Investors opt for Azure Minerals' placement over SQM's offer in lithium exploration

Company News

by Glenn Dyer

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."

Glenn Dyer

Glenn Dyer has been a finance journalist and TV producer for more than 40 years. He has worked at Maxwell Newton Publications, Queensland Newspapers, AAP, The Australian Financial Review, The Nine Network and Crikey.

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