AZURE Minerals Limited (ASX: AZS)
The stock price is trending above the 50-day moving average, yet it maintains an upward trajectory. Several factors support the market consolidation and trigger a rally to persist in the next couple of months' time. ASX markets are on a rally in the backdrop of a softening U.S. 10-year bond yield, which dropped from 5% to currently at 3.952%, nudges liquidity flow all over. Furthermore, the Bank of England also takes a holding stance on interest rate decisions. The U.S. seems to follow the same trend in support of economic growth. The risk of currency depreciation is also somewhat neutralized.
The share price of AZS is showing a superb uptick in the last year of return, approximately 1577% (YTD as of 15 December 2023), which is phenomenal and marks the year 2023 as a remarkable stock runner.
Company’s latest frontiers:
Azure Minerals Limited (ASX: AZS) reported on 5 December 2023, in regards to the proposed acquisition of 100% of the shares in Azure by SQM by way of a scheme of arrangement for a cash amount of $3.52 per Azure Share and a simultaneous conditional off-market takeover offer for a cash amount of $3.50 per Azure Share, If the scheme is not successful, then. The management announced on 26 October 2023, that the company’s shareholders support the transaction by voting in favor of the scheme and accepting the takeover offer if the scheme is not successful.
Azure announced on 15 November 2023, that assay results from early diamond drilling (DD) at TA3 confirmed the presence of extensive and high-grade lithium Li2O mineralization in multiple pegmatites.
Findings on AZS prospects (60% holding) and the Andover project:
The Andover project consists of numerous broad, high-grade drill intersections firmly entrenchment, position amongst the best lithium exploration projects globally. In the September 2023 quarter, a significant exploration target was estimated for lithium mineralization within Andover Target Areas 1, 2, and 3.
As of October 11 October 2023, the company had successfully concluded a capital raising that consisted of $120 million in two-tranche placement and a $10 million SPP.
View point for future growth prospects:
Azure saw good progress in the development of its existing projects for the year, as highly optimistic results were returned from the assays from the drilling campaign at Andover as well as the Barton project. Despite the progress, the company still stands in a risky position given the already high exploration and evaluation expenses, which are expected to continue at the same scale in the coming years relative to the company’s cash inflows and existing cash balances, further hindering future capital expenditure and growth capabilities on an organic basis.
Azure Minerals shares downgraded
Analysts at Bell Potter have downgraded AZS share to a hold rating from buy.
• According to their analysis, change to HOLD (speculative) from buy, given the recently announced and AZS Board-recommended $3.50 per share takeover offer. They considered SQM's offer pre-empts several potentially significant price catalysts for AZS, including:
• Drill testing of Target Area 3.
• Identification and drill testing of the next generation target areas; iii) the initial Andover lithium mineral resource (guided for 1QCY2024).
According to them, there is a risk of an AZS share price decline to pre-offer levels if the scheme is unsuccessful. The view points for the holding stance include:
• AZS just completed a $130 million capital raise to execute its exploration plans.
• SQM's takeover offer should provide a floor price as SQM attempts to increase its ownership as much as possible.
• AZS has several potentially significant price catalysts through CY2024.
• Given that Yandal owns 40% of the Andover Lithium Project and 13.2% of AZS, the ultimate ownership of the Andover Lithium Project is still very much to be decided.
Frequently Asked Questions (F.A.Q)
Could Azure Minerals Limited (ASX: AZS) be a lithium stock to watch?
The company has a potential world-class lithium resource base, which underpins the substantial widths and strike lengths of individual pegmatites, and an Andover pegmatite swarm with hundreds of outcropping pegmatites, which could make the lithium stock worth watching.
What does an Azure mineral do?
AZS is an Australian mineral exploration company. Until early 2020, its principal focus was on exploration for gold, copper, silver, and zinc in Mexico, but following the worldwide onset of COVID-19 in 2020, the company transitioned back to Australia with the acquisition of a number of gold and base metal projects in WA.
Has the AZS delivered a better return than the ASX 200?
The share price of AZS is showing a superb uptick in the last year of return, approximately 1577% (YTD as of 15 December 2023), which is phenomenal and marks the year 2023 as a remarkable stock runner.
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