IGO (ASX:IGO) share price higher after completing $1.9bn transformational transaction

Clean energy is the way forward for this miner…
The post IGO (ASX:IGO) share price higher after completing $1.9bn transformational transaction appeared first on The Motley Fool Australia. –

The IGO Ltd (ASX: IGO) share price is pushing higher on Thursday morning following the release of an announcement.

At the time of writing, the clean energy focused mining company’s shares are up 3.5% to $7.91.

Why is the IGO share price pushing higher?

Investors have been buying the company’s shares after it announced the completion of its transformational transaction to form a new lithium joint venture with Tianqi Lithium.

This transformational transaction sees the company acquire a 49% non-controlling interest in Tianqi Lithium Energy Australia, providing it with a 24.99% indirect interest in world-class Greenbushes Lithium Mining and Processing Operation. It also gives IGO a 49% interest in the Kwinana Lithium Hydroxide Plant.

Both operations are located in Western Australia and come at a total cost of US$1.4 billion (A$1.9 billion). This is being funded by a capital raising which completed in January and the sale of its 30% interest in the Tropicana Gold Mine to Regis Resources Limited (ASX: RRL) for $903 million which completed in May.

The clean energy revolution

IGO’s Managing Director and CEO, Peter Bradford, commented: “Our new partnership with Tianqi promises to be truly transformational for IGO and delivers on our strategy focused on the clean energy revolution. We are incredibly excited to commence this journey with Tianqi as we build a globally relevant lithium business delivering high quality, responsibly produced lithium products to global customers while generating strong financial outcomes for shareholders.”

This sentiment was echoed by Tianqi’s Founder and Chairman, Mr Jiang Weiping.

He commented: “We are pleased to have now formed our new strategic partnership with IGO and, through the JV, look forward to growing a leading global lithium business and delivering on our shared vision for a clean energy future. Our new joint venture is ideally positioned in this market with quality upstream and downstream assets capable of generating strong financial returns for both IGO and Tianqi.”

What now?

The company notes that the commissioning process for the first lithium hydroxide plant at Kwinana has now commenced.

This includes the formation of the owner’s commissioning team and the appointment of a lead contracting firm to complete the remaining rectification work. First lithium hydroxide is expected to be produced in the second half of 2021.

In addition, the restart and ramp-up of Greenbushes Chemical Grade Plant 2 has commenced and the completion and commissioning of the Tailings Retreatment Project is expected in early 2022.

Is it time to invest?

According to a recent note out of Macquarie, its analysts believe the IGO share price is in the buy zone.

It analysts have put an an outperform rating and $8.70 price target on its shares. It is pleased with the company’s transformation into a clean energy-focused miner.

The post IGO (ASX:IGO) share price higher after completing $1.9bn transformational transaction appeared first on The Motley Fool Australia.

Wondering where you should invest $1,000 right now?

When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

Scott just revealed what he believes could be the five best ASX stocks for investors to buy right now. These stocks are trading at near dirt-cheap prices and Scott thinks they could be great buys right now.

*Returns as of May 24th 2021

More reading

5 things to watch on the ASX 200 on Thursday

Why Bank of Queensland, IGO, Milton, & Openpay are surging higher

ASX 200 up 1.3%: Soul Patts-Milton merger, IGO jumps

Iluka (ASX:ILU) share price jumps even as it pours water on M&A rumours
Here’s why the IGO (ASX:IGO) share price is racing 9% higher today

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. 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.

Trade The World Anywhere & Anytime!

Mobile app platform with over 50,000 global listed securities across 12 markets (over 70% global market capitalisation), right from your Android or iOS device.

Integrated with exclusive trading idea and investment analysis tools to help you find actionable insight on virtually every financial instrument across our 12 global markets, to help you optimise your trading strategies.

Refer Your Friends

Tell your friends about Monex and gift them FREE access to our trading tools.

We respect your privacy and will only send this one email notification to your friends. 

Share With Your Friends

Share on facebook
Share on twitter
Share on linkedin

Monex Trading Tools Access and Usage Terms

The Monex Trading Tools (referred to as ‘tools’ hereafter) are available to you inside your client portal;

To activate access to the tools, you must have a verified and approved trading account and have made a deposit of at least AUD $1000.

An active and funded account with a positive trading balance is required to continue to have access to the tools;

Although the tools are available to you indefinitely, Monex Securities may at it’s discretion disable access to the tools in the future;

Monex securities reserves the right to change these terms and conditions from time to time, as it sees fit, without notice.

Important Notice
iOS & Android App - 12 International Markets & Over 70% Global Market Cap. $0 Brokerage On US Trades. Click Here!