Australian mining and exploration company Independence Group has signed an agreement to acquire all the issued capital of Sirius Resources for A$1.8bn.

The new diversified Australian mining company will have a portfolio of high-margin / long-life mining assets and a pro-forma market capitalisation of $2.7bn.

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Sirius will also undertake a demerger of its Polar Bear and Scandinavian exploration assets, which includes the recently discovered Baloo gold deposit by the way of a demerger scheme of arrangement.

The arrangement will allow Sirius shareholders to retain full exposure to the value and upside of the assets in a new listed vehicle called S2 Resources.

"Upon completion of the deal, shareholders will have exposure to IGO‘s portfolio, including the 30%-owned Tropicana gold mine and the wholly owned Long nickel mining site."

The new company will own 100% of the Polar Bear gold assets located in the Norseman region of Western Australia, and will also hold a portfolio of Scandinavian gold as well as base metal exploration assets.

IGO managing director Peter Bradford said: "The acquisition of Sirius continues our stated strategy of building a diversified mining company with a balanced portfolio of exploration, development and producing assets, focusing on high-margin and long-life.

"The proximity of the Sirius and IGO assets in Western Australia creates opportunities to realise synergies and cost-efficiencies across a dominant land-holding position."

Upon completion of the deal, shareholders will have exposure to IGO’s portfolio, including the 30%-owned Tropicana gold mine and the wholly owned Long nickel mining site.

Shareholders will also have exposure to the 100%-owned Jaguar copper/zinc mine, in addition to the 100%-owned Stockman copper / zinc development project and benefit from the growth potential of Sirius’ Nova-Bollinger nickel/copper development project.

The fully financed project is currently under construction.

Sirius managing director Dr Mark Bennett said: "The combination of the Sirius development and IGO operational teams, together with their joint exploration experience, will be unrivalled.

"I am also excited about the opportunities available to Sirius shareholders through the creation of S2, the demerged entity which will include the Baloo discovery and the recently acquired exploration assets in Scandinavia."