Azure Minerals shares jumped yesterday after it received the financial blessing of one of the world’s two major lithium giants – Chile’s Sociedad Química y Minera de Chile S.A. (or SQM).
Via its wholly-owned subsidiary SQM Australia Pty Ltd, SQM will invest up to $A20 million to acquire a 19.99% interest in Azure in a two-stage transaction – a strong endorsement of the potential of Azure’s Andover Project (60% Azure/40% Creasy Group) in northern WA.
The news saw Azure shares leap more than 20% to 28 cents, valuing it as a tiddler at a touch under $100 million. They had been up nearly 38% in early trading on Wednesday.
The news saw shares in other key lithium groups like Pilbara Minerals, Allkem and IGO also make solid gains.
SQM’s initial investment is $A4.2 million and, subject to the satisfaction of certain conditions, SQM will invest a further $A15.8 million to get a 19.99% interest once those conditions are met.
SQM will invest at a price of $A0.2564 per share.
Azure’s managing director Tony Rovira said the investment puts Azure in a strong position moving forward at Andover.
“We’re very pleased to welcome SQM as a substantial and strategic investor in Azure, which demonstrates their strong interest and belief in the lithium potential of the Andover Project,” Rovira said in a statement revealing the deal.
“This is a significant milestone event and is a strong endorsement of Azure and our projects by one of the world’s leading lithium producers.
“The new relationship will allow Azure to draw upon SQM’s technical expertise in pegmatite-hosted lithium exploration, project development, production and marketing, providing Azure with strong support as we look to develop the Andover lithium assets.
“Azure is now in a very strong financial position and, following completion of both tranches of the transaction with SQM, Azure will have a cash balance of more than $25 million which will be used to accelerate lithium exploration through a program of intensive drilling across the Andover Project.”
SQM is one of the world’s largest lithium producers and is a global mining and chemical company with operations in Chile and Western Australia. It is a global leader in lithium, potassium nitrate, iodine and thermo-solar salts markets.
SQM and Wesfarmers have joint venture in the Mt Holland lithium project, which will be a unique, fully integrated operation producing battery-quality lithium hydroxide from a mine and then a refinery at Kwinana capable of producing approximately 50,000 tonnes of lithium hydroxide per year.
Creasy Group, a shareholder in Azure and vendor of the Andover prospect, is also involved in Galileo mining and its emerging Callisto PGE, gold and nickel find in the Eastern Goldfields of WA. Creasy is also deeply involved with IGO via its nickel businesses at Nova and Bollinger in the Fraser Range, northeast of Norseman.
Andover, which is near Karratha, in the northwest of WA, was originally a nickel and copper play for Creasy and Azure but seems to have morphed into a lithium prospect with a series of encouraging announcements in 2022 revealing solid grades of the key metal in drilling on the prospect.
Azure says it will use the money raised from the deal to accelerate lithium exploration on the Andover Project with a priority to undertake a substantial reverse circulation and diamond drilling program to determine the scale of the mineralisation already mapped and sampled at surface.
The company will also start early-stage metallurgical, heritage, environmental, hydrological and flora and fauna studies.
Azure has already discovered two nickel-copper-cobalt deposits at Andover and released a maiden mineral resource (MRE) of 4.6 million tonnes at 1.11% nickel, 0.47% copper and 0.05% cobalt (1.41% nickel-equivalent), containing 51,700 tonnes of nickel, 21,700 tonnes of copper and 2,290 tonnes of cobalt.
