Azure Minerals raises A$130M to fund Andover lithium project

Australian lithium developer Azure Minerals (ASX: AZS) has launched an institutional placement to raise A$120 million ($104.2 million). The company will issue 50 million fully paid ordinary shares at $2.40 per share in two tranches of A$100 million and A$20 million each.

The offer price represents a 12.4% discount to Azure’s last closing price of A$2.74 per share on Aug. 18, the last trading day before the announcement.

Azure’s major shareholders, SQM and Yandal Investments (Creasy Group), have each signed pre-commitment letters to participate pro-rata in the placement. SQM owns 19.98% of Azure and recently made a A$901.4 million takeover bid that Azure rejected. Creasy Group owns 13.37% of Azure.

Azure will also undertake a non-underwritten share purchase plan (SPP) at the same price to raise another A$10 million.

According to Azure, the placement marks a “critical step in the exploration and development” of the Andover lithium project. The fundraising follows the company’s announcement of multiple broad, high-grade intersections such as 209.4 metres grading 1.42% lithium oxide (Li₂O) and 183.1 metres at 1.25% Li₂O, which have confirmed the project’s potential to be a “globally significant hard-rock lithium discovery.”

Azure’s managing director, Tony Rovira, said in Monday’s press release that the placement will provide a “strong capital base” to accelerate drilling at the Andover lithium and nickel-copper-cobalt project, as the company advances towards announcing a first lithium resource, which is targeted in Q1 2024.

“Additionally, the placement provides sufficient funding to progress various studies at Andover, including a scoping study, which is expected to be finalized in 2024,” he added.

Upon settlement of the placement, Azure said it will be “well-capitalized” with a pro forma cash balance of approximately A$137 million (before costs), and in a “strong position” to accelerate exploration and resource drilling at Andover.

Located in the West Pilbara region of Western Australia, the Andover project already hosts several significant bodies of nickel, copper and cobalt sulphide mineralization. The resource is estimated at 4.6 million tonnes grading 1.11% nickel, 0.47% copper and 0.05% cobalt.