ASX-listed mineral exploration company Azure Minerals has launched an underwritten institutional placement for A$120m ($76.8m) and an additional A$10m from non-underwritten share purchase plan.

Totalling A$130m ($83.2m), the underwritten and non-underwritten placement will support Azure in the exploration and development of its Andover lithium project in the West Pilbara region of Western Australia.

Azure holds a 60% stake in the project and the remaining 40% is held by Creasy Group.

The company said that the A$120m ($76.8m) underwritten institutional placement will be completed in two tranches under which it will issue 50 million new shares at an offer price of A$2.4 ($1.53) a share.

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By GlobalData

In the first tranche, the company expects to raise nearly A$100m ($63.99m), followed by the second tranche with $20m ($12.8m) before costs.

Azure stated that its major shareholders, including SQM (19.98%) and Creasy Group’s Yandal Investments (13.37%), have agreed to participate in a pro-rata basis. Post completion SQM’s investment is expected to be 19.99%.

In the first tranche, Azure plans to issue nearly 41.6 million shares followed by issuing 8.4 million shares in the second tranche.

Azure managing director Tony Rovira said: “Azure is delighted to announce the underwritten institutional placement, which provides a strong capital base to accelerate exploration and resource drilling at Andover as we advance towards announcing a maiden lithium mineral resources targeted in Q1 2024. Additionally, the placement provides sufficient funding to progress various studies at Andover, including a scoping study, which is expected be finalised in 2024.

“The placement provides a strong endorsement for Andover as one of the best lithium exploration projects globally, with abundant outcropping mineralised pegmatites and substantial widths of high-grade mineralisation intersected from limited drilling to date. The company remains incredibly optimistic about the potential scale of Andover and looks forward to realising the full potential of this exciting discovery.”

The company plans to use the proceeds from the placement towards, exploration at the Andover project, including continuing with the progression of a 100,000m lithium drilling programme, perform activities needed to advance towards maiden lithium resources, and drilling for base metals such as nickel, copper and cobalt.

It will also undertake scoping, heritage and environmental studies at the project. The proceeds will also be used for the working capital and offer cost requirements.

In a recent development, the company rejected a takeover proposal from SQM for A$901m ($583.4m) stating that the offer was lower than its stock price which boosted after it released lithium resource results at the mine.