Azure Minerals has consummated its partnership with Sociedad Quimica y Minera de Chile, the world’s largest lithium producer, after the South American giant completed a $20 million investment in the lithium junior.
Azure Minerals (ASX:AZS), which owns the Andover lithium and nickel sulphide project in WA’s north, has attracted the interest of SQM for its first major investment in a junior miner in Australia.
It means SQM will become Azure’s largest shareholder at 19.99%, with the $20m fund injection providing plenty of ammo for Azure to fire up a drilling blitz at Andover.
SQM had previously completed the first tranche of the transaction, giving it a 4.99% holding for $4.2m.
It has now completed the second tranche of $15.8m in what Azure says is a strong endorsement of the lithium potential of the Andover project, held in a 60-40 JV with legendary Aussie prospector and billionaire, Mark Creasy.
Cornerstone investment
The cornerstone investment will see SQM provide both funding and technical expertise to accelerate Azure’s lithium exploration and development program at Andover and provide a longer term path to market for future spodumene discoveries.
SQM and Azure have entered into an offtake agreement under which the major is entitled to an offtake right on up to 25% of all lithium product from mining projects in which AZS has an interest on arm’s length, commercial terms.
It is SQM’s second major move into the West Australian market, having previously picked up a 50% stake in the Mt Holland and Covalent Lithium joint venture with Wesfarmers (ASX:WES) (previously Kidman Resources), constructing what will be Australia’s third lithium hydroxide plant in Kwinana.
That plant will produce around 50,000t of lithium hydroxide for EV batteries every year.
Azure says it will use the funds to accelerate its growth strategy, fast-tracking lithium exploration with diamond and reverse circulation drilling to determine the scale of high grade mineralisation already mapped and sampled at surface.
It will also continue to progress nickel exploration and mine development studies on its Andover and Ridgeline deposits through 2023.
This article was developed in collaboration with Azure Minerals (ASX:AZS), 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.
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