Azure launches underwritten $120 million two-tranche institutional Placement. Tranche 1 of the Placement is set to raise approximately $100 million and Tranche 2 of the Placement, which includes shares subject to shareholder approval, is set to raise approximately $20 million.
Strong support received from Azure’s major shareholders, SQM and Creasy Group, who have each committed to participate pro-rata in the Placement (SQM currently has a 19.98% shareholding but intends to top-up to 19.99% post completion of the SPP).
The Placement follows recent exploration success from maiden lithium drilling results at Andover, including intersections of 209.4m @ 1.42% Li2O and 183.1m @ 1.25% Li2O1, and the announcement of an Exploration Target of 100 – 240Mt @ 1.0 – 1.5% Li2O.2 The potential quantity and grade of the Exploration Target is conceptual in nature. There has been insufficient exploration to estimate a Mineral Resource and it is uncertain if further exploration will result in the estimation of a Mineral Resource.
Upon settlement of the Placement, Azure will be well-capitalised with a pro forma 30 June 2023 cash balance of ~$137 million (before costs) and in a strong position to accelerate exploration and resource drilling at Andover as the Company advances towards announcing a maiden lithium Mineral Resource targeted in Q1 2024.
Opportunity for eligible existing shareholders to participate via a non-underwritten SPP to raise up to a further $10 million at the same price as the Placement ($2.40 per share).
Azure Minerals Limited (ASX: AZS) (“Azure” or the “Company”) is pleased to announce that it has launched an underwritten $120 million two-tranche institutional placement for the issue of 50 million new fully-paid ordinary shares (“New Shares”) at an offer price of $2.40 per New Share (“Offer Price”) (“Placement”). Tranche 1 of the Placement (defined below) is set to raise approximately $100 million (before costs) and Tranche 2 of the Placement (defined below), which includes the issue of New Shares subject to shareholder approval, is set to raise approximately $20 million (before costs). In addition to the Placement, the Company will also be undertaking a non-underwritten Share Purchase Plan (“SPP”) at the same price as the Placement, to raise up to $10 million. The Placement and SPP will raise total gross proceeds of up to $130 million (“Offer”).
Azure’s major shareholders, SQM Australia Pty Ltd (“SQM”) (19.98% shareholding) and Yandal Investments Pty Ltd (“Creasy Group”) (13.37% shareholding), have each signed pre-commitment letters to participate pro-rata in the Placement (SQM intends to top-up its shareholding to 19.99% post completion of the SPP via Tranche 2 in the Placement). Given Annie Guo is a related party of Azure as a Non-Executive Director of Azure and an associate of the Creasy Group, the Creasy Group's participation will be in Tranche 2 and subject to shareholder approval for the purposes of Listing Rule 10.11. SQM will also subscribe for a portion of its New Shares in Tranche 2, to top-up to a 19.99% shareholding post completion of the SPP which would result in additional funds being raised under thePlacement. SQM have indicated that they intend to vote in favour of the Creasy Group’s participation in Tranche 2.
The Placement marks a critical step in the exploration and development of the Andover Lithium Project (“Andover”) and follows the announcement of multiple broad, high-grade intersections which have confirmed Andover’s potential to be a globally significant hard-rock lithium discovery.
Commenting on the Offer, Azure’s Managing Director, Tony Rovira, said:
“Azure is delighted to announce the underwritten institutional Placement, which provides a strong capital base to accelerate exploration and resource drilling at Andover as we advance towards announcing a maiden lithium Mineral Resources targeted in Q1 2024. Additionally, the Placement provides sufficient funding to progress various studies at Andover, including a Scoping Study which is expected be finalised in 2024.
The Placement provides a strong endorsement for Andover as one of the best lithium exploration projects globally, with abundant outcropping mineralised pegmatites and substantial widths of high- grade mineralisation intersected from limited drilling to date. The Company remains incredibly optimistic about the potential scale of Andover and looks forward to realising the full potential of this exciting discovery.
In addition to the Placement, we are also pleased to offer our existing eligible shareholders the opportunity to participate in the equity raising via the SPP. On behalf of the Azure Board and management, I wish a warm welcome to our new shareholders and thank all our existing shareholders for their continued support.”
Chapter One Advisors
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