@Bayer3
Its very simple, IGO already invests in PAN holding 15% or so now plus made a bid before at 47c ps which it withdrew & it needs PANs MILL and offtake deal and export port capacity/infrastructure IGO had $775M cash in bank as at 30 June increased by $330M in 3 months.
"IGO Limited https://www.igo.com.au › site › pdf › June-2023
31 July 2023 — Cash on hand at the end of the Quarter totalled $775.2M (3Q23: $441.1M), with the Company now having net cash of $415.2M (3Q23: $8.9M net debt)"
IGO invested at a VWAP of 14c (forget 3.5c) being multiples higher than here and it has tenements surrounding PANs MILL.
PAN has a functioning large 1.5MTpa built MILL plus offtake with Trafigura
IGO now has offtake with Trafigura also at Nova 50% and also did have at FF through WSA 50% with a long history with them.
IGO can take a block stake for say $50M increase its holding to 45% and pay out Trafigura and keep the production going effectively taking control =
WIN for PAN
WIN for IGO
WIN for Trafigura
shareholders stay onboard and benefit from the eventual upside and IGO full bid.
IGO can then get tolling from the mill for its mines all around it & even upgrade the MILL for more capacity
As IGO burned $1,100M cash on its WSA bid and likely another $100M since on this fiasco now mothballed all 2 mines inc its 2 mills, IGO needs MILLS and operating mines plus offtake deals to make money. It has that with PAN.
PAN dont need passive Zeta nor serial warehouser AF, but with IGO it makes sense for both.
Trafigura has sway over IGO as it pays 50% of its current Ni offtake revenue to IGO so would want more and to keep PAN & IGO producing rendering offtake to them as now.
Trafigura has no interest in shutting down PAN or IGO offtakes.
Thats why. WIN WIN WIN
PAN Price at posting:
3.5¢ Sentiment: Buy Disclosure: Not Held
(20min delay)