Gina Rinehart’s Hancock Prospecting initiates 18 per cent share raid on Azure Minerals
Billionaire mining magnate’s Hancock Prospecting Gina Rinehart has built a stake in Azure Minerals, raising questions over its takeover by SQM.
Gina Rinehart’s Hancock Prospecting has built a strategic 18 per cent stake in listed lithium miner Azure Minerals, a move which could cast doubt on a $1.6bn deal Chilean giant SQM struck on Thursday to buy Azure.
Hancock raided Azure shares on the same day the SQM deal was announced – the SQM move caused Azure shares to soar 43 per cent on Thursday – and built up on its significant stake again on Friday.
The pace and size of Hancock’s move will likely surprise market observers, coming only weeks after a similar move that stymied a takeover bid for another lithium miner, Liontown Resources, by Albemarle.
“Hancock’s investment focus is long term,” the company said in a statement late on Friday.
“Hancock has a history of successful domestic and international partnerships across resources and agriculture – including at Roy Hill (partnering with POSCO, Marubeni and China Steel), Hope Downs (partnering with Rio Tinto), S. Kidman & Co (partnering with Shanghai CRED) and multiple earlier stage exploration projects with a range of other partners.
“In each case, those businesses have benefited from the collective skills and expertise of the partners.”
With Azure’s market capitalisation at about $1.56bn, Hancock’s 18 per cent sake is worth about $285m.
Azure shares rose 1c to $3.50 on Friday. Its deal with SQM, which is listed on the New York Stock Exchange, would involve SQM buying the business for $1.6bn or $3.52 per share through a scheme of arrangement.
The move resulted in Azure’s shares soaring, jumping 43 per cent or $1.05 to close at $3.49 on Thursday.
Azure owns 60 per cent of the Andover lithium project in West Australia, and the other share is owned by another WA mining billionaire in prospecting veteran Mark Creasy.
In a statement, Hancock said Andover has had “encouraging results from initial drilling but more work is required to estimate a mineral resource and evaluate its potential”.
“Consistent with early stage projects that are pre-resource, while Andover shows good prospects, it has a long path and significant risks to navigate before its ultimate potential is known,” it said.
Hancock added that it had the “capacity to support and expedite development”.
The move comes after Hancock recently spent $1.3bn buying Liontown shares, after which Albemarle walked away from its takeover bid.
Hancock has about $20bn cash on its balance sheet, and has been boosted by receiving most of the $3bn in dividends flowing this year to the owners of the giant Roy Hill mine in WA.
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