Why the IGO (ASX:IGO) share price is moving higher today

ASX investors are expecting more mergers and acquisitions in the months ahead.

| More on:
man pointing up at a rising red line which represents a growing share price

Image source: Getty Images

The IGO Ltd (ASX: IGO) share price is moving higher in morning trade, up 1.57%.

Below, we take a look at the ASX resource share’s acquisition announcement.

What did IGO announce?

The IGO share price is gaining after the company reported it has entered into a binding agreement to acquire 100% of the Silver Knight nickel-copper-cobalt sulphide deposit from the Creasy Group.

IGO also said it is forming a joint venture (JV) with the Creasy Group across a portfolio of exploration tenements surrounding Silver Knight, in which it will have a 65% stake and Creasy Group will own 35%. Silver Knight is located in Western Australia.

The total cash consideration for both transactions was reported to be $45 million. Completion of the transaction is expected by the first week of October.

Commenting on the acquisitions IGO’s CEO, Peter Bradford said:

We are pleased to have concluded this agreement with Creasy Group to acquire Silver Knight and the additional joint venture tenure. The Silver Knight discovery not only validated the potential for the Fraser Range to host multiple commercial nickel-copper sulphide deposits but also provides a secondary source of feed for the Nova processing plant.

Bradford added that the company aims to “fast track the detailed assessment and permitting of Silver Knight” with an eye to start pre-mining activity by 2023.

IGO plans an infill drilling program at Silver Knight after the transaction is finalised. It will also work on receiving a Native Title mining agreement and the needed regulatory approvals. The company said it will communicate its updated resource and reserve estimates to the market once work is completed.

IGO share price snapshot

Over the past 12 months, IGO’s share price has gained 64%. By comparison the S&P/ASX 200 Index (ASX: XJO) is up 23% over that same time.

Year-to-date the IGO share price has continued to outperform, up 35%.

Should you invest $1,000 in IGO right now?

Before you consider IGO, you'll want to hear this.

Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now... and IGO wasn't one of them.

The online investing service he’s run for nearly a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.* And right now, Scott thinks there are 5 stocks that are better buys.

*Returns as of August 16th 2021

The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Resources Shares