TROPICANA STRATEGIC REVIEW

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    IGO Limited (ASX:IGO) (“IGO” or “the Company”) advises that it has commenced a strategic review of its
    options in relation to its 30% interest in Tropicana. This decision follows unsolicited approaches from a number
    of parties and a desire to ensure the value of IGO’s interest in Tropicana for IGO’s shareholders is maximised.
    Tropicana is a high-quality Tier-1 gold asset with significant upside potential which IGO does not believe is
    fully recognised in the Company’s current share price.
    The strategic review will involve a detailed technical analysis of the various opportunities to enhance value
    through underground development and exploration, as well as the value which may be realised through full or
    partial sale or other alternative transaction structures.
    IGO has advised its Joint Venture partner AngloGold Ashanti Australia (AGAA) of its intentions, and AGAA is
    working collaboratively with IGO to facilitate the review. This work is expected to be conducted over the next
    three to six months and IGO will keep shareholders updated on any outcomes from the review in accordance
    with our ongoing disclosure obligations.
    IGO’s Managing Director and CEO, Peter Bradford, commented, “Tropicana is clearly a high-quality and
    significant asset within IGO’s portfolio, however IGO’s strategic focus is on commodities that are critical to
    clean energy.
    “In the current gold price environment, we do not believe that IGO’s share price fully reflects the value of
    Tropicana. As such, in parallel to an assessment of future underground opportunities at Tropicana, IGO has
    commenced a review of its investment in Tropicana and how best to realise the asset’s full value to the benefit
    of IGO’s shareholders.”
    This announcement is authorised for release to the ASX by Peter Bradford, CEO & Managing Director.

    courtesy of Bell Direct
    ===========================================================================

    DYOR

    i hold AGG ('free-carried ' )

    but have been thinking about IGO carefully

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    missed my price target again this morning

    maybe another day

    1 like
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    quality story

    1 like
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    IGO Ltd's Tropicana stake worth up to $1.6b: UBS
    Sarah Thompson, Anthony Macdonald and Tim Boyd
    Sep 15, 2020 – 10.07am

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    Under fire clean energy metals play IGO Ltd's on-the-block stake in the Tropicana Gold Mine could change hands for as much as $1.6 billion.

    IGO Ltd's 30 per cent stake in the Tropicana Gold Mine could be worth up to $1.6 billion. Phil Carrick

    That's according to analysts at UBS, who re-cut their numbers on the stake's value after this column revealed last week that IGO had tapped Macquarie Capital to take the stake to market. .

    The Swiss bank's number crunchers said forecast earnings for Tropicana implied a value of $1.2 billion to $1.6 billion for the 30 per cent stake. The remainder of the mine is owned by AngloGold Ashanti, which shapes as the most logical acquirer if a sale is pursued.

    On a discounted cash flow basis, using a gold price of $US1900 an ounce, UBS valued Tropicana at $1.2 billion.

    The analysts said the $1.2 billion figure implied IGO's Nova nickel operation was being "valued by the market at ~$A600-900m, below UBSe of A$1.2bn and implying an EV/EBITDA multiple of just 2-3x."

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    As a result, "a successful Tropicana sale could be a catalyst for a rerating," according to UBS's note to clients on Tuesday.

    IGO is trading at a 20 per cent discount to UBS's net present value estimates of $5.66 a share. Its shares closed at $4.63 on Monday.

    In addition to the potential sale or demerger of Tropicana, UBS said IGO could also close its share price discount through "sensible M&A to extend the life of the nickel business" and " capital returns or dividends to be announced in Feb 2021".

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