- Azure Minerals (ASX:AZS) is reporting confirmation of a new lithium zone
- The discovery comes from AZS’ WA-based Andover project
- The zone in question correlates with the prospect of interest ‘Target Area 3’
- The company reported multiple intercepts with grades of more than one per cent lithium oxide
- Five drill rigs remain on-site
- AZS shares are down nearly a per cent, trading at $4.00 at 3:46 pm AEDT
Azure Minerals (ASX:AZS) has reported its confirmation of a new lithium zone at its WA Andover project, but shareholders aren’t too happy.
Despite posting multiple drill intercepts confirming “extensive” and “high-grade” lithium mineralisation, shares dipped into the red today.
It’s a big day for lithium news.
Allkem and Livent are set to become one new entity, and Atlantic Lithium has asked its shareholders to reject a takeover bid.
This comes not long after Azure slapped down a takeover bid from SQM.
But on a ripper day for the ASX borne from a fractionally lower-than-expected US inflation lead, Azure can’t edge into the green.
Result explanation
Before we get to why, let’s take a look at the key results.
The company flagged a range of positive drill hits from a pegmatite at Target Area 3. They were:
- 37 metres at 1.22 per cent lithium from 22.8 metres depth
- 67 metres at 1.18 per cent lithium from 41.0 metres depth
- 37 metres at 1.16 per cent lithium from 15.5 metres depth
- 65 metres at 1.11 per cent lithium from 29.0 metres depth, and
- 35 metres at 1.57 per cent lithium from 41.1 metres depth.
Perhaps inspiring caution among shareholders is that Azure – a fairly established lithium explorer with a market cap of $1.82 billion – is relying on visual confirmation of spodumene.
The pegmatite from which the drill results above were highlighted is called “AP0003/AP0004” by Azure’s geotechs.
Visual inspection caution
“Significant visual spodumene mineralisation [was] observed in the AP0003/AP0004 pegmatite over more than 1,000m of strike and 450m of down-dip extent,” the company wrote.
But a note in that release – as the ASX requires all companies relying on visuals to disclose – wasn’t exactly comforting.
“The company advises that visual observations of spodumene … should not be considered a proxy for laboratory analysis.
“[Lab analysis] is required to confirm the widths and grade of any mineralisation identified in primary geological logging.”
Eagle eyes required
But there’s a catch in the results.
The drill holes from which the visual spodumene is reported are not the same holes as those to which today’s assays relate.
While they took place in the same AP0003/AP0004 pegmatite, the company has only confirmed five drill holes positive for mineralisation.
What’s more, those spodumene hits – assuming visual confirmation is correct – are at greater depths than the assay-confirmed hits from AP0003/AP0004.
The thickest intersection visually supposed to contain spodumene at 91.6 metres was pulled from a depth starting at 82.5 metres.
Not unreachable for a company cashed up like Azure, but still a consideration.
Not all bad news
All of this said, there’s still room for upside.
The company has also confirmed lithium mineralisation at a separate pegmatite, AP0005.
The strike length there extends more than 300 metres.
The key result included 14.2 metres at 1.03 per cent lithium from 144 metres depth.
It also remains the case that five diamond-tipped drill rigs continue running at Andover on-site.
Meanwhile, another three diamond rigs and a final reverse circulation (RC) rig remain at Target Area 1.
“Drilling is continuing with many holes intersecting visible spodumene and expanding the known extents of the mineralised system to well over one kilometre in strike length,” Azure Managing Director Tony Rovira said.
AZS shares were down nearly a per cent, trading at $4.00 at 3:46 pm AEDT.