was the frontrunner for Tropicana with a bid believed to be worth $1 billion.

“Gold Road submitted a final offer for the Tropicana Interest at the end of March 2021 but not on the terms speculated,” the company said.

“The final offer has since expired, and as at this time, no agreement has been subsequently reached.”

Gold Road kept its options open, saying it would continue to assess potential opportunities that align with its strategy and offer value to shareholders.

IGO, which is being advised by Macquarie Capital, has been looking to offload its stake in Tropicana for several months.

The gold asset does not fit with its strategic focus on nickel, lithium and other critical minerals.

The sale would also allow IGO to repay much of the $1.1 billion of debt it agreed to take on last December as part of its Tianqi Lithium acquisition.

However, the expected proceeds are likely to have declined in line with the weakening gold price over the past six months.   

Global mining giant AngloGold Ashanti is the majority owner and operator of Tropicana and retains the right to match any bid for IGO’s minority stake.

AngoldGold is targeting annual production in excess of 450,000 ounces from 2022 from Tropicana’s open pit and underground operations.

Gold Road’s core asset is a 50 per cent stake in the Gruyere gold mine, which was developed in joint venture with Gold Fields and produced its first gold in June 2019.

Gruyere is forecast to produce on average 300,000 ounces annually for at least 12 years.

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