Azure Minerals (ASX: AZS) Explorers 2020

THE CONFERENCE CALLER: Azure Minerals moved from explorer to miner in 2019 when it commenced mining operations at the company’s 100 per cent-owned Oposura zinc-lead-silver project, located in Sonora, Mexico.

Azure completed the first phase of a small-scale, multi-phase mining program at Oposura that delivered impressive results.

Open pit mining selectively extracted near-surface, high-grade, massive zinc and lead sulphide mineralisation, from which ore tonnages and grades far exceed the Mineral Resource estimate Azure had determined for this part of the deposit.

“To be getting more tonnes and much higher grades than we had expected gives us great confidence in the project as we advance Oposura toward large-scale mining and on-site processing,” Azura Minerals managing director Tony Rovira said.

Azure commenced mining at Oposura in August and within two months had mined and stockpiled 6,100 tonnes of high-grade ore.

Based upon close-spaced Reverse Circulation (RC) grade control drilling and systematic stockpile sampling, the company estimated average grades of the mined ore to be 13.4 per cent zinc and 10.7 per cent lead, surpassing the estimated average East Zone open pit mine grade from the 2018 Oposura Scoping Study of 5.1 per cent zinc and 2.6 per cent lead, laying a solid foundation for a future large-scale mining and processing operation.

An extended refurbishment program delayed the commencement of operations at the third-party San Javier processing plant; however, Azure was able to locate a second plant in the district that may be suitable for processing Oposura ore and trial processing of a small batch of ore at that plant was undertaken.

Steady state toll treatment of the Oposura ore was due to commence in December to produce separate zinc and lead-silver concentrates, which Azure expects to sell on the spot market to locally-based metals traders or smelters, several of which expressed strong interest in these products.

Azure has indicated it plans a second phase of open pit mining to be undertaken following a successful processing operation producing saleable concentrates.

This mining is expected to provide a stable western face for portal access for the planned underground mining operation.

The portal and subsequent drive will access the historical Tunnel D which will be side-stripped to provide mechanised access to the western high-grade zone.

Underground development will be undertaken in ore to offset establishment costs prior to selectively mining the high-grade ore zone by the room and pillar method.

Azure was also able to regain 100 per cent ownership of the Alacrán silver-gold project from Minera Teck S.A. de C.V., a subsidiary of Canadian mining company Teck Resources Limited, which became a substantial shareholder of Azure.

Azure’s previous exploration activity on Alacrán in 2015 and 2016 discovered the near-surface, high-grade Mesa de Plata silver deposit and the adjacent Loma Bonita gold-silver deposit.

These deposits boast resources totalling:

Mesa de Plata: 10.5 million tonnes at 82 grams per tonne silver for 27.4 million ounces of silver that includes an at-surface high-grade zone of 1,8 million tonnes at 275g/t silver for 15.5 million ounces of silver; and

Loma Bonita: 5.4 million tonnes at 0.9g/t gold and 28g/t silver for 150,000 ounces of gold and 4.8 million ounces of silver.

Azure commenced drilling at Alacrán before Christmas, reporting encouraging surface sampling results from a strongly gold-mineralised breccia located in a road cutting approximately 400m southeast of the Loma Bonita resource boundary.

Channel sampling of the exposed mineralised zone returned 35.5 metres grading 3.6g/t gold and this zone has been earmarked for drill-testing in the current program.

The company is also planning drilling to test the Cerro San Simon prospect where previous drilling returned several wide intersections of low to moderate grade gold mineralisation.

While all this was happening, Azure completed the acquisition of the Sara Alicia II mineral concession that adjoins the company’s 100 per cent-owned Sara Alicia property in the northern Mexican state of Sonora by overturning an historical cancellation of the Sara Alicia II mineral concession.

The acquisition, when combined with the original Sara Alicia concession, brings the total project area to 49 hectares, strengthening Azure’s position in a gold and cobalt-rich district.

“Sara Alicia II adjoins our current holding and, importantly, the combined area covers the full footprint of the body hosting the high-grade gold and cobalt mineralisation,” Rovira said.

“We have been working on acquiring this very strategic concession for over two years and exploration at Sara Alicia was suspended so as not to generate further interest in the area and to ensure the acquisition of Sara Alicia II was completed without interference or competition.”


Directors: Peter Ingram, Tony Rovira, Dr Wolf Martinick