Big shareholders in the lithium and nickel exploration company Azure Minerals (ASX:AZS)
swiftly recognised the value of investing $2.40 per share in a $120 million placement, a superior choice compared to accepting 42.31 per share from SQM, the world's second-largest lithium player.
It's worth noting that SQM holds a 19.9% stake in Azure, and it plans to increase its ownership following the placement, reverting to the same 19.9% stake it acquired in March of the previous year, which had served as the foundation for its unsuccessful takeover bid.
The fundraising effort was executed through a two-tranche institutional placement and a $10 million share purchase plan (SPP). Azure unveiled on Tuesday that it had secured commitments for the $120 million capital raising, structured as $100 million upfront and an additional $420 million after a shareholders' meeting scheduled for early October to gain approval for the issuance of extra shares.
This announcement followed reports of multiple wide, high-grade intersections, elevating the potential of the Andover lithium project in Western Australia's Pilbara region, positioning it as a potentially significant hard-rock lithium discovery on a global scale.
Azure Minerals' Managing Director, Tony Rovira, expressed enthusiasm, stating, "Azure is delighted to announce the underwritten institutional placement, which provides a strong capital base to accelerate exploration and resource drilling at Andover as we advance towards announcing a maiden lithium mineral resources targeted in the first quarter of 2024."
Rovira emphasised that the placement's funding would facilitate the progression of various studies at Andover, including the finalisation of a scoping study set to conclude in 2024. He noted, "The placement provides a strong endorsement for Andover as one of the best lithium exploration projects globally, with abundant outcropping mineralised pegmatites and substantial widths of high-grade mineralisation intersected from limited drilling to date."