Perth-based explorer Azure Minerals is set to receive a $20 million investment from global lithium producer SQM to boost its Pilbara project.
Global lithium producer SQM will invest $20 million into Perth-based precious and base metal explorer Azure Minerals to become the company’s biggest shareholder.
SQM has made an initial investment in Azure of $4.2 million and intends to make a further $15.8 million investment after Azure meets certain conditions, becoming the company's biggest stakeholder with a 19.99 per cent stake.
Under the initial investment, SQM purchased 16,381,720 shares in Azure for 0.2564 per share, raising $4.2 million.
The second investment will see SQM buy an additional 61,626,471 shares for 0.2564 to raise a further $15.8 million.
The strategic investment is expected to endorse Azure’s Andover nickel, copper, cobalt and lithium project in the Pilbara, which is 60 per cent controlled by Azure and 40 per cent owned by the Creasy Group.
Azure managing director Tony Rovira said he was pleased to welcome SQM as a substantial and strategic investor in Azure.
He said it demonstrated a strong interest and belief in the lithium potential of the Andover project.
“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,” Mr Rovira said.
“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 and Azure have entered into an offtake agreement under which SQM is entitled to an offtake right of 25 per cent of all lithium product that Azure has an interest on arm’s length and commercially competitive terms.
In Western Australia, SQM and Wesfarmers are joint venture partners in the Mount Holland lithium project hoping to produce battery-quality lithium hydroxide in 2024.
On the ASX, Azure Minerals shares were up 33.33 per cent to trade at 0.30 cents at 3:10 pm AEDT.
