SQM’s planned takeover of Azure Minerals is “dead in the water”, according to Mineral Resources boss Chris Ellison, but a MinRes takeover offer for the WA junior is not on the cards.
Speaking after MinRes’s annual meeting in Perth on Thursday, Mr Ellison played down the prospect that the company’s lithium junior buying spree will lead to take over battles for control of multiple companies.
Mr Ellison was at pains to deny that MinRes was working in association with Gina Rinehart’s Hancock Prospecting in either the company’s play in Azure Minerals or in Delta Lithium. But the MinRes boss said it was clear that a deal would need to be sorted out over the competing interests in Azure because SQM’s $1.6bn bid could not succeed.
“From where I’m sitting it looks like it’s dead in the water,” he said.
“If you have a look on the share register, you’ll find it’s probably about half a dozen different organisations that actually own most of Azure. And I’m not sure if any of those are willing sellers. A couple of them are, maybe. But there’s probably three or four in there that are buyers.”
MinRes has picked up 13.6 per cent of Azure shares, with SQM holding 20 per cent, Hancock Prospecting at 18.3 per cent and Mark Creasy’s prospecting group at about 13.2 per cent. In addition, an investor group associated with Germany’s Wilhelm Zours holds a 10.4 per cent stake.
The deal is initially structured as a scheme of arrangement, which would fall away and turn into an on-market takeover if any other party obtains a stake in the company greater than 19 per cent
But Mr Ellison played down the prospects of MinRes emerging with a full takeover play in its own right.
“I like the deposit, I like what they’ve got in the ground. And our expectation is that it’s going to keep growing and it’s going to be a tier one orebody. I’d be very happy if I wind up with 12 to 15 per cent of the orebody.”
MinRes has been an aggressive buyer of stakes in junior lithium explorers this year, with the company now owning significant stakes in Global Lithium, Delta Lithium, Bill Beament’s Develop (which is acquiring Essential Metals), Wildcat Resources, and Azure Minerals.
Its strongest position is in the Goldfields region around Kalgoorlie, where the company now owns the Mt Marion mine and processing plant, and the Bald Hill operations. MinRes has also secured deals with a number of smaller gold miners for lithium rights in the region.
Mr Ellison said the company’s broader strategy was still evolving, but MinRes hoped to be able to build a third processing plant in the region within a few years.
“I’d like to think that we could toll treat a lot of that dirt and we’d probably be looking at trying to do something very similar up in the Pilbara,” he said.
“I really don’t have a clear plan on that other than taking a hold of the share of the orebodies. It will be interesting to see what falls out as they progress.”
Mr Ellison told shareholders that MinRes had intervened in Delta Lithium because he was concerned about the direction of the company, particularly its plans to export a direct shipping ore.
MinRes spent about $80m on a 17.5 per cent stake in Delta in August, before forcing a change on the board in which executive chairman David Flanagan exited the company. Mr Ellison became chair, and MinRes lithium boss Josh Thurlow joined its board.
“I wanted them to be much more focused on getting out there and acquiring more rocks. So put drill rods in the ground, explore and add more rock to the business,” he said.
Note the reference to building a 3rd plant and toll treating - and doing something similar in the Plibara.
And from yesterday's MIN AGM presentation:
https://announcements.asx.com.au/asxpdf/20231116/pdf/05xdbtpw5vvfc1.pdf
Selling after March 2024 works for me, so does not selling, ever.
GLTAH!
