RIU Explorers: Tony Rovira says the giants will rule the lithium game, and Azure has one of them
Fresh off winning the prestigious Craig Oliver Award at the RIU Explorers Conference in Fremantle yesterday, Azure Minerals (ASX:AZS) managing director Tony Rovira has predicted the lithium industry will eventually mirror iron ore to become the domain of large companies and megamines.
He views Azure’s enormous Andover discovery near Roebourne, the third world class spodumene deposit found in the Pilbara after Pilbara Minerals’ (ASX:PLS) and Mineral Resources (ASX:MIN) and Albemarle’s Wodgina, as one of those.
The fateful find was made last year, three years after Azure returned from 15 years in Mexico due to Covid and partnered with legendary WA prospector Mark Creasy in the 60-40 JV.
That discovery — which now boasts an exploration target of 100-240Mt at 1-1.5% Li2O — saw Azure become the 15th winner of the award named for late Sundance Resources director Craig Oliver, joining success stories like Northern Star Resources (ASX:NST), De Grey Mining (ASX:DEG) and Pilbara Minerals.
Worth a little over 20c at the start of 2023, it appears to be set for a $1.7 billion takeover at $3.70 from SQM and Gina Rinehart’s Hancock Prospecting after major investors including Creasy and Chris Ellison’s MinRes backed the bid.
While the discovery was impeccably timed, capturing the market enthusiasm generated by record high hard rock lithium prices in the first half of 2023 ahead of the electric vehicle metal’s fall to cyclical lows of US$850/t, Rovira says Andover is the sort of find that will generate value in any part of the cycle.
“My feeling regarding the lithium market going forward is only the really big deposits are going to be developed, mined, and processed,” he said.
“My gut feel is minimum 50 million tonnes would be necessary to build an operating mine, maybe even 100 million tonnes will be the lower end of the threshold.
“So I expect that as time goes on the hard rock lithium mining industry will be similar to the iron ore mining industry, it will be dominated by a small number of large companies who have complete control of the industry.
“And a lot of the smaller hardrock lithium deposits which have been discovered in Western Australia may never be developed because they’re too small to be an operated on a standalone basis.”
Rovira believes that economy of scale will be apparent at Andover, the only lithium project he says boasts the volume of economic drill hits thicker than 100m wide reported by Azure.
That streak was extended yesterday with six hits longer than a standard soccer pitch from its AP011 pegmatite, including 112.9m at 1.63% Li2O, 152.3m at 1.15% Li2O, 112m at 1.24% Li2O, 106.1m at 1.3% Li2O, 125.2m at 1% Li2O and 112.1m at 1.11% Li2O, all in separate drill holes.
True widths across those strikes extended from 73.5m to 137.1m, with eight rigs remaining onsite for resource definition and exploration and one collecting bulk samples for metallurgical testwork.
“No other lithium project in Western Australia has got multiple 100 metre drill intersections at a true width of lithium mineralisation,” Rovira said.
“They might have one or two, we’ve got dozens. So the volume of good grade mineralisation, what’s likely to be an economic grade of mineralisation is very ubiquitous across the main area of the deposit.”
A resource is due in the second quarter of this year.
But Rovira has long been convinced the deposit would be of Tier-1 scale, even before its potential was confirmed in stellar hits released to the ASX in June 2023.
“We recognised very early on that there were a lot of these pegmatites that hosts the lithium present throughout the project area. There were literally hundreds and hundreds of these outcrops,” he remembered.
“It was when we started drilling in March and we started getting some very broad intersections of what we could see visually contained this lithium mineralisation, your spodumene — it’s one that I would say that I recognised very early on that there was potential there for well north of 100 million tonnes.
“I actually talked to the entire exploration team one day, about a year ago, and said to them, this is my expectation. I want you to go out and demonstrate to me there is potential for more than 100 million tonnes of lithium mineralisation on the ground at Andover and they were a bit gobsmacked by that.
“But they went out there and within a few weeks or months they had clearly demonstrated that was the likelihood and the rest as they say is history because we’ve been drilling and this thing is going to be well north of 100 million tonnes.”
It is not the only major award Rovira has nabbed in his career.
He was one of the key players in the discovery of the Cosmos nickel mine, winning AMEC’s Prospector of the Year award alongside Terry Grammer for Jubilee Mines in 2000.
And since Azure’s 2003 IPO, the firm has made a number of discoveries including two nickel sulphide deposits at Andover and silver deposits in Mexico, one of which is now being mined.
But the biggest is no doubt the Andover lithium discovery, which Rovira thinks can be among the four or five hard rock lithium deposits globally.
“What does it mean for me personally, obviously it’s a lot of internal satisfaction. Once again, we’ve done really, really well because most geologists will be lucky to make one really seriously good discovery in their careers. I’ve been involved in several,” he said.
“But what it means also is that the team that we built initially to explore for nickel, transitioned into exploring for lithium and had the success of finding this, which has changed their career paths and probably changed their lives going forward.
“And for that, I’m really, really pleased and it’s not just the geologist but it’s the environmental people that we’ve got, the health and safety, the community, heritage, all the administration people that we’ve got in the office are all soaking up the success that discovering Andover has brought on.
“To be awarded the Craig Oliver award here is just a wonderful recognition of the success of the entire team.”
Azure’s shares are up 15x since the start of 2023.
At Stockhead, we tell it like it is. While Azure Minerals was a Stockhead advertiser at the time of writing, it did not sponsor this article.