Azure Minerals – Mexico’s favourite Aussies

THE INSIDE STORY: It’s encouraging when an exploration company exemplifies the definition of the term explorer, which according to my dictionary: ‘travels into undiscovered or un-investigated territory’.

In 2005, while contemporaries wrestled over projects in Australia or headed to less-politically friendly climates in Africa, Azure Minerals (ASX: AZS) journeyed to Mexico.

“We were looking for projects, but what was available in Australia was too expensive and most of the good projects had been well picked over,” Azure Minerals managing director Tony Rovira told The Resources Roadhouse.

“We looked in Central and South America, Africa and Indonesia, but Mexico stood out with better projects, not just technically, they were located in an ideal mining environment.”

Azure was by no means the first mining company to recognise Mexico’s potential.

Today over 350 mining and exploration companies with a healthy representation from North America, particularly Canada, operate in the country.

Azure was, however the first Australian company to stake its Mexican claim.

What is not celebrated outside of the America’s, is Mexico’s reputation as a mining friendly jurisdiction and mining history dating back over 500 years.

“The government and the general population understand the benefits mining brings so they want to help you and to attract more investment,” Rovira said.

“Its mining history combined with the current exploration and mining activity means there is a substantial support industry in place.

“There are dozens of drilling companies and assay laboratories, all the infrastructure you need is there.”

Azure’s introduction to Mexico was an earn-in Joint Venture with a Canadian junior company.

Once established, Azure staked properties in its own right.

Azure Minerals project locations in Mexico. Source: Company

The project to emerge as the company’s flagship is the Promontorio copper-silver-gold project, located in Chihuahua State.

Promontorio possesses high-grade copper sulphide mineralisation containing significant grades of gold and silver.

In the four years it has held the project, Azure has completed three large-scale diamond drilling programs totalling some 87 holes for around 13,000 metres.

From this drilling it has calculated an initial JORC-complaint total mineral resource of 502,000 tonnes at 4.7 per cent copper, 2.1 grams per tonne gold, 99 grams per tonne silver for 23,400 tonnes of copper, 34,000 ounces of gold and 1.6 million ounces of silver.

“It is a high-grade copper-gold-silver project that is modest in terms of tonnes at this stage, but we consider it to hold a great deal of potential for expansion,” Rovira explained.

“The most recent drilling at Promontorio was completed in January this year and the results have been very encouraging.

“We have completed a Scoping Study and a Pre-Feasibility Study as well as economic evaluation and mine planning, which have provided very positive results.

“We anticipate the increase in the resource will be enough to get this project up and running for a mine life of around eight to nine years.”

Azure recently drilled two holes outside of the Promontorio deposit to test two areas where historical shallow drilling, by previous owners, identified gold and silver mineralisation.

The first of these areas was Cascada, situated 200m northwest from Promontorio.

From 40m Azure intersected 70m of copper sulphide mineralisation grading 2.7 per cent copper equivalent.

That 70m interval included 36m of material running at 4.7 per cent copper equivalent, including a 13m intercept at 11 per cent copper equivalent.

Rovira acknowledges the result stemmed from one single drill hole, but in any language, a 70m intercept draws attention and could possibly indicate a deposit with significant size potential.

“The Promontorio deposit consists of veins varying two metres to five metres wide, whereas we think Cascada has potential to be a large volume deposit, with potential high grades as well,” Rovira said.

“Cascada definitely demands more attention and we intend conducting some serious work there involving a significant amount of diamond drilling.”


Targets surrounding Promontorio. Source: Company announcement

Testing of the other target near Promontorio called Risco Dorado, or Golden Cliff, also raised eyebrows by intersecting an 11m wide interval of silicified volcanic rocks containing disseminated and semi-massive pyrite and copper sulphides.

“It just shows the Promontorio project is not just the Promontorio deposit but includes numerous additional opportunities along strike, which require further work,” Rovira said.

“We see potential to develop a large mining operation. We’re very excited by what we have discovered so far and we will be back in there drilling as soon as we can.”

When the Global Financial Crisis brought tough economic times Azure was approached by Japanese Government organisation JOGMEC (Japan Oil, Gas and Minerals National Corporation), which also recognised Mexico’s potential for big mineral deposits, to form a Joint Venture to explore for copper deposits in Mexico.

Having similar arrangements in Australia JOGMEC was pleased to JV with a company in Mexico boasting Australian exploration expertise.

Azure’s two Joint Ventures with JOGMEC cover the El Tecolote and La Tortuga projects where the search is on for porphyry copper and skarn copper-zinc deposits.

Azure is free carried and operator of both projects.

JOGMEC can earn 70 per cent interest of the El Tecolote project by sole funding US$13 million of exploration expenditure. To date about US$3M has been spent.

So far El Tecolote has undergone several geophysical surveys, including aeromagnetics, VTEM and IP, as well as geological mapping and sampling, and 30 diamond drill holes.

Some very encouraging copper and zinc intercepts have been made, and further drilling is being planned to define the mineralised zones.

At the La Tortuga project, JOGMEC can earn 51 per cent interest by sole funding US$3 million of exploration expenditure and to date about US$2.5M has been spent.

“La Tortuga, or The Tortoise, is actually an apt name because we have been exploring this project in Joint Venture with JOGMEC for five years,” Rovira said.

“It has been progressing slowly, but with encouraging results, and we are confident slow and steady is going to help us win this particular race.”

Geophysical work at La Tortuga resulted in the identification of a large, deeply-buried porphyry copper target, into two deep diamond core holes of over 600m were drilled.

“We know the target starts around 600 metres below surface, but the strongest part of the anomaly is at a depth of about 1,000 metres,” Rovira said.

“One hole reached 660 metres and the other 605 metres. Both holes drilled into the top of the body and intersected promising looking porphyry rocks containing indications of precious metal and base metal mineralisation.

“We plan to drill another hole very soon; this time with a target depth of 1000 metres, which will take us into the middle of the anomaly.”

The next six months will be a very busy time for Azure Minerals as it works to complete the resource update for Promontorio, which is anticipated in April.

There will also be follow up drilling at Cascada and Risco Dorado plus regional mapping and sampling to identify more drilling targets within the project area.

“We also have a gravity survey at La Tortuga to assess and we expect to commence drilling the deep diamond hole very soon,” Rovira said.

“We don’t know what we will find down there, but what we’ve seen so far has been very encouraging.

“Our model is a big porphyry copper or IOCG-style of deposit, and if we’re successful then that will kick-off an entire new ball game for the company.”

Azure Minerals Limited (ASX: AZS)
…The Short Story

Level 1, 30 Richardson Street
West Perth, WA 6005

Phone: +61 8 9481 2555

Fax: +61 8 9485 1290


Peter Ingram, Anthony Rovira, Wolf Martinick

Yandal Investments Pty Ltd    5.2%
Drake Private Investmenst LLC    5.1%
Stadjoy Pty Ltd            2.5%

566 million

$44 million (at 25/02/13)

Corazon Mining maintains nickel focus amid new acquisitions

THE INSIDE STORY: To simply describe 2012 as hectic for Australian exploration company Corazon Mining (ASX: CZN) would be understating the company’s achievements.

While continuing to develop its Lynn Lake nickel asset in Canada, Corazon took advantage of opportunistic market conditions in 2012 to add new, quality projects to its portfolio.

These included the Canadian Beaucage Lake gold project and the recently-announced option to acquire the copper-gold Top Up Rise (TUR) project in Western Australia.

The new additions complement Corazon’s core focus to advance its Lynn Lake nickel-copper project, which the company believes represents a significant development opportunity.

Lynn Lake is a historical nickel, copper and cobalt mining camp which operated for more than 20 years.

The project’s exploration upside was boosted after Corazon discovered high-grade mineralisation beneath the old EL Mine, which also boasts defined near-surface mineralisation beneficial for any new mining operation.

The EL Mine was one of the highest grade nickel mines in the district, operating between 1954 and 1962 and producing 1.9 million tonnes at 2.5 per cent nickel and 1.15 per cent copper.

Corazon has estimated an interim Inferred Resource for the EL Deposit at Lynne Lake of 1.8 million tonnes at one percent nickel equivalent, including contained metal of 14,000 tonnes nickel, 9,000 tonnes copper and 400 tonnes cobalt at a cut-off grade of 0.6 percent nickel equivalent.

“We’re very much committed to nickel and to our Lynn Lake project in Canada,” Corazon Mining managing director Brett Smith told The Inside Story.

“We have a resource, and we also have significant drill-defined tonnages at surface that aren’t included in the resource, which we consider to hold potential to more than double the resource tonnage.

“We have conceptual open-cut mining studies that identify some 2 to 3 million tonnes of surface material that is not included in our resource.

“These factors will be key to starting up a mining operation in the Lynn Lake area.”

Testament to its commitment to Lynn Lake, Corazon renegotiated its Earn-In and Option agreements to acquire the project and expanded the project area.

The original agreement provided Corazon an option to acquire 100 percent ownership of the project by spending CAD$3 million on exploration and paying CAD$2 million in cash prior to 20th October 2012.

The new deal extended the option period to 20th October 2015, reduced the purchase payment to CAD$1 million and added the South Plug nickel-copper target and Barrington Lake copper deposit to the project.

The South Plug nickel-copper target is located immediately south of Corazon’s land holding and contains a differentiated mafic/ultramafic intrusion similar to those hosting the Lynn Lake mining camp nickel-copper deposits.

The Barrington Lake copper deposit is located 43 kilometres east-northeast of Lynn Lake.

Exploration activities conducted on Barrington Lake in the 1990’s defined copper mineralisation and numerous geophysical anomalies, which have never been subjected to any follow-up drilling.

Most of the historic attention at Barrington Lake focused on an outcropping zone of approximately 107m in strike and 4.6m in width, with an average grade of 2.63 percent copper.

Corazon also added a Canadian gold project to its portfolio in a strategic move to maximise its activities in the Lynn Lake region.

Corazon acquired the Beaucage Lake gold project, located 45km from the Lynn Lake project in a region hosting several one to two million ounce gold deposits.

“The Beaucage Lake acquisition wasn’t one that we deliberately pursued,” Smith explained.

“It was more opportunistic as exploration and investment activity in Canada has not been as enthusiastic as it has been in Australia recently.

“A great number of projects are becoming available and Beaucage Lake was one in which we see great exploration potential.

“It is located nearby to Lynn Lake so it provides us with an additional exploration focus that complements our other Canadian assets.”

Extensive high-grade gold mineralisation has previously been identified at surface at Beaucage Lake over a 7 to 8km strike length.

Corazon is currently compiling all available historical data for the project with a view to applying modern exploration techniques to define drill targets.

“The data accompanying the acquisition dates back to the 1980s and, not being digital, is difficult to reference,” Smith explained.

“As such, we have to get all that old information into new-world order.

“There is a lot of information including numerous high-grade gold drill results that have never been put together and looked at the way we are looking at them.”

In October, Corazon secured an option to earn up to 75 percent of private company Border Exploration, which owns 100 percent of the Top Up Rise project in Western Australia.

The TUR project is located in the Gibson Desert region of north-eastern Western Australia and is prospective for large gold-copper intrusive related deposits, similar in style to Olympic Dam, Prominent Hill and Carapateena.

The primary target identified at TUR is an unexplored gravity anomaly, which presents one of the largest amplitude residual gravity anomalies in Australia.

Exploration work conducted by Border defined the core of the anomaly to be 8km by 4km in area, which is similar in size to Olympic Dam’s geophysical anomaly.

Other exploration work at TUR has been conducted by the Australian Geological Survey Organisation and the Geological Survey of Western Australia.

This work identified a granite intrusive and alteration complex at Mt Webb, which was described as being, “large by Australian standards”, with, “characteristics of world class copper-gold systems”.

The impetus to conduct the deal came from Corazon’s broker, Hartleys, which considered the project to be an ideal joint venture for the two companies.

Smith, a director of Corazon and Border, initially believed the TUR project was more suited to development by a larger company, and was cautious in pursuing the joint venture option.

“Border’s intention was to advance the project as a private entity,” Smith said.

“Border had expressions of interest in the project from other companies, but considered it was too early for such a deal and that Border would be able to inexpensively add a lot of value to the project on its own.

“The success of early stage exploration plays such as De Graca for Sandfire and Nova for Sirius was definitely a catalyst for both Corazon and Border recognising a mutually beneficial joint venture.”

Smith stressed Corazon’s latest raft of acquisitions do not signal a shift away from the company’s chief focus – nickel.

“When you look at our Lynn Lake nickel-copper sulphide project in Canada, it is obvious nickel remains our most valuable metal, but it’s well supported by the early-stage exploration plays,” he said.

“When we extended the option on Lynn Lake we also picked up the Barrington Lake copper project and soon after completed the Beaucage gold project deal.

“These project areas in Canada also include a multitude of VMS targets containing lead, zinc and gold mineralisation.

“The reality is that Corazon’s assets already have numerous prospects containing various metals, so it’s not as if we’re chasing anything new.

“The only really obvious deviation for Corazon as far as the TUR project is concerned is that it is located in Australia, our own backyard.

“We are a small company, conscious of the cash we have and how we can preserve that cash and diligently work all the opportunities within our portfolio.
“2013 will be a very busy year for us.”

Corazon Mining Limited (CZN)
…The Short Story

Level 1
350 Hay Street,
Subiaco  WA  6008

Ph: +61 8 6364 0518   
Fax: +61 8 6210 1872



Clive Jones, Brett Smith, Jonathon Downes, Adrian Byass


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