Independence Group NL (IGO) has signed an agreement to sell its Stockman Cu-Zn project in north-east Victoria, Australia, to CopperChem for A$47.2m ($35.6m). 

The transaction involves A$32.2m ($24.3m) in cash payments and a 1.5% net smelter return (NSR) royalty worth up to A$15m ($11.3m). 

According to IGO, the sale of the project is in line with its strategy of focusing on high-quality assets of scale, longevity and geographical focus. 

IGO managing director Peter Bradford said: "IGO remains committed to the creation of long-term shareholder value through the development and operation of a quality portfolio of assets with scale, longevity and geographical focus.

“With the significant continued growth of IGO, including the ramping up of the Nova operation to reach nameplate capacity in the September 2017 quarter, the development of the Stockman project is not consistent with this strategy.

"CopperChem is ideally positioned to continue its exploration and development, while we have retained upside exposure."

“Although IGO recognises the value of the Stockman project, CopperChem is ideally positioned to continue its exploration and development, while we have retained upside exposure.”

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Following the sale, IGO expects to record an after-tax impairment on the project in FY17 of up to A$20m ($15.14m), based on the asset's current carrying value. 

Closure of the transaction is expected in the September quarter this year and is subject to conditions, including ministerial approval for transfer of the mining tenements comprising the Stockman project.

IGO has a portfolio of gold and base metals mining operations in Western Australia, as well as belt-scale greenfields exploration projects.