The IGO Ltd (ASX: IGO) share price is trading slightly higher today following the release of an announcement.
At the time of writing, the nickel and lithium-focused mining company's shares are up to $7.63.
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What did IGO announce?
This afternoon IGO announced the successful completion of the divestment of its 30% interest in the Tropicana Gold Mine to Regis Resources Limited (ASX: RRL).
According to the release, the net proceeds from the divestment totalled $889 million, which comprises $903 million of sale consideration less $14 million of completion adjustments.
In addition, the Tropicana related hedge book has an approximate out of the money mark to market position of $20 million. IGO revealed that it intends to settle these positions progressively during June 2021.
What now?
Management notes that the completion of the divestment has maximised the value of Tropicana for IGO's shareholders and will allow the company to pursue its strategic focus on commodities critical to enabling clean energy.
It will also allow IGO to complete the transaction with Tianqi Lithium without the need to draw on debt facilities, while retaining a strong balance sheet with pro forma net cash of $300 million.
The Tianqi Lithium transaction will see the company acquire a 49% non-controlling interest in a new joint venture with Tianqi Lithium. This will provide it with a 24.99% indirect interest in the world-class Greenbushes Lithium Mining and Processing Operation and a 49% indirect interest in the Kwinana Lithium Hydroxide Plant. Both are located in Western Australia.
IGO's Managing Director and CEO, Peter Bradford, commented: "We are delighted to have successfully divested, and now settled, the transaction with Regis to divest our stake in the Tropicana Gold Mine. Tropicana has been a wonderful asset for IGO however, our strategic focus on clean energy metals and pending lithium transaction with Tianqi meant a divestment at this juncture was the best outcome for our shareholders."
The Northern Star share price is up 3% to $11.78 today.
