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Pilbara’s Promising Prospects

27 October 2023 14:47
ASX: RDN

Azure Minerals (ASX: AZS) is currently in the spotlight as its $1.63 billion acquisition by Sociedad Química y Minera de Chile S.A. (NYSE: SQM) takes centre stage in this week’s market news.

Azure announced yesterday it had entered into a binding agreement with SQM, with SQM acquiring 100% of the shares in the Company by way of a scheme of arrangement for a cash amount of $3.52 per share.

This acquisition sent shock waves through the market, with Azure’s share price surging 44% in early trading following the announcement.

Azure’s Managing Director Tony Rovira said the transaction was unanimously concluded in the best interest for the Company.

“Whilst we firmly believe that Andover has the potential to be a major lithium project, there is significant time, cost and risk associated with developing a project of this scale, particularly in the context of an uncertain broader economic outlook,” he said.

“As such, the Board believes that the Transaction provides Azure shareholders with a compelling opportunity to de-risk their investment and realise certain value at an attractive premium to historical trading levels.”

This significant acquisition has also brought the Pilbara region to the forefront, emerging as a strong contender for the world’s premier hard rock lithium mining location. Upon closer inspection of mining exploration in the region, it becomes evident that aside from Azure, small to mid-cap junior explorers are the primary players in this domain.

The Prolific Pilbara Region

Situated in Northern Western Australia, the Pilbara region currently stands out as one of the most thrilling hubs for hard rock lithium exploration and production, not only in Australia but globally.

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Figure 1: Key players in the Pilbara region

Strategically positioned in close proximity to railways, highways, power sources, natural gas, and ports, this region presents a distinctive advantage, leveraging existing infrastructure to expedite production.

As this area gears up to play a pivotal role in the transition to green energy, there is a noticeable upswing in activity in Western Australia, focused on substantial lithium reserves, regardless of the persistently fluctuating lithium prices and investor sentiment.

Azure Minerals (ASX:AZS)

Azure Minerals is an exploration and development Company leading the charge in the Pilbara region, making significant strides in its high-grade lithium and nickel assets at the Andover Project.

The Andover Lithium Project comprises of hundreds of outcropping spodumene-bearing, lithium-rich pegmatites within an area of nine kilometres east-west and up to five kilometres north-south.

Surface sampling at the Project has returned numerous high grade lithium assays between 1% to 5% Li2O.

The Company has recorded substantial strike lengths, thicknesses, and depth extents of the many pegmatites drilling has intersected, offering an abundance of untested outcropping pegmatites containing high-grade lithium mineralisation at surface.

Azure is confident that Andover has the potential to host one of the largest lithium resources globally.

Raiden Resources (ASX:RDN); (DAX:YM4)

Raiden Resources‘ boasts an extensive portfolio within the fertile Pilbara region. With a specific emphasis on lithium exploration, the Company is strategically positioned to meet the rising demand for this pivotal element within the clean energy sector.

In June, the Company announced its acquisition of the Andover Lithium Project tenements, earning an 80% interest in five tenements, adjacent to the its Roebourne lithium Project and Azure Minerals’ Andover lithium discovery.

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Figure 2: Raiden’s Andover South Project and adjacent Azure Minerals’ Andover Lithium Project

Raiden recently completed a $6 million capital raise to advance it’s lithium projects, including the Andover North and Andover South Lithium Projects, Mt Sholl Nickel/Copper/Lithium Project, and Arrow Gold/Lithium project.

In September, Raiden reported substantial progress in the exploration of Andover South, including the discovery of a new 50-metre-wide pegmatite with high-grade lithium and rubidium samples, with grades reaching up to 1.81% Li2O.

Raiden has received Heritage Access Deed and Native Title Agreements, enabling the initiation of inaugural drilling and sampling operations at the Andover tenements, targeting the exposed high-grade lithium pegmatites, which have been identified as promising areas for future exploration.

GreenTech Metals (ASX:GRE)

GreenTech Metals is an exploration and development Company looking to meet the growing demand from global electrification with its high-quality suite of nickel, copper and lithium PGE assets in the under-explored West Pilbara region of WA.

The Company has already found success in the region, extending its Kobe Lithium prospect, situated within its Ruth Well Project, after 1.8% lithium oxide rock chip assays were returned, alongside confirmation of a 7.5 kilometre long mineralised zone.

GreenTech’s recently discovered pegmatites sits about 25 kilometres from Azure Minerals’ huge mineralised pegmatite swarm.

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Figure 3: GreenTech Metals pegmatite bearing zone with sample results from June discovery at Kobe Prospect

Sabre Resources (ASX:SBR)

Sabre Resources is an exploration and mining development Company with a strategic commodity focus on nickel (sulphides) and gold.

With nickel poised to play a fundamental role in the rapidly growing demand for critical lithium-ion battery components to power the electric vehicle and other renewable energy industries, Sabre is positioned well to capitalise on new market opportunities.

The Company’s flagship focus is its Sherlock Bay Nickel-Copper-Cobalt Project in the northwest Pilbara region, where it holds a resource of 24.6 million tonnes @ 0.4% nickel (Ni), 0.09% copper (Cu), 0.02% cobalt (Co), and contains nearly 100,000 tonnes Ni, 21,700 tonnes Cu and 5,400 tonnes Co.

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Figure 4: Regional Geology and Location map of the Sherlock Bay Nickel Project in WA

Sabre is confident in the prospectivity for the discovery of massive nickel sulphides, bolstered by Azure Minerals recent Andover discovery and its similar gabbroic intrusion to the Sherlock Intrusive, located a mere 40 kilometres to the west of Sherlock Bay.

Artemis Resources (ASX:ARV); (AIM:ARV); (ATY:FRA); US OTC(ARTTF:US)

Artemis Resources is a gold and copper focused resources Company, with three major projects in WA: the Greater Carlow Castle Project, Paterson Central Project and the Osborne JV Project.

The Company’s West Pilbara Lithium Project encompasses approximately 144 square kilometres of prospective tenure adjacent to Green Tech and Azure Minerals, where significant mineralisation has been found within pegmatite intrusions within Andover Mafic Intrusive and basalts of the Roebourne Group.

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Figure 5: Artemis Resources prospective exploration tenure in relation to notable West Pilbara Lithium exploration companies

Errawarra Resources (ASX:ERW)

Errawarra Resources is another exploration Company operating within the Pilbara region, targeting Nickel sulphide mineralisation at its Andover South Project, located in the north-western portion of Pilbara Craton, immediately adjacent to Azure Mineral’s Andover Nickel Project.

Andover West Regional

Figure 6: Location of the tenement and Priority EM anomalies relative to Azure’s VC-07 Ni-sulphide discovery

The Andover West Project is strategically located along the major regionally extensive, long lived and multiply reactivated Sholl Shear Zone, which trends east west through the centre of the tenement.

The Company has made progress in its exploration across the tenements, with eight conductor targets identified, heritage surveys underway and drill ready targets to be tested.

Future Focus

While Azure Minerals holds a prominent position in the Pilbara region, it is the junior explorers in this area that present the most significant growth potential.

With countries shifting towards renewable and green energy transitions, holding tenements in mining jurisdictions like the resource-rich Pilbara is becoming increasingly more popular and significant for critical mineral discovery and development.

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