Article by Alivia Thomson courtesy of Australian Mining
Lithium upstart Azure Minerals has been officially acquired by joint bidders Sociedad Química y Minera de Chile S.A. (SQM) and Hancock Prospecting for $1.7 billion.
Azure was sold to the companies via a scheme of arrangement for $3.70 per Azure share.
“All Azure shares have been transferred to SH Mining,” Azure Minerals said.
“Azure shareholders recorded in the Azure share register as at 5.00pm AWST on Monday, May 6 2024 have today been paid $3.70 per Azure share held at the scheme record date in accordance with the terms of the Scheme.
“An application will shortly be made to remove Azure from the official list of ASX.”
SQM first announced its intention to acquire Azure in October 2023, amid the Western Australian lithium frenzy which saw major lithium miners such as Hancock Prospecting and Mineral Resources snap up stakes in promising WA lithium players such as Liontown Resources and Wildcat Resources.
SQM’s scheme of arrangement comprised SQM acquiring 100 per cent of Azure shares for $3.52 per share, valuing Azure at $1.63 billion. The transaction was unanimous recommended by the Azure board.
Azure managing director Tony Rovira said at the time that SQM would be an ideal suitor to bring the promising Andover lithium project into production.
“While we firmly believe that Andover has the potential to be a major lithium project, there is significant time, cost and risk associated with developing a project of this scale, particularly in the context of an uncertain broader economic outlook,” Rovira said.
“As such, the board believes that the transaction provides Azure shareholders with a compelling opportunity to de-risk their investment and realise certain value at an attractive premium to historical trading levels.
“The transaction also presents a great outcome for other stakeholders in Andover, who will benefit from the project being developed by an experienced, well-capitalised and highly regarded company in SQM.”
The transaction caught the eye of Gina Rinehart’s Hancock Prospecting, with the company acquiring a strategic stake of 18 per cent of Azure’s ordinary shares a few days later.
Things stayed relatively quiet until right before Christmas, where Azure entered into a transaction implementation deed with SQM and Hancock Prospecting, which replaced SQM’s original $1.63 billion takeover offer.
Under the new deed – which has now been completed – SQM and Hancock would acquire 100 per cent of shares of Azure shares as joint bidders, by way of a scheme of arrangement for a cash amount of $3.70 per share.
“The transaction delivers a fantastic outcome for Azure shareholders, including a significant uplift in value from the original SQM transaction despite elevated market volatility and the recent deterioration in lithium prices,” Azure managing director Tony Rovira said in December 2023.
“The transaction also represents a great outcome for the wider stakeholders in Andover, who will benefit from the significant financial strength and expertise of one of Australia’s largest and most well-respected mining and exploration companies, Hancock, combining with SQM to oversee successful development of Andover.”
The Andover project is located in the West Pilbara region of WA and is in the exploration phase. As of April 29, a total of 113,419 metres of lithium-focused drilling has been carried out, resulting in broad, high-grade lithium intersections being delivered on a consistent basis.
Most recently, Azure discovered a “substantial” lithium deposit at Andover’s Target Area 3 that confirmed consistent thickness and grade of the lithium mineralisation within the AP0004 and AP0002 pegmatites.
Azure said the discovery confirmed a major lithium-mineralised system is present at Target Area 3, and that Andover has the potential to be a lithium project of global significance.
Azure has also uncovered several significant bodies of nickel, copper and cobalt sulphide mineralisation at Andover, sealing its fate as a project to keep an eye on.
