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Aug 19 (Reuters) - Australian miner IGO Ltd said on Thursday it was in preliminary talks to acquire nickel miner Western Areas Ltd, as it raises its footprint in battery materials after buying a lithium stake earlier this year.
Shares of IGO dropped as much as 6.4% in early trade.
IGO closed a $1.4 billion purchase of a stake in Tianqi Lithium’s Australian assets in June.
The miner in April exited its gold business, bolstering its balance sheet, by agreeing to sell its 30% stake in the Tropicana gold mine to Regis Resources Ltd.
Shares of Western Areas, which has nickel production assets in Australia and base metals development projects across Australia, Canada and Finland, surged over 17% to A$2.91 in early trade, bringing the company’s market capitalisation value to nearly A$800.4 million ($578.45 million).
The companies confirmed in brief, separate statements that they were in early-stage discussions over a deal and how to arrange due diligence, but said there was no certainty that a deal would go through.
The Australian Financial Review had reported on Wednesday that IGO was a likely candidate to bid for Western Areas. (bit.ly/3xTOOZT)
$1 = 1.3837 Australian dollars Reporting by Harish Sridharan in Bengaluru; Editing by Rashmi Aich