Resources Top 5: Local lithium hero Azure Minerals flies on SQM bid; Errawarra catches a ride
Here are the biggest resources winners in early trade, Thursday October 26.
WA lithium-hunting success story Azure Minerals has emerged from a trading halt today to stonk it up hard yet again, taking the ball on the fly and making a +43% burst up the ASX middle.
Jeez, greedy much? Was +14,50% YTD gainage not enough? The answer is it’s, as Robert Smith once warbled, never enough.
So what’s doing? It’s very much ado about something. AZS is making headlines today because it’s official now that major shareholder in Azure Minerals, Chilean firm SQM – one of the world’s largest lithium producers – has put in a massive offer for the Aussie explorer.
An offer that represents buying the company for $1.57bn and a potential 1430% gain in just 12 months for lips-licking AZS shareholders if they give it the enthusiastic, neck-straining nod of approval.
We’ll let one of our long-time resources experts, Josh Chiat, fill in some of the deets for you. He and Reuben Adams have been covering this to varying degrees all week…
This, from Josh’s latest Ground Breakers column:
Tony Rovira’s lithium and nickel explorer has finally emerged from its slumber to reveal one of the industry’s worst kept secrets, with the Chilean miner offering $3.52 cash per share to take the 60% owner of the Andover lithium discovery in WA’s north off the market.
The project, 40% owned by legendary prospector Mark Creasy, has demonstrated its potential to become a tier-1 lithium discovery, with an exploration target of 100-240Mt at 1-1.5% Li2O, something that would place the deposit near in league with early JORC resources at mega-deposits like the nearby Pilgangoora and Wodgina mines.
And SQM has given itself some protection against an interloper like Gina Rinehart, whose Hancock Prospecting killed a $6.6 billion bid from US competitor Albemarle for WA’s next major lithium producer Liontown Resources (ASX:LTR) by acquiring a blocking stake on market.
Should the scheme fail, SQM will make a $3.50 per share off-market takeover offer, ensuring a raider would need to outbid SQM to get a slice of the pie.
Continue reading Josh’s nuance and fact bombs on the AZS/SQM dealings here.
— Azure Minerals (@AzureMinerals) October 26, 2023
AZS share price
Got some ology of the near variety happening on the AZS news? Yep. Pop on over for a cup of coffee and a chat, ERW.
Neighbours, everybody needs good neighbours. And battery metals hunter Errawarra has a pretty bloody good one thanks very much in Azure Minerals.
ERW’s Andover West nickel project is next door to Azure’s monster Andover lithium find and the success of AZS certainly provides it with confidence that the area remains prospective for lithium bearing pegmatites.
You might want to keep an eye on others in the Azure ‘hood, by the way, such as Greentech Metals (ASX:GRE) and Raiden Resources (ASX:RDN). That said, neither of those stocks are surging at the time of writing.
$GRE is keeping a very close eye on neighbour $AZS, w/ speculation that a takeover of Pilbara-focused #lithium junior is in the works. West #Pilbara lithium is all the rage & $GRE.ax ’s tenements are 25km WSW from $AZS #Andover.Same trend, same trajectory? https://t.co/aeOSneG5Ei pic.twitter.com/ZDdwhhD1h1
— GreenTech Metals (@GreenTechMetals) October 24, 2023
But while we’re here, what else is new for Errawarra besides riding-off-coattails nearology?
Earlier this week, we told you the following:
The company’s share price moved up and to the right regarding some boardroom movement. Namely, non-exec director Jonathan Battershill’s resignation and Bruce Garlick’s appointment into a similar role.
Garlick is a finance executive with more than 30 years’ experience under his belt in the fields of mining, exploration and engineering. Handy.
On October 19 Errawarra provided a “boots on ground” update on its lithium hunt in the Pilbara, at its highly prospective Andover West project (the one adjoininf big gun projects belonging to Azure Minerals (ASX:AZS) and Raiden Resources (ASX:RDN).)
• Multiple pegmatites have been identified from ongoing reconnaissance rock chip sampling at Andover West.
• Follow-up sampling will be focused on four pegmatite zones where anomalous lithium results were previously returned.
• And the project area “continues to display potential for lithium bearing pegmatites as more are identified”.
Boots are on the ground at Andover West. The technical team are continuing to sample the highly prospective ground which adjoins Azure Minerals and Raiden Resources. #lithium #pilbara #exploration $ERW pic.twitter.com/SHDbOzUoCo
— Errawarra Resources Ltd (@errawarra) October 19, 2023
ERW share price
Several local graphite-related stocks have been stonking it this week. There’s a chief, underlying and indeed overarching reason for that. It’s Chinese curtailing of graphite exports from December 1, innit – a boon for producers and explorers outside of China. See our coverage referencing that this week here, here and here.
Greenwing is on both the graphite and lithium hunt with projects across Madagascar and Argentina.
It’s double digits up today after announcing its management team has concluded a site visit to its 100% owned Graphmada Mining Complex in Madagascar, holding a series of meetings regarding the progression of the Millie’s Reward hard rock lithium project.
Some highlights regarding that, per the company announcement:
• The Graphmada Mining Complex and infrastructure remains in good condition.
• The existing Mineral Resource of 61.9Mt at 4.5% Fixed Carbon (FC) is capable of sustaining substantially higher production volumes.
• Greenwing has commenced auger drilling at the Andapa prospect, which is the company’s secondary graphite asset in Madagascar.
• Greenwing has commenced a process to attract strategic investment for its graphite assets.
— Greenwing Resources (@Greenwing_GW1) October 23, 2023
GW1 share price
Copper and magnesite explorer Lachlan Star is… starring on the ASX today with a +47% daily gain at the time of writing.
This comes after DevEx Resources (ASX:DEV) informed the market operator that it’s now completed the sale of its portfolio of copper-gold exploration assets in the Lachlan Fold Belt to LSA.
Per Christian’s beaut Lunch Wrap…
In a great deal for DEV as well, the company gets 75,672,720 ordinary shares in LSA for a deemed value of $7.5 million (representing a holding of 36.46%) plus a 2% net smelter royalty.
DevEx’s Managing Director Brendan Bradley, and Executive Director Stacey Apostolou, will also join the board of LSA.
“The sale of our NSW copper-gold assets to Lachlan Star allows us to focus on the exciting emerging discoveries we have at the Nabarlek Uranium Project in the NT and Kennedy Ionic Clay-hosted REE Project in Queensland.
“The transaction will see the copper-gold portfolio become the key focus for Lachlan Star, with DevEx retaining exposure to the significant upside of these assets through our 36% shareholding,” Bradley said this morning.
This week LSA made a pretty significant appointment, bringing on board a highly experienced mining exec and geologist – Andrew Tyrell – as the company’s new CEO.
Tyrell was most recently the general manager (‘Discovery’) for gold producer and explorer Gold Road Resources (ASX:GOR), where he led the transition of Gold Road to a national explorer and the restructuring of the company’s Discovery group into a self-generating business development and project generation model.
He has buckets more experience besides, including 10 years at Anglo Gold Ashanti in various roles, plus he’s an exploration geologist with 20-plus years in the minerals industry with a primary focus on gold.
Probably knows what he’s talking about then, so a good get, by LSA. Shareholders certainly seem to think so.
LSA share price
New WA goldie Focus Minerals is faring well today on the back of a mineral resources update regarding its Bonnie Vale prospect in the Goldfields region.
Bonnie Vale is an underground development and part of the Coolgardie Gold Project, which covers 121km2 of highly prospective tenements on the outskirts of the Coolgardie township.
Bonnie Vale is a high-grade and high-value mineralisation resource for Focus, which the company notes has excellent recovery characteristics.
The resource update highlights are as follows:
• Underground Indicated Mineral Resource ounces have increased by 40% with 4.6% improvement in grade
• Total underground Indicated and Inferred Mineral Resource ounces increased by 16%
• Overall Indicated and Inferred Mineral Resource ounces, including potentially open pitable and historic tails increased by 40%
Focus Minerals’ executive chairman, Wanghong Yang, reckons:
“The updated Mineral Resources enable the next phase of economic assessment and advanced mine design.
“These developments will lead to updated Ore Reserves estimates and provide the basis for submissions for mine approvals.”
FML share price
At Stockhead we tell it like it is. While Azure Minerals is a Stockhead advertiser at the time of writing, it did not sponsor this article.