IGO (ASX:IGO) owns the massive Nova Nickel Mine on the Fraser Range in the remote climes of south-east WA.

While the discovery of Nova by the former Sirius Resources (taken over by IGO in 2015) was hailed as one of the finds of the century, it has proven difficult to follow up.

While it is spending around $40 million a year looking for another one and recently stumped up to buy legendary prospector Mark Creasy’s nearby Silver Knight deposit, it has had little success.

At the moment Nova looks like running out in 2027, posing some big headaches for IGO which has set its sights on becoming a long-term supplier of battery metals nickel, copper, cobalt and lithium.

Mid-tier nickel miner Western Areas (ASX:WSA) is smaller in scale, but with the Odysseus mine set to open in FY2023 and more life across its Forrestania nickel mines, it has emerged as a takeover target for IGO.

Western Areas confirmed an approach from IGO to the market this morning, sending its shares skyrocketing by more than 10%.

“Western Areas confirms that it is in preliminary discussions with IGO Limited in relation to a change of control proposal and the basis upon which engagement and due diligence between the parties could proceed,” the company said in a statement.

IGO similarly confirmed the ‘preliminary discussions’ in its owns statement to the ASX.

Like IGO, Western Areas is a supplier of nickel to BHP’s Nickel West division, which is engineering a major pivot from supplying stainless steel to battery makers and EV producers including Tesla.

In July it released a long-term outlook showing it would be able to sustain production of upwards of 20,000tpa of nickel in concentrate into the next decade.

“The outlook for nickel demand remains strong with stainless steel and battery metals expected to continue to be in high demand in the medium and long term,” MD Dan Lougher said at the time.

He added that “Western Areas is one of the few companies that has a clear line of sight toward sustained nickel production into the 2030’s”.

“There remains real potential for further growth in the schedule with projects currently well advanced in studies and planning, such as the New Morning project, that we expect will add additional nickel tonnage to the 10-year base case.”

IGO shares are up more than 100% over the past year on the back of enthusiasm about battery metals and its deal to buy half of Tianqi’s Australian lithium operations including part of its stake in the world class Greenbushes mine.

WSA is up a more measured ~15%.

Western Areas and IGO share prices today: