Azimut Exploration’s Strategic Exit from the Galinée Property

Azimut Exploration Inc. (TSXV: AZM, OTCQX: AZMTF) has closed a deal that will reshape its balance sheet and future upside. On 18 February 2026, Li‑FT Power Ltd. (TSXV: LIFT, OTCQX: LIFFF) acquired Azimut’s 50 % stake in the Galinée property, a lithium‑rich site situated in the Eeyou Istchee James Bay region of Quebec, adjacent to Winsome Resources’ Adina deposit. The transaction was executed for 2,000,000 LIFT common shares, valued at $13.4 million based on LIFT’s closing price on 17 February.

Immediate Impact on Azimut’s Capital Structure

  • Cash‑less transfer – Azimut exchanged its interest for equity in a company that is already exploring the same geological area, eliminating the need for an immediate cash outlay.
  • Deferred payment of $1.5 million – The deal includes a contingent payout payable in cash or in LIFT shares at the earlier of 18 months or the publication of a technical report with an economic analysis. This clause preserves a modest upside for Azimut, while aligning future cash flows with the property’s development trajectory.
  • 1.4 % Net Smelter Return (NSR) royalty – Despite the sale, Azimut retains a royalty stream, giving it a residual claim on any future production. In a commodities market where lithium prices have remained volatile, a 1.4 % NSR can translate into significant long‑term revenue once the site is operational.

Strategic Rationale

Azimut’s management has long maintained a portfolio of exploration assets in western Quebec, yet the company’s 2025‑2026 financials reveal a negative earnings‑per‑share environment (P/E = –40.84). By divesting half of the Galinée interest, Azimut achieves:

  1. Capital reallocation – The cash‑equivalent proceeds can be deployed into higher‑probability projects or used to shore up liquidity, a critical step given the company’s modest market cap of CAD 77.6 million.
  2. Risk reduction – The partnership with Li‑FT, an operator already engaged in the region, reduces Azimut’s exposure to exploration risk while still allowing participation through royalties.
  3. Alignment with supply‑chain dynamics – Lithium is a cornerstone of the electric‑vehicle boom. By tying its future upside to a proven lithium deposit adjacent to Adina, Azimut positions itself within a burgeoning supply chain that could drive asset appreciation.

Market Reaction and Forward Outlook

The closing of the deal has been met with cautious optimism. Analyst commentary highlights that Azimut’s share price, hovering around CAD 0.73 as of 16 February, may experience a short‑term dip due to the dilution from the 2 million LIFT shares. However, the deferred payment and royalty arrangement are expected to generate a tailwind as the property moves through its feasibility stages.

For investors, the key metrics to monitor will be:

  • Liquidity of the deferred payment – Will LIFT be able to honor the $1.5 million contingent payout when the technical report is released?
  • Progress on the Galinée development – Successful completion of the technical analysis and subsequent drilling will dictate the size of the future royalty payments.
  • Lithium price dynamics – While the NSR is fixed, the ultimate profitability of the Galinée property depends on market conditions for lithium and associated refining costs.

In sum, Azimut Exploration has turned a potential liability into a strategic partnership, preserving a stake in a promising lithium asset while freeing capital for future opportunities. The true test will be whether Li‑FT can translate the Galinée property into a profitable venture and whether Azimut can capitalize on its residual royalty stream in a market that remains as unpredictable as it is lucrative.