They might accept $3 if TA2 + TA3 are both dusters in addition to a continued falling lithium price + if we have extremely bad global macro conditions
SQM wants and possibly needs this deposit, as they have a few issues looming in Chile
https://www.reuters.com/markets/commodities/sqm-albemarle-shares-slide-chile-lithium-nationalization-plan-2023-04-21/We've seen the attempted takeover of LTR for ~$7B with a similar sized deposit as TA1 alone (but more advanced / closer to production). So the discount would be for an early takeover and an early pay-day for Azure
LTR's Kathleen Valley has an MRE of 156Mt at 1.4%
AZS (TA1) current estimate is at 134Mt at 1%+
(this will be confirmed, and possibly larger by the time the MRE is released, in Q1 '24 - not that long away, and not taking into account any success at TA2 + TA3 which would be a bonus).
Other points to note:
- SQM would need to make an offer higher than $2.40 (since they participated in the raise at $2.40 to increase/maintain their position).
"the offer price cannot be lower than the price the bidder or any of its associates paid to acquire a target security in the previous four months"
*taken from an online site - would need to verify- Creasy bought more shares at $2.40 even though he already owns a truck load - i wonder why... surely he is expecting returns on his investment. He's a pretty smart guy with a proven track record.
In 4 months time we should know how good TA2 + TA3 are. If TA2 + TA3 deliver then there is definitely further upside potential (and possibly another higher takeover offer to come soon after), and IMO, minimal downside risk should they be dusters. This is around the time the maiden MRE will be released aswell.
In recent news, ASX:MIN is rumoured to be the buyer of Bald Hill for $1B (with Glencore bidding $1.8B).
Bald hill only has 26.5Mt at 1.0% Li2O (but again, closer to production).
https://www.copyright link/street-talk/minres-set-to-buy-billion-dollar-wa-lithium-mine-bald-hill-20230904-p5e1t7So AZS has a globally significant deposit in the best jurisdiction in the world. I can't see a world where they would wait 4 months+ (and AZS announce a MRE of over 130Mt) and then bid lower than the previous bid.
Pretty much all lithium stocks (and other stocks) on my watchlist have taken a beating over the past few weeks. AZS is holding strong, and for good reason. These are my thoughts anyway.
