Jim Beyer, Regis’ Managing Director and CEO said the acquisition of a 30% interest in Tropicana would create substantial value and provide Regis with multiple additional opportunities to deliver growth for Regis shareholders over the short, medium and long term.
“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. Diversifying the Company’s robust portfolio through the acquisition of a 30% interest in the Tropicana operation will deliver significant improvements in the Company’s Resources, Reserves and annual production, along with providing additional immediate cashflows, all of which adds to the strength of our platform for undertaking further organic and inorganic growth activities.
Regis is looking forward to working with AngloGold Ashanti, a proven global gold mine operator, to continue delivering a world-class operation at Tropicana for many years into the future.”
Regis intends to fund the acquisition through a combination of a fully underwritten4 equity raising of up to A$650 million via an institutional placement and an accelerated pro-rata non-renounceable entitlement offer (Equity Raising or the Offer) and a new A$300 million loan facility.
Important information regarding the Acquisition, the Equity Raising and the acquisition funding, including the offer restrictions applicable to the Equity Raising, are outlined in the investor presentation released on the ASX platform today (Investor Presentation).
IGO’s Managing Director and CEO, Peter Bradford, commented:
“Since discovery in 2005, Tropicana has been an important part of IGO’s history and a key driver of our sustained growth. 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.
We are therefore delighted to have entered into an agreement to sell Tropicana to Regis.
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 tier- 1 nickel, copper, cobalt and lithium.
We are extremely pleased with the outcome of the transaction and the assistance of the AngloGold Ashanti teams throughout the sales process. I take this opportunity to acknowledge and thank AngloGold Ashanti for their partnership and support over the last 18 years.
I would also like to acknowledge the IGO Team. To successfully execute the strategic review and associated divestment of Tropicana, while also progressing the investment in the lithium assets of Tianqi in Australia, demonstrates the collective commitment and strength of the IGO Team.”
Completion of the transaction with Regis is subject to the waiver or non exercise of a right of last refusal (“ROLR”) of up to 60-days held by AngloGold Ashanti Australia Limited (“AngloGold Ashanti”). If AngloGold Ashanti exercises its ROLR, the transaction with Regis will not proceed and IGO will instead dispose of its 30% interest in Tropicana to AngloGold Ashanti at the same price and on the same terms which have been agreed with Regis.
Other than the waiver or non-exercise of the ROLR, all other completion conditions are considered administrative. In the event the ROLR is not exercised and lapses after 60-days, the transaction is expected to close by June 2021.
Proceeds from the sale of Tropicana will be applied to funding IGO’s investment in the Australian lithium assets of Tianqi Lithium Corporation (“Transaction”) as announced on 9 December 2020, enabling IGO to retain a strong balance sheet post the completion of the Transaction. As announced in December, the Transaction was to be partly funded by debt facilities totalling up to A$1,100M to be drawn upon financial close of the Transaction. The timing of the financial close of this Tropicana sale process relative to the Transaction will determine the amount that these debt facilities will need to be drawn down, or repaid. Assuming successful completion of the Tianqi investment and the sale of Tropicana, IGO expects to be proforma net cash of approximately A$200M2.