IGO is selling its 30% stake in the Tropicana gold mine to Regis Resources so it can focus on commodities that align with its clean energy strategy.

The $903 million deal will allow IGO to focus on battery metals, while Regis will inherit a Tier 1 gold asset and a ”world class” joint venture partner in AngloGold Ashanti.

Located 330km northeast of Kalgoorlie in Western Australia, Tropicana is Australia’s fifth largest gold mine, producing 463,000 ounces of gold in the 2019-2020 financial year.

IGO (ASX: IGO) managing director and chief executive Peter Bradford said Tropicana had been an important part of IGO’s history and a key driver of its sustained growth since its discovery in 2005.

“While IGO continues to believe that Tropicana is a high-quality tier-1 gold asset with strong upside potential, it is no longer aligned with our focus on commodities critical to clean energy,” Mr Bradord said.

“This transaction, along with the recent investment in Tianqi Lithium assets in Australia, solidifies IGO’s position of becoming a globally relevant pure-play battery minerals producer and developer, uniquely exposed to tier1 nickel, copper, cobalt and lithium.”

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The 30% non operating interest provides Regis Resources (ASX: RRL) with immediate exposure to high margin cash flows from an asset operated by a “world-class” joint venture partner, according to Regis’ ASX announcement.

It also stated the deal diversifies Regis’ existing production base with a high quality, low cost, high margin gold asset, which has a mine life of more than ten years.

Regis’ Managing Director and CEO Jim Beyer said the acquisition would create substantial value and provide the company with multiple opportunities to deliver growth for shareholders.

”This is a genuinely transformational transaction for Regis and one that delivers on our strategic objectives to grow as a safe, responsible, reliable, long life, low cost gold producer, generating strong financial returns.”

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