PERTH (miningweekly.com) – Lithium company Sociedad Química y Minera de Chile S.A. will, through its wholly-owned subsidiary SQM Australia, take a 19.99% stake in ASX-listed Azure Minerals.
Azure on Wednesday announced that SQM has made an initial A$4.2-million investment in the company, and subject to the satisfaction of certain conditions precedent, would invest a further A$15.8-million to acquire a 19.99% shareholding.
SQM has subscribed for more than 16.38-million shares in Azure at a price of 25.64c a share, representing a premium of 13.9% to Azure’s last trading price on January 6 and a 12.4% premium to the company’s ten-day volume weighted average share price.
Completion of the second tranche of the transaction is subject to a number of conditions, including SQM completing a due diligence investigation and the two companies signing an offtake agreement under which SQM is entitled to some 25% of all lithium product in which Azure has an interest, on arm’s length and commercially competitive terms.
The conditions precedent must be satisfied within two months and either party can terminate the residual obligations under the subscription agreement.
On completion of the second tranche of the transaction, SQM will subscribe for an additional 61.62-million shares in Azure at a price of 25.64c each, raising a further A$15.8-million and bringing its shareholding in Azure to 19.99%.
Following this, SQM will have the right to appoint a director to the Azure board and to form a technical committee to assist and advise in the exploration and development of Azure’s lithium projects.
“We’re very pleased to welcome SQM as a substantial and strategic investor in Azure, which demonstrates their strong interest and belief in the lithium potential of the Andover project,” said Azure MD Tony Rovira.
“This is a significant milestone event and is a strong endorsement of Azure and our projects by one of the world’s leading lithium producers. The new relationship will allow Azure to draw upon SQM’s technical expertise in pegmatite-hosted lithium exploration, project development, production and marketing, providing Azure with strong support as we look to develop the Andover lithium assets.
“Azure is now in a very strong financial position and, following completion of both tranches of the transaction with SQM, Azure will have a cash balance of more than A$25-million which will be used to accelerate lithium exploration through a programme of intensive drilling across the Andover project.”
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