Think of the Pilbara region of Western Australia and the first thing that comes to mind is mining with the massive iron ore mines of BHP (ASX:BHP), Rio Tinto (ASX:RIO) and Fortescue (ASX:FMG) at the forefront along with the huge amount of infrastructure needed at the mines, along rail and road routes, and at the ports where the product feeds the global steel industry.
However, the Pilbara is also in the spotlight for other minerals, including gold, copper, base metals, manganese and increasingly the key battery metal of lithium.
Its abundance of these minerals has drawn the attention of major and larger miners who are investing in many of the small explorers operating in the region and continue to seek attractive M&A opportunities.
West Pilbara turning heads
In the last 10 years or so the Paterson Province at the northeast of the Pilbara has been at centre stage primarily for gold-copper but for the past couple of years the West Pilbara region is turning heads.
There has been some investment in gold with De Grey Mining Ltd at the forefront, having built up from your typical small-cap gold explorer to a mid-cap with a string of projects, more than 12.7 million ounces of gold resources, a market cap of approximately $2.27 billion and a growing number of investments in other explorers.
The West Pilbara with its battery metals bounty, particularly hard rock lithium, is now an investment hotspot with majors such as Rio Tinto, Albemarle and Sociedad Química y Minera de Chile S.A. (SQM (NYSE:SQM)) dipping their toes in the water and successful WA miners and investors like Hancock Prospecting, a private company controlled by Australia’s richest person Gina Rinehart, and Mineral Resources (MinRes) showing their hands.
Pilbara Minerals, with its large and growing Pilgangoora operations, is also open to opportunities and is well funded to do so while Korea’s POSCO has made a move and US lithium producer Livent has shown interest in WA.
It is also believed that De Grey may be looking to divest its lithium prospects near its Hemi gold mine.
Andover to the fore
It has been the Andover discovery of Azure Minerals Ltd (ASX:AZS, OTC:AZRMF) in the West Pilbara that has really set tongues wagging while other juniors are now tasting success also drawn to the hard rock lithium prospectivity and Andover ‘nearology’.
Azure, which is backed by renowned WA explorer Mark Creasy whose Creasy Group holds 30%, was originally focused on nickel-cobalt at Andover but it is now another battery metal in lithium that takes centre stage.
READ: Azure Minerals finds more broad, high-grade lithium at Andover
And the exploration success continues with a massive spodumene intersection of 209 metres grading 1.42% lithium oxide (Li2O) late last year, one of the world’s best lithium drill results, and an exploration target of between 100 million and 240 million tonnes grading 1% to 1.5% Li20.
There are only about nine lithium deposits in the world with this scale and potential, and a couple of these are in the West Pilbara including Pilbara Minerals’ Pilgangoora deposit (414 million tonnes) and MinRes’ Wodgina (259.2 million tonnes).
With a mineral resource estimate in the pipeline, a scoping study planned and aggressive exploration continuing, Azure looks certain to grow its $1.66 billion market cap and is an obvious target for M&A activity.
SQM (NYSE:SQM) and Hancock bid
In fact, last December Azure fielded a joint A$1.7 billion takeover from lithium heavyweight SQM and Hancock Prospecting to either acquire 100% of the company via a scheme of arrangement for $3.70 per share in cash or through an off-market cash takeover offer for $3.65 each if the former is unsuccessful.
READ: Azure Minerals fields joint SQM and Hancock A$1.7 billion takeover
Azure has entered into a new binding agreement with the bidders to facilitate the transaction, which has been unanimously recommended by its board and replaces an earlier $3.50-per-share offer by SQM in October.
The Creasy Group and Delphi Group, two major shareholders, have notified their intention to support the transaction, subject to no other superior proposal emerging.
A shareholders’ meeting is expected to be held in March to approve the transaction and thereafter, if court approval is also obtained, the scheme proposal will be implemented.
Artemis turns to lithium
Like Azure, Artemis Resources was focused on another West Pilbara metal, gold, to follow De Grey’s lead and its Carlow Castle Gold Project has a JORC resource of 704,000 gold equivalent ounces.
Artemis also owns the region’s only processing plant, Radio Hill, which is around 35 kilometres from Karratha – a major industrial regional centre – and close to Dampier port.
Lithium is now also a focus with the company holding more than 210 square kilometres in the Karratha Lithium Project within the critical Karratha-Roebourne lithium belt.
Within its tenements are the 100%-owned West Pilbara Lithium Project and the Pilbara Lithium Project, including the Osborne JV with Greentech Metals Ltd in which the latter holds 51% and where high-grade pegmatites have recently been discovered with assays returning up to 3.6% Li2O in spodumene mineralisation.
Osborne is less than 20 kilometres from Azure’s Andover discovery.
READ: Artemis Resources getting boots back on the ground in West Pilbara lithium quest
The company is confident of growing its lithium presence with recent promising results returned in sampling at the Mt Marie prospect providing further evidence of a potential corridor of lithium mineralisation extending beyond 40 kilometres in the region.
As the battery metals potential takes shape, Artemis, along with Greentech, also seems likely to draw the attention of larger players.
Novo Resources partners
The gold exploits of Novo Resources Corp (TSX:NVO, OTCQX:NSRPF, ASX:NVO) in the West Pilbara have already attracted the attention of successful neighbour De Grey Mining, which is participating in the Egina Joint Venture by spending A$25 million within four years to earn a 50% direct stake in the relevant tenements.
De Grey’s involvement followed Novo’s exploration success at the Becher, Nunyerry North and Balla Balla projects, where it has utilised innovative processes and technology to generate a series of high-quality, multi-commodity projects.
READ: Novo Resources marks new partnerships and milestones across its WA and Victorian exploration endeavours
Azure stakeholder Creasy Group has also invested in Artemis, including a 30% holding in the Nunyerry North project, further demonstrating confidence in the future of the West Pilbara.
While focused primarily on gold, Novo will also continue to identify non-gold opportunities across its Pilbara landholdings, such as lithium, nickel, copper and other base metals using the knowledge of its globally experienced exploration team.
SQM collaboration
Significantly as Novo diversifies into battery metals, it has entered a strategic collaboration with SQM through a transformative Battery Metals Joint-Venture Agreement resulting in a A$10 million investment for a 75% interest in promising lithium-nickel tenements in the West Pilbara, forming the Harding Battery Metals Joint Venture.
Novo has further strengthened its exploration footprint by joining forces with Liatam Mining Pty Ltd on the Quartz Hill Joint Venture. Liatam has surpassed the required expenditure and increased its stake in Novo, pointing to its robust confidence in the project's potential.
MinRes takes Kali stake
Providing further evidence of the growing interest in the region and the ‘nearology’ power of Andover is Kali Metals Ltd (ASX:KM1), a spinoff of gold stocks Karora Resources and Kalamazoo Resources’ lithium rights, which recently finished a $15 million IPO raise well oversubscribed.
Among Kali Metals’ suite of battery metals projects are DOM’s Hill, Pear Creek and Marble Bar in the West Pilbara with the company also holding ground in another of WA’s lithium hotspots, the Eastern Yilgarn south of Kalgoorlie.
READ: MinRes claims its stake in Kali Metals
After the successful IPO and listing, leading Australian lithium producer Mineral Resources has invested in Kali Metals, and by mid-January has accumulated a stake of close to 10%. This investment follows others by MinRes in junior lithium companies with assets in the Goldfields and Pilbara regions.
MinRes’ Chris Ellison has also invested in Kali through his private company, Wabelo, which emerged with a 4.86% stake after the IPO, separate to the MinRes holding.
Accelerate picks up speed
Another junior starting to draw attention with its West Pilbara battery metals interests is Accelerate Resources Ltd (ASX:AX8) which aims to make a mark in the global clean energy transition.
Apart from gold, the company has manganese and lithium interests, with both being critical minerals for use in new-age batteries.
The Karratha Lithium Projects comprise around 90 square kilometres of prospective ground with Prinsep Lithium Project being the most advanced opportunity where the company’s exploration team has identified at least two parallel zones of spodumene-rich, lithium-bearing pegmatite spanning the width of the tenement area.
CEO Luke Meter said: “We continue to be excited by the high-grade lithium results from our recently completed sampling at the Prinsep Project, which is located in the Karratha-Roebourne hard-rock lithium belt that also hosts Azure Minerals’ Andover lithium discovery.
“Results from the four north-south rock chip sample traverses over the Prinsep northern pegmatite, as well as extensional sampling, have now extended the known mineralisation at Prinsep beyond 1,500 metres.
“Importantly, these latest assays continue to clearly demonstrate the continunity and potential scale of the Prinsep Lithium discovery in the West Pilbara, which gives us great confidence and momentum as we advance towards our maiden drilling program scheduled for early Q2 this year.”
READ: Accelerate Resources maiden Woodie Woodie North manganese resource and exploration targets point to upside potential
At the Woodie Woodie North Manganese Project, the company has delivered a substantial maiden mineral resource estimate of 1.2 million tonnes at 19.1% manganese using a 15% cut-off.
The results also indicate a direct shipping ore (DSO) potential with an average lump and fine grade of 41.4% manganese and 13.6% iron.
Importantly, the maiden mineral resource combined with exploration target estimates confirm the project’s high-grade and scale potential.