News Summary
On December 15, 2025, Azimut Exploration Inc. (“Azimut”) announced it has signed a non-binding Letter of Intent (LOI) with SOQUEM Inc. and LiFT Power Ltd. (“LiFT”) to restructure the Galinée Property joint venture. Under the terms, LiFT will acquire a 75% aggregate interest in the property, with Azimut selling its entire 50% stake and SOQUEM selling 25% of its 50% stake.
As consideration for its 50% interest, Azimut will receive:
– 2,000,000 common shares of LiFT Power Ltd.
– A 1.4% Net Smelter Return (NSR) royalty on the property.
– A deferred payment of $1,500,000, payable in cash or LiFT shares, at the earlier of a preliminary economic assessment (PEA) being completed or 18 months post-closing.
This transaction is part of a larger regional consolidation by LiFT, which, as announced on December 14, 2025, also includes a proposed acquisition of Winsome Resources Limited. The closing of Azimut’s sale is subject to the negotiation of definitive agreements and customary closing conditions, including TSX Venture Exchange (TSXV) approval.
Material Impact
This is a material and strategically positive transaction for Azimut. It aligns perfectly with the company’s project generator business model: discover, de-risk, and monetize non-core assets to fund exploration on core projects without shareholder dilution.
Strengths of the deal:
1. Value Crystallization: The deal immediately assigns a tangible value to the Galinée property. Based on LiFT’s concurrent financing price of CAD $4.30 per non-flow-through share, the 2,000,000 shares are valued at approximately $8.6 million. Combined with the $1.5 million deferred payment, the upfront and near-term consideration is over $10 million, which is significant relative to Azimut’s ~$83 million market capitalization.
2. Retained Upside: The 1.4% NSR royalty provides Azimut with long-term, cost-free upside on a highly prospective lithium property that will now be advanced by a well-funded, consolidated regional player. Given the proximity to Winsome’s Adina project and the excellent drill results on Galinée, this royalty could become very valuable.
3. Non-Dilutive Funding: The transaction strengthens Azimut’s treasury by providing liquid shares in another public company and a future cash payment, all without issuing new Azimut shares. This allows management to focus capital on its 100%-owned flagship projects.
4. Strategic Validation: The interest from LiFT as part of a major regional consolidation validates the quality of Azimut’s exploration work and the prospectivity of the Galinée asset.
Key Risks and Considerations:
1. Non-Binding LOI: The most significant risk is that this is a non-binding LOI. The transaction is not complete until definitive agreements are signed and all conditions are met.
2. Contingent on a Larger Deal: The Galinée sale is contingent upon the successful completion of LiFT’s acquisition of Winsome Resources and its associated financing. This larger transaction has numerous conditions, including shareholder and court approvals, which adds a layer of complexity and risk beyond Azimut’s control.
3. Share Value Fluctuation: The value of the 2,000,000 LiFT shares is not fixed. It will depend on the market’s perception of the consolidated LiFT-Winsome entity and the volatile lithium sector.
In the context of historical news, this deal is consistent with Azimut’s strategy of partnering with major companies (Rio Tinto on Wabamisk East, KGHM on Kukamas) to advance projects. The company has methodically advanced its portfolio and is now successfully monetizing certain assets while focusing its own treasury on the Elmer (gold) and Wabamisk (antimony-gold) projects. This transaction is a clear positive, de-risking the company’s portfolio and balance sheet, provided the deal closes as planned.
Catalysts
– Definitive Agreement: The signing of a definitive agreement for the sale of the Galinée interest. This is the most critical next step to de-risk the transaction.
– LiFT Transaction Progress: Updates on the status of the LiFT-Winsome acquisition, as Azimut’s deal is contingent upon it.
– Wabamisk Drill Results: Assay results are still pending for 7 holes from the Fortin antimony-gold zone and for the entire 26-hole maiden drill program on the high-grade Rosa gold zone. Positive results from Rosa could be a major catalyst.
– Elmer Scoping Study: Progress updates on the internal scoping study for the Patwon gold deposit. The selection of a consulting firm and a timeline for completion will be key milestones.
– Kukamas Exploration: Further drill results from the partner-funded program with KGHM at the Kukamas nickel-PGE project.
Materiality Conclusion
The proposed sale of the Galinée property interest is material and positive. It represents a successful monetization of a non-core exploration asset for upfront value exceeding 10% of the company’s market capitalization, while retaining significant royalty upside. The deal strengthens the balance sheet without dilution and allows management to focus on its high-priority, 100%-owned gold and antimony projects. While the transaction’s closing is subject to risks associated with its non-binding nature and dependence on a larger corporate action, the strategic rationale is excellent and validates Azimut’s business model.
