Azure Minerals Ltd (ASX:AZS, OTC:AZRMF) has received firm commitments to raise $120 million as it looks to accelerate exploration and resource drilling at the high-grade Andover Lithium Project in Western Australia’s West Pilbara region.
The two-tranche placement involves the issue of 50 million new fully-paid ordinary shares at an offer price of $2.40 per share.
Azure raised around $100 million in tranche 1 of the placement, while tranche 2, which includes the issue of new shares subject to shareholder approval, is set to raise another $20 million.
Major shareholders participate
Major shareholders SQM Australia Pty Ltd and Creasy Group’s Yandal Investments Pty Ltd had signed pre-commitment letters to participate in the placement to maintain their 19.98% and 13.37% holdings respectively.
SQM also intends to top-up its shareholding to 19.99% by participating in a subsequent non-underwritten share purchase plan (SPP) to raise up to $10 million.
Once the placement is settled, Azure will be well-capitalised with around $137 million cash before costs (pro forma cash balance at June 30, 2023).
This is a strong position to accelerate exploration and resource drilling at the globally significant Andover discovery, as Azure advances towards announcing a maiden lithium mineral resource targeted in Q1 2024.
"Strong support"
Azure’s managing director Tony Rovira said: “The strong support shown from both new and existing institutional investors in this placement is testament to Andover as one of the best lithium exploration projects globally.
"We look forward to further delineating the potential scale of this exciting discovery.
"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 long-standing support.”
Settlement of tranche 1 is expected to occur on August 28, 2023, with the new shares to be allotted on Tuesday, August 29, 2023.
Completion of Tranche 2 includes the issue of new shares subject to shareholder approval, which will be sought at an extraordinary general meeting in early October, with settlement to occur shortly thereafter, subject to shareholder approval.
Barrenjoey Markets Pty Limited and Canaccord Genuity (TSX:CF, LSE:CF) (Australia) Limited acted as joint lead managers and underwriters on the placement. K&L Gates acted as legal adviser to the company.
Share purchase plan
In addition to the placement, Azure is seeking to raise $10 million in a share placement plan to existing shareholders, who can apply for up to $30,000 worth of new ordinary shares at an issue price of $2.40 per share — the same price as the new shares to be issued under the placement.
The non-underwritten SPP is available to eligible existing shareholders who had a registered address in Australia or New Zealand on the company’s register at 7:00pm (AEST) on Friday, August 18, 2023.
Azure expects the SPP is expected to open on Wednesday, August 30, 2023, and close on Wednesday, September 13, 2023.