Azure has reached a binding agreement to sell its Mexican precious and base metals projects to Bendito Resources for $20m in cash and shares.

The company will receive $6m in cash and $2m in Bendito shares while a second tranche of $4m in cash and $8m in shares is payable within 18 months.

This will give Azure Minerals (ASX:AZS) both a welcome cash injection as well as ongoing exposure to any upside from the projects through a 15% stake in Bendito, which plans to list on the Toronto Stock Exchange within 18 months from completing the transaction.

The transaction marks the culmination of the company’s decision in February 2021 to carry out a strategic review of the assets to determine how best to realise their value.

“This is a great outcome for Azure and our shareholders. We have realised a significant cash return for the assets while retaining exposure to the upside as the projects are further developed,” managing director Tony Rovira said.

“We still see potential in these high-quality, advanced-stage projects and it makes sense for them to sit within a dedicated special purpose group focused solely on Mexico, which can take them through development funded by the North American capital markets.

“The team behind Bendito have a successful track record of identifying, acquiring, developing and operating projects, so retaining exposure to these assets that we know so well should be both exciting and rewarding for Azure shareholders.”

He added that the extra funds will allow the company to accelerate activities at its flagship Andover joint venture nickel-copper project in Western Australia.

Mexican projects

The Alacrán, Oposura and Promontorio are located within the Laramide Copper Province, North America’s most prolific copper-producing district.

Alacrán hosts the high-grade Mesa de Plata silver deposit and adjacent Loma Bonita gold-silver deposit which together contain a JORC resource of 32Moz of silver and 150,000oz of gold.

It is also home to the Cerro Alacrán copper porphyry, Palo Seco silver-zinc and San Simon gold-silver prospects.

Over at Oposura, a Scoping Study carried out by Azure showed robust results for a high-quality, high-grade massive sulphide zinc-lead-silver development opportunity.

Promontorio hosts a resource of 2.9Mt at 1.4% copper, 1.5g/t gold and 35g/t silver for contained metal of 39,600t of copper, 151,000oz of gold and 3.25Moz of silver.

 

 

This article was developed in collaboration with Azure Minerals, a Stockhead advertiser at the time of publishing.

This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.