THE BOURSE WHISPERER: Azure Minerals (ASX: AZS) released positive outcomes from a recently-completed Scoping Study on the company’s 100 per cent-owned Oposura zinc-lead-silver project, located in Sonora, Mexico.
Azure Minerals said the study had delivered a Life of Mine (LOM) EBITDA of $237 million, NPV8 (pre-tax) of $112 million and an IRR (pre-tax) of 76 per cent, which it claims confirms Oposura as an economically and technically robust, high-margin project.
The company intimated that the low operating and capital costs, high-value concentrate, strong operating cashflows, a payback period of about 16 months and, most importantly, a C1 cash cost (per pound of payable zinc production) in the lowest quartile of world zinc producers, all support the positive project economics.
“The completion of this study with its very positive project economics represents a key milestone for the company,” Azure Minerals managing director Tony Rovira said in the company’s announcement to the Australian Securities Exchange.
“We’re immediately progressing into the Feasibility Study stage with the intention of developing Oposura into the company’s first operating mine as swiftly as possible to take advantage of the strong zinc thematic.
“The style of the deposit will deliver exceptionally low estimated operating costs, driven by the near-surface, high-grade mineralisation and efficient open pit and underground mining methods which will see Oposura’s costs in the lowest quartile of zinc producers globally.
“Furthermore, there is excellent potential that additional exploration, which is currently underway, will significantly expand the project’s resources and further improve the project economics and increase the mine life.
“We see this project as technically and financially robust and eminently financeable, and the company has received strong expressions of interest from debt providers, concentrate offtakers and strategic parties interested at the asset level.
“We look forward to advancing this project expeditiously towards production that will see Azure transition from an exploration company to a producer.”