16 / 164
16 Independence Group NL
ACQUISITION OF SIRIUS RESOURCES NL (SIRIUS)
The objective and strategy of IGO is to create long-term shareholder value through the discovery, development and acquisition
of low cost and high grade projects.
Criteria For Targeting Opportunities
Following a review of strategy during FY2015, IGO set criteria for acquiring a production, near-production or development asset.
The primary criteria are indicated in the table below.
Sirius Resources NL
Transaction
On 25 May 2015, IGO and Sirius announced the execution of a binding Scheme Implementation Deed under which IGO would
acquire all the issued capital of Sirius by way of an Acquisition Scheme of Arrangement (the Acquisition Scheme). Under the
Acquisition Scheme, Sirius shareholders received 0.66 IGO shares and 52 cents cash for each Sirius share. Sirius shareholders also
participated pro-rata in the demerger of Sirius’ Polar Bear and Scandinavian exploration assets.
The transaction created a leading diversified Australian mining company with a strong portfolio of high margin, long-life mining
assets, across a range of base and precious metals. The combination of the two companies has a clear strategic rationale that
is consistent with IGO’s clearly defined growth strategy and will generate significant value for shareholders. The acquisition has
brought the world-class Nova Project into the IGO portfolio.
The transaction was approved on 3 September 2015 and IGO completed the issue and payment of the Acquisition Scheme
consideration on 22 September 2015.
Financing
IGO has entered into a syndicated facility agreement (Debt Agreement) with National Australia Bank Limited, Australia and New
Zealand Banking Group Limited and Commonwealth Bank of Australia Limited for a $550 million committed term finance facility
on an unsecured basis. The Debt Agreement comprises:
•
A five-year $350 million amortising term loan facility that will be used to refinance the existing Nova project finance facility,
and provide funds for the continued development, construction and operation of the Nova Project.
•
A five-year $200 million revolving loan facility that will be used to partially fund the payment of the cash component of the
Acquisition Scheme and transaction costs, in addition to providing funding for general corporate purposes.
Overview of the Merged Group
The Transaction has created a leading diversified Australian mining company with a strong portfolio of long-life mining assets,
across a range of base and precious metals, including:
•
A 30% interest in the Tropicana Gold Mine
•
The 100% owned Nova Project, currently in development
•
The 100% owned Long nickel operation
•
The 100% owned Jaguar zinc-copper-silver operation
•
The 100% owned Stockman copper-zinc-silver development project
Five Primary Targeting Criteria
High Margin
•
Bottom third cost curve
Scale
•
Equivalent, or bigger, in scale to IGO’s 30% interest in Tropicana
•
Circa 150,000oz/year Au, 15,000tpa Ni, or 30,000tpa Cu
Long Mine Life
•
Reserve life of minimum seven years for group
•
Significant opportunity for exploration potential
Low Risk Jurisdictions
•
Low risk jurisdiction
•
Proximity of assets providing business simplicity
Commodity Agnostic
•
Base metals and precious metals
•
Focus on money mines = long-life and high margin