AZMTF - Azimut Exploration Has Outstanding Lithium Discovery Potential A Gold Deposit Nickel Properties And Much More

2023-05-04 15:29:42 ET

Summary

• Azimut has ~30 exploration and development-stage properties in Quebec, Canada. This article focuses mainly on Azimut's lithium properties but also briefly discusses their promising Elmer Gold Project.
• Azimut owns several properties adjacent/near/along strike from leading lithium explorers Patriot Battery Metals (Corvette Project) and Winsome Resources (Adina Project).
• 2023 will see Azimut ramp up exploration at multiple very promising lithium properties in James Bay, Quebec; as well as a maiden resource announcement for the Elmer Gold Project.
• Risks are high due to the exploration stage, but mitigated by many promising projects and soon a gold resource. We view Azimut Exploration as a great speculative buy (high risk/high reward), suitable for a 5-year plus time frame.

Note: Quebec is shown in orange in the Canada map above.

This article first appeared in 'Trend Investing Group' on April 4, 2023, but has been updated for this article.

Azimut Exploration Inc.

Azimut Exploration Inc. ("Azimut", "AZM") [TSXV:AZM] (AZMTF) is a Canadian junior explorer with ~30 exploration projects/properties in Quebec, Canada. They focus primarily as a project generator and a JV partner in development projects across gold, copper, nickel, lithium etc in Quebec, Canada.

Azimut state they are "the largest claim holder in Quebec for Au, Co, Ni, Li". Their 30 properties are spread over 8,781 sq. km.

Azimut Exploration 5-year price chart - Price = CAD 1.20 ( source )

Elmer Gold Property (100% AZM)

Azimut's flagship is their 100% owned Elmer Gold Property. It is due for a maiden resource announcement soon. It is planned to be an initial open pit mine followed by underground mining as the Patwon deposit is 860m deep. The deposit has a wider mineralized zone (>2 g/t Au) and high grade zones (>5 g/t Au). The deposit remains open at depth and along strike with other gold discoveries already made nearby including at a parallel zone (not shown below, see page 14 ) 300m to the north of the main Patwon Zone. There is potential for gold findings along a 35km trend on the Elmer Property.

Elmer Gold Project (Patwon Gold Zone orebody model) in Quebec, Canada ( source )

Azimut's Quebec properties (includes JV projects) ( source )

Note: More details on all Azimut's projects here .

AZtechMine™

Azimut states that the Company "generates mineral exploration targets of quality using AZtechMine™ , the Company's proprietary predictive modelling methodology that applies specialized analytics to large geoscientific databases."

AZtechMine™ has been used extensively across Quebec and James Bay to identify target properties for Azimut to explore further ( source )

This article will now focus mostly on Azimut's lithium properties.

Azimut's lithium projects

Azimut's lithium properties/projects include (all in Quebec, Canada):

• Pikwa Property (50% AZM: 50% SOQUEM ) (261 sq. km) - Lies directly adjacent to the western strike extension of Patriot Battery Metals' Corvette Property. Azimut state : "Geologic and magnetic data strongly suggest the existence of a 14-kilometre-long strike extension onto Pikwa of the same geologic trend hosting the spodumene-bearing pegmatite bodies on Corvette. Rock sampling data from Pikwa.....returned highly anomalous values in lithium (up to 447 ppm Li) and other associated pathfinder elements, including tantalum (up to 79.2 ppm Ta), cesium (up to 167 ppm Cs) and rubidium (up to 960 ppm Rb). This range of values can be indicative of proximal lithium mineralization. The lake sediment footprints for lithium and other pathfinder elements-Cs, Rb, Gallium (Ga), Tin (Sn).....further underscoring the property's strong potential for lithium exploration."
• Corvet Property (100% AZM) (282 sq. km) - Lies south of Pikwa and has outstanding indicators for lithium (see purple patches in the map below). Azimut state : "The property covers an outstanding exploration target represented by an extensive and prominent 26-kilometre-long lithium anomaly in lake sediments coupled with strong Rb, Cs, Ga and Sn footprints."
• Kaanaayaa Property (100% AZM) (216 sq. km) - Has a 25.6 km strike length and several coincidental Li-Cs-Rb-Ga anomalies.

Note: All three of the above properties look extremely promising targets for lithium exploration, especially in our view Corvet. It would be ironical if 'Corvet is the next Corvette'.

Map showing the Pikwa, C orvet, and Kaanaayaa Properties all near Patriot Battery Metals' Corvette Project ( source )

• Galinée Property (50% AZM: 50% SOQUEM) (290 sq. km) - Lies directly south and adjacent to Winsome Resources' Adina Property where Winsome's drill results include 107.6 m @ 1.34% Li2O just near the boundary (see map below). Galinée has 33km of strike length. Azimut state : "Azimut's management considers it very likely that comparable pegmatite bodies are present on Galinée. This view is supported by the geology and lake sediment data collected by Azimut and SOQUEM.....The northern part of Galinée is marked by a strong lithium footprint, spatially associated with well-defined anomalies in Cs, Rb, Ga and Sn, all of which are pathfinder elements for spodumene-bearing pegmatites."

The Galinee property is located adjacent and south to Winsome's Adina Project, very close to major drill hits ( source , page 21)

• James Bay Lithium Project ("JBL") (100% AZM) (672 sq. km) - Azimut state : "[JBL] covers strong regional Li, Cs, Rb, Ga and Sn anomalies in lake sediments that may reveal significant spodumene-bearing pegmatite bodies in close vicinity (classically at the kilometre scale or less)."

Location map showing all Azimut's James Bay lithium properties ( source )

Azimut's lithium and gold opportunity summarized ( source )

Catalysts

The key catalysts in 2023 include the Elmer Gold Project maiden resource and exploration across multiple lithium projects, as well as some other multi-metal (nickel, gold, copper, PGE) project exploration results; all in Quebec, Canada.

Azimut states : "The Company will undertake its first lithium-specific exploration programs in 2023 on its own (Corvet, Kaanaayaa), jointly with SOQUEM (Pikwa, Galinée), and/or through potential new option agreements ((JBL))."

The chart below includes Azimut's 2023 plans and catalysts across all projects.

Azimut's 2023 projects' plans ( source )

Management and shareholders

Azimut's team (including Directors) have strong experience in exploration in Canada, but looks to be a small management team only. More details here .

President & CEO Jean-Marc Lulin is a senior mining executive and professional geologist with more than 30 years of experience in North America, Africa and Europe. He designed the mineral potential targeting methodology ("AZtechMine™") used by Azimut.

Management and Board ( source )

Top shareholders

Insider ownership is at ~5% , noting Agnico Eagle Mines holds 10.1%.

Valuation

Azimut's current market cap is C$96m with net debt as zero . As of Feb. 2023 cash levels were at C$8.6m .

Analyst rating is an 'outperform' with a price target of C$3.60 , representing 200% potential upside.

Risks

• Falling gold, lithium and to a lesser degree nickel prices.
• The usual mining risks - Exploration , permitting, funding , production, partner, environmental risks, and project delays. The enormous portfolio of ~30 projects will require significant future funding both to fund exploration so expect there may be some stock dilution. This is reduced somewhat by Azimut being a project generator and using project partners. This can also limit the potential upside.
• Business risks - Management, liquidity, debt, and currency risk.
• Sovereign risk - Low in Canada.
• Stock market risks - Dilution, lack of liquidity (best to buy on local exchange - TSXV), market sentiment.

Key recent news

We have covered most of the recent news in the article. You can read all the Company news here .

• April 24, 2023 - Azimut and Mont Royal Outline Nickel-Copper mineralization along a 750-metre strike length at Wapatik
• March 16, 2023 - Azimut Comments on Two News Releases from Activist Shareholders
• Feb. 23, 2023 - Azimut Provides Strategic Update.

• Largest mineral exploration portfolio in Quebec with at least 10 work programs planned for 2023.

• Elmer Gold Project advancing toward the mineral resource estimate stage, with an open-pit scenario as the first phase.

• Major strategic land position for lithium with strong and extensive targets, including two projects with significant discoveries directly on strike on adjacent properties. Aggressive field assessment phase to be implemented as early as possible after the winter season.

• Major strategic land position for nickel-copper-cobalt-PGE (200 targets) following advanced regional targeting for massive sulphide deposits of the Eagle's Nest target type.

• Focus on the Eeyou Istchee James Bay region, one of the most prospective regions in Canada with excellent community relationships, governmental support for exploration activities and infrastructure, including paved highways, airports and a world-class hydro-electric power grid........

Further reading

• Company website
• Company presentation
• Trend Investing - The Lithium Projects Near Patriot Battery Metals' Corvette Project & Winsome's Adina Project In James Bay, Quebec, Canada
• July 2022 - Azimut Expands its Positioning for Nickel in the James Bay Region (" James Bay Nickel Project") (1,070 km2)
• Oct. 2022 - Azimut's Patwon gold zone named AEMQ Discovery of Year

Azimut's James Bay Nickel Project/Portfolio (112 nickel targets) ( source )

Azimut Exploration is a multi-commodity explorer in Quebec, Canada ( source )

Conclusion

Azimut is the largest claim holder in Quebec, Canada for Au, Co, Ni, Li with ownership of 30 properties spread over 8,781 sq. km. That alone carries substantial value.

Azimut holds leading exploration properties for gold, copper, nickel and lithium and is advancing its flagship Elmer Gold Property towards a maiden resource.

James Bay Quebec is a strong region for infrastructure (major road access, hydro-electric power grid, airports) and potential large scale future lithium projects.

Near term catalysts include a maiden resource at the Elmer Gold Property and any exploration results across 10 properties being explored in 2023; notably from their most promising lithium properties in Quebec (near Corvette and Adina).

Management looks experienced but only a small team and appears to move somewhat slowly at exploration; perhaps given the large portfolio of projects despite the project generator model.

Valuation looks very attractive on a current market cap of C$96m provided the company can successfully progress one or several of their projects. The stock has recently risen significantly but this is warranted based on the lithium potential of the properties next to Patriots' Corvette and Winsome's Adina projects, the two best lithium exploration plays in Canada in 2022. Analyst rating is an 'outperform' with a price target of C$3.60, representing 200% potential upside.

Risks revolve mostly around exploration success and funding; but are somewhat mitigated to the downside by having the Elmer Gold Project and upcoming resource. Please read the risks section.

We view Azimut Exploration as a great speculative buy (high risk/high reward), suitable for a 5-year-plus time frame, especially if you are positive on the outlook for lithium, gold and nickel exploration in Quebec Canada.

As usual all comments are welcome.

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