📰 AFR: Fund managers tipping GAL as IGO’s next takeover target

The following article from the AFR claims that our long term exploration Investment Galileo Mining (ASX: GAL) “has landed on resources investors’ radars, with fundies tipping it as acquisitive IGO’s next potential target”.

Read the full article here.

Below are our key takeaways:

• IGO has been seeking to restock its deposit book as production from its Nova mine dips and it has just bought Western Areas (for $1.26 billion) to help.
• Fund managers reckon if IGO were to hunt for something to buy in the Fraser Range close to its Nova mine, Galileo would be the best fit.
• IGO already owns (~8.89%) of GAL and have previously purchased projects from Mark Creasy backed companies. Including the Nova mine and the Silver knight discovery. Creasy owns 24.82% of GAL and could be a factor in any takeover considerations by IGO.

This type of speculation always seems to come about after a junior explorer makes a new discovery.

With GAL having recently made its PGE discovery we suspect some of the bigger fund managers who previously couldn't invest in GAL because of its size and risk profile (as a junior explorer) are now starting to do their homework.

IGO is currently trading with a market cap of $9 billion and had $442M in cash at the end of the March quarter so we think the finances of a deal like this wouldn't be an issue.

Next: We are eagerly waiting to see what comes from the ~4,000m of RC drilling GAL is doing to test for extensions to its new PGE discovery.