Gina Rinehart and SQM lob in $1.7B bid for Azure Minerals

Author

Future Money
December 20, 2023

⚡ Five Second Summary:

Gina Rinehart’s Hancock Prospecting and SQM (one of the world’s largest lithium producers) have launched a $1.7 billion takeover bid for Azure Minerals, presenting an improved 50-50 offer at $3.70 a share, aiming to solidify their presence in Western Australia's lithium sector.

📜 The Map

🤔 What's Happening:

  • Rinehart's Hancock and SQM propose a $1.7 billion takeover bid for Azure Minerals

  • The improved bid at $3.70 a share, up from $3.52, marks a strategic move in Rinehart's ambition to become a major player in Western Australia's lithium sector.

  • Mineral Resources, with a 13.5% stake in Azure, faces a decision to sell into the takeover or retain its position.

🔢 Numbers + Facts:

  • Hancock and SQM already control 37.8% of Azure's stock, with commitments from major shareholders Mark Creasy and Delphi Group.

  • Azure Minerals has an exploration target of 100Mt – 240Mt @ 1.0% Li2O – 1.5% Li2O at the Andover lithium project

  • Azure Minerals is up over 1500% YTD after it discovered lithium in WA

🔮 Looking Ahead:

  • WA lithium exploration and development continues to boom, ignited in large part by Rinehart’s ambition to invest in the space

  • The bid's success may lead to further collaboration between the two companies in developing early-stage lithium projects.

📈 The Company: Techgen Metals (ASX:TG1)

Market Cap: $8M | Share Price: $0.08 | Industry: Mining

TG1 is a junior exploration company focused on making a WA lithium discovery.

TG1’s project is ~50 km to the north of $316M Delta Lithium and to the south of $3.9BN Liontown Resources’ Kathleen Valley project.

TG1 expects to be drilling in Q1-2024, after it found a number of high grade lithium soil anomalies on its project at Ida Valley, WA.

How does TG1 fit into the story?

The increased bid launched by Hancock Prospecting and SQM shows the desire and value for WA hard rock lithium.

Although TG1 is a small cap explorer, the “bet” is that market interest in the area will trickle down from the producers to the explorers.

TG1 has managed to define a pegmatite field with outcrop over a 2.2km x 1.1km area.

Some of the biggest lithium discoveries in Australia have been made over a surface area smaller than TG1’s pegmatite field.

📰 Mainstream Media Coverage

Australian Financial Review

Having stomped on lithium hopeful Liontown Resources’ $6.6 billion takeover bid in October, Rinehart and her Hancock Prospecting have given us 850 million reasons why they will be more than just a minority investor or deal spoiler in Australia’s lithium land grab.

The Guardian

The deal, backed by the Azure board unless a higher offer emerges, comes amid a rush of dealmaking in Western Australia for lithium, a metal highly sought after by miners.