South32 (ASX: S32) is taking battery metals producer IGO (ASX: IGO) to court over royalty payments worth A$122.1 million ($107 million) it claims to be owed, which are related to the Tropicana gold mine in Western Australia.
South32 is requesting a 1.5% soil sample royalty payment on the gross revenue that IGO earned from December 2014 until September 2023, when it had a stake in the mine.
A 2002 deal between the companies gave South32 the right to receive royalty payments if IGO found any minerals from the soil samples it collected under the exploration licences. This is the basis of South32’s claim, IGO said in the statement.
The embattled nickel and lithium miner rejected South32’s allegations, saying it considers them to be without merit.
Tropicana, about 300 km north-east of Kalgoorlie, began operations in 2013 and is now owned by AngloGold Ashanti (NYSE: AU) in partnership with Regis Resources (ASX: RRL).
The open-pit mine, with a growing underground mining component, produced 437,000 oz. (100%) in 2022.
Regis, which bought its stake in Tropicana from IGO in 2021, went into a trading halt on Thursday before issuing a statement saying it was not a party to the legal action pursued by South32, but “would take appropriate action to defend its position.”
News of the lawsuit came on the heels of IGO announcing it had placed its Cosmos nickel project in Western Australia into care and maintenance due to low prices. The company also lowered its annual lithium production forecast.
Be the first to comment on "South32 hits IGO with $107M royalty lawsuit"