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By Team Ace Investors
COMPANY OVERVIEW
Azure Minerals Limited ( AZS or the Company ) is led by a proven and well-credentialled technical and management team with a track record of successfully exploring and developing projects into long-term operations. Azure holds interests in five nickel and gold projects, all of which are located in the Pilbara and Eastern Goldfields regions of Western Australia.
In joint venture with prominent mining entrepreneur Mr Mark Creasy (“Creasy Group”), Azure has a 60% interest in the Andover Nickel-Copper-Cobalt Project in the western Pilbara and 70% interests in the Turner River, Coongan and Meentheena Gold Projects in the northern and eastern Pilbara. Azure also holds 100%-ownership of the Barton Gold Project.
On 14th July 2023, the Company announced assays have confirmed another two very broad intersections of lithium mineralisation at the Company’s Andover Project (Azure 60% / Creasy Group 40%), located in the West Pilbara region of Western Australia. The Andover pegmatite swarm extends over an area of 9km (east-west) and up to 5km (northsouth) and comprises hundreds of outcropping pegmatites with many containing high lithium grades identified from extensive surface sampling. To date, 33 diamond core holes have been completed for 11,150m and 66 RC holes completed for 12,164m. Drilling is currently testing along the +2,000m strike extent of the corridor containing the AP0009, AP0010, AP0011, AP0012 and AP0014 pegmatites.
Source – Company’s Report
In conjunction with the strongly mineralised intersections previously reported, the new results continue to define strong continuity of broad widths of highgrade lithium mineralisation, both laterally along strike for more than 1,200m and down-dip from near-surface to vertical depths in excess of 350m.
TECHNICAL CHART
Note – The stock chart pattern is exhibiting that the stock is in strong upward territory based on Overbought Stochastic and investors can expect this trend to continue from there. Based on 20 DMA Support, Upper Bollinger Band Walk and Bullish Swing Setup indicators, the chart represents a buy case.
INVESTMENT RATIONALE
- SQM completes A$20m investment into Azure – Global lithium company Sociedad Química y Minera de Chile S.A., via its wholly-owned subsidiary SQM Australia Pty Ltd (“SQM”), completed its cornerstone investment of A$20 million to acquire a 19.99% interest in Azure in a two-stage transaction. This strategic investment by SQM is a strong endorsement of the lithium potential of the Andover Project and highlights the upside potential for Andover to grow into a globally significant lithium mining and processing operation. SQM is a global mining and chemical company with operations in Chile and Western Australia. It is a global leader in lithium, potassium nitrate, iodine and thermo-solar salts markets and is one of the world’s largest lithium producers.
- Azure has embarked on an accelerated growth strategy to rapidly advance the Company’s multicommodity opportunity at Andover, with the major focus on assessing the lithium potential while still progressing the nickel sulphide project through exploration and development studies. The Andover pegmatite swarm contains more than 700 individual outcropping pegmatites occurring in a zone approximately 9km long and up to 5km wide in the central and eastern parts of the Project area. The pegmatite bodies typically trend in a southwest to northeast orientation and are generally shallowly dipping towards the northwest. Surface exposures range in size up to several hundred metres across and over a kilometre in length.
- Maiden Resource Delivered for the Ridgeline Nickel Deposit – A maiden Mineral Resource Estimate (MRE) of 1.3Mt @ 1.11% Ni, 0.46% Cu and 0.05% Co, for 14,700t of contained Nickel, 6,100t of contained Copper and 640t of contained Cobalt at a cut-off grade of 0.5% Ni (JORC 2012) was defined for the Ridgeline Deposit. This is the second MRE to be defined on the Andover Nickel Project following the release of the MRE for the Andover Deposit in March 2022). Global mineral resources for the Project, including both the Andover Deposit and the Ridgeline Deposit, now stand at 6Mt @ 1.11% Ni, 0.47% Cu and 0.05% Co for 66,400t of contained Nickel, 27,800t of contained Copper and 3,100t of contained Cobalt at a cut-off grade of 0.5% Ni (JORC 2012).
Source – Company’s Report
- Azure holds a large, mostly contiguous, strategically situated portfolio of eight tenements covering 888km2 within the gold-rich Kookynie district and covering potential extensions to the south. The landholding comprises: Four granted Exploration Licences (E40/393: 198km2, E40/432: 32km2, E31/1278: 114km2, E31/1280: 128km2); and Four Exploration Licence Applications (ELAs) with Azure as sole applicant (totalling 543km2). It hosts numerous under-explored mineralised trends covering greenstone belts, adjacent granite margins and favourable structural settings that are considered prospective for hosting significant gold and base metals mineralisation. Several growing gold deposits and significant gold development projects are located close to Azure’s projects, including: Genesis Minerals Ltd: Ulysses Gold Project (2,017,000oz gold resource), which includes the Puzzle North deposit (232,000oz gold resource), which abuts the southern boundary of Azure’s E40/393; and Saturn Metals Ltd: Apollo Hill Gold Project (944,000oz gold resource).
ACE’s RECOMMENDATION:
Underpinning its exploration results and the exciting potential for further discoveries, the Company has established and are successfully executing a dual pathway strategy focused on resource growth together with a program of project development studies. Through progression and execution of this strategy, it has a significant opportunity to continue to grow the Andover Project into a major operation and define a new nickel province in the Pilbara region of Western Australia.When in operation, the Company expects Andover will be producing high-purity nickel and copper concentrates, with a low-carbon intensity that is traceable from the mine to the end-product. It will be truly exciting to develop an operation that is contributing to a cleaner future. Timing could not be better as the global shift towards decarbonisation and electrification continues at a rapid pace.Azure has embarked on an accelerated growth strategy to rapidly advance the Company’s multi-commodity opportunity at Andover, with the major focus on assessing the lithium potential while still progressing the nickel sulphide project through exploration and development studies. Azure has a clear focus and strategy tailored to defining a new nickel-producing province in the Pilbara. The results and growth delivered over the past 12 months place the Company in a strong position for further success in FY2023 and beyond. We recommend the stock as BUY at closing price of $1.78.
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