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Azure Minerals Commences Mining Operations at Oposura Project in Mexico

THE INSIDE STORY: Azure Minerals (ASX: AZS) has commenced mining operations at the company’s 100 per cent-owned Oposura zinc-lead-silver project, located in Sonora, Mexico.

Azure Minerals is mining easily accessible, high-grade mineralised material, from which it anticipates achieving monthly production of between 1,500 tonnes to 3,000 tonnes at grades between 10 per cent to 15 per cent combined zinc and lead.

All mineralisation to be mined is classified as Indicated Mineral Resources.

Azure said it anticipates starting to process this ore in September under a toll treatment agreement with a third-party sulphide flotation processing plant.

The subsequent delivery of positive cash flow to the company will support the ongoing Feasibility Study into a full-scale mining and on-site processing operation and provide general working capital.

“We acquired Oposura in August 2017, and to be commencing an early-stage, low-cost, high-grade mining operation within 24 months is a great achievement,” Azure Minerals managing director Tony Rovira said.

“This operation allows Azure to realise early cash-flow that will help fund the ongoing Feasibility Study, which will ultimately see Oposura in full-scale production.”

Oposura is a relatively small-scale mining operation, focused on mining easily accessible, high-grade, massive sulphide mineralisation from the project’s East Zone Mineral Resource.

Azure is to undertake the mining in two phases, initially by open pit, which is currently in progress, to be followed by underground extraction.

During July, Azure mobilised an open pit mining contractor to the Oposura site.

Work completed to date includes refurbishing of an approximately six-kilometre-long access road between the main highway and the mine site, prestripping overburden from above the massive sulphide horizon, grade control drilling, and mining and stockpiling of ore.

Phase 1 mining is removing, via open pit, fresh massive sulphide mineralisation situated on the eastern side of the East Zone mineral resource.

Mineralisation in this area occurs within five metres of surface and in some places is already fully exposed.

Overburden consists of weathered rock which is being stripped by bulldozer with no drilling and blasting required, ensuring low mining costs.

Since mining started, over 1,200 tonnes of ore have been excavated and stockpiled.

Based on mineral resource drilling within the mined area, where hole spacing is approximately 25m by 25m, the grade of this material is estimated to be between 10 per cent and 15 per cent combined zinc and lead.

The mineralised horizon of massive sulphides ranges in true thickness between one and four metres.

Open pit mining is expected to continue throughout July and August with several thousand tonnes of high-grade ore expected to be produced.

The western wall of the open pit will be cut back to enable access directly into the historical Tunnel D drive.

The underground mining contractor should mobilise to site in August to commence Phase 2 mining.

Initially, a portal will be established in the western wall of the open pit to access the Tunnel D drive which will then be side-stripped to provide 3m by 3m mechanised access to the western high-grade zone.

Underground mining will be carried out by the room and pillar method to ensure maximum ore recovery while minimising dilution.

Ore transport to the San Javier flotation plant will start in August and processing under the toll treatment arrangement is expected to commence in September.

 

Web: www.azureminerals.com.au

Azure Minerals Making Mexican Mine Movements

THE INSIDE STORY: The movement companies make from the exploration phase into the mine developmental process makes hard work of creating market interest.

Case in point: Azure Minerals (ASX: AZS) and its 100 per cent-owned Oposura zinc-lead-silver project, located in Sonora Mexico.

After acquiring the project in 2017, Azure soon reported high-grades of zinc, lead and silver of greater than 10 per cent zinc, 10 per cent lead and 40 grams per tonne silver, recording maximum values of 49.6 per cent zinc, 34.1 per cent lead and 448g/t silver, attracting plenty of market attention.

Samples from the massive sulphide zones of the project returned copper grades in the range of 0.5 per cent to one per cent copper, adding further interest.

Azure defined a body of high-grade, massive sulphide-hosted, zinc, lead and silver mineralisation, to deliver an initial Mineral Resource Estimate (MRE) of 2.9 million tonnes at 5 per cent zinc, 2.8 per cent lead and 17g/t silver.

These figures were too good to ignore, and a subsequent Scoping Study has determined Oposura to be an economically and technically robust, high-margin project.

Based upon metals prices of the date of the MRE, the Oposura project is expected to generate total positive EBITDA of $237 million and an NPV of $112 million, with an Internal Rate of Return of 76 per cent and a 16 month payback period.

The study determined low operating and capital costs, high-value concentrates, strong operating cashflows and, most importantly, a C1 cash cost (per pound of payable zinc production, net of by-product credits) in the lowest quartile of world zinc producers, all support the positive project economics.

It also demonstrated an optimal mining rate of approximately 500,000 tonnes per annum from both open pit and underground mining operations, at Life of Mine (LOM) average grades of 4.6 per cent zinc, 2.6 per cent lead and 15.9g/t silver, delivering an initial mine life of 5.3 years.

Approximately 95 per cent of the zinc and lead mineralisation to be mined in the first year sits in the current JORC Indicated Mineral Resource category, ensuring most of the payback period of 16 months will be achieved by mining Indicated Resources.

The processing flowsheet comprises two-stage crushing followed by ore sorting utilising Dense Media Separation (DMS) to reject waste material and to feed an upgraded product to the milling and flotation circuit at approximately 295,000 tonnes per annum at LOM average grades of 7.5 per cent zinc, 4.1 per cent lead and 24.5g/t silver.

This will result in high recoveries and clean, commercial-grade concentrates averaging grades of 53 per cent zinc with an average zinc recovery of 87.5 per cent.

It will also produce average lead concentrate grades of 60 per cent lead and 320g/t silver with an average lead recovery of 85 per cent and average silver recovery of 67 per cent.

Oposura will produce approximately 35,000 tonnes of zinc concentrate and 16,000 tonnes of lead concentrate annually, containing approximately 19,000 tonnes of zinc and 10,000 tonnes of lead respectively.

Annual production of lead concentrate will contain approximately 145,000 ounces of silver.

The project is anticipated to be in production by late 2020 to early 2021.

The study was supported by continued Resource infill and extension drilling that returned further high-grade mineralisation over substantial widths.

Mineral Resource infill drilling in the East Zone returned:

OPDH-184
5.25 metres at 24.4 per cent zinc and lead (Zn+Pb) and 34g/t silver, including 3.05m at 39.3 per cent Zn+Pb and 54g/t silver;

OPDH-185
8.65m at 11.4 per cent Zn+Pb and 17g/t silver, including 4.55m at 19.6 per cent Zn+Pb and 29g/t silver; and

OPDH-194
6m at 11.7 per cent Zn+Pb and 13g/t silver, including 2.95m at 21.9 per cent Zn+Pb and 23g/t silver.

Central Zone Resource extension drilling returned wide zones of near-surface, high grade mineralisation, including:

OPDH-159
6.15m at 15.7 per cent Zn+Pb and 97g/t silver, including 4.8m at 19.3 per cent Zn+Pb and 122g/t silver;

OPDH-171
4.4m at 20.4 per cent Zn+Pb and 294g/t silver, including 3.6m at 24.2 per cent Zn+Pb and 353g/t silver;

OPDH-177
4.55m at 36.9 per cent Zn+Pb and 138g/t silver, including 3.4m at 48.2% per cent Zn+Pb and 177g/t silver; and

OPDH-187
3.6m at 15.5 per cent Zn+Pb and 26g/t silver, including 2.45m at 20.5 per cent Zn+Pb and 34g/t silver.

“These high-grade, massive sulphide drill hits from the sparsely drilled Central Zone confirm the area’s potential to significantly increase Oposura’s resource base,” Azure Minerals managing director Tony Rovira told The Resources Roadhouse.

“They continue to build on the very positive results from the Oposura Scoping Study and confirm potential to extend the mine life and further improve the already impressive project economics.

“Additionally, the continued success of the resource infill drilling program confirms our strong confidence in the width, grade and internal continuity of the East Zone mineralisation.

“The results represent the opportunity for us to upgrade most of the East Zone Mineral Resource to Indicated status and, thereby, further de-risk the proposed Oposura mining operations.

“Of note is the confirmation of very high-grade, zinc-rich mineralisation in the western part of the East Zone which extends into the Central Zone.

“We are continuing to evaluate the potential of this area.”

Elsewhere on the Mexico peninsula, approximately 50km south of the USA border, Azure has the Alacrán project, covering 54 square kilometres of prospective exploration ground in the middle of the Laramide Copper Province, North America’s most prolific copper-producing district extending from northern Mexico into the southern United States.

Azure Minerals earned 100 per cent interest in the Alacrán project in 2016 from Minera Teck S.A. de C.V., a 100 per cent-owned subsidiary of Canada’s largest diversified resource company, Teck Resources Limited.

Testament to the potential of the project sees Teck currently earning back into Alacrán and taking on the role of project operator.

Teck completing the first two years of a total four-year program at Alacrán during 2017 and 2018.

This comprised the first Option, which entitles Teck to earn back a 51 per cent share of the project by sole-funding US$10 million of exploration expenditure and making cash payments to Azure totalling US$500,000.

Once it achieves 51 per cent, Teck may exercise the second Option to further increase its interest to 65 per cent by sole funding an additional US$5 million over a further two years and making additional cash payments to Azure of US$1.5 million.

In this case, Azure will retain a contributing 35 per cent interest in the Alacrán project while the project’s previous owners – pre-Teck – Grupo Mexico will retain a 2 per cent NSR royalty.

Teck’s most recent program comprised geological, geochemical and geophysical surveys, followed by a Phase 2 diamond drilling campaign.

Sixteen holes targeted the Cerro Alacrán prospect chasing porphyry-style copper mineralisation beneath a blanket of copper oxides and chalcocite (an acid-soluble copper sulphide mineral) which was previously drilled by the Mexican Geological Survey in the 1970s and by Grupo Mexico in the 1990s.

The remainder of the holes targeted epithermal-style precious metals mineralisation at Cerro San Simon and Cerro Colorado.

Logging and sampling of the drill core is nearing completion and Azure anticipates final assay results from Teck when its QA/QC process of the geochemical data has been completed.

 

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

HEAD OFFICE
Level 1, 34 Colin Street
West Perth, WA 6005

Phone: +61 8 9481 2555

Email: admin@azureminerals.com.au
Web: www.azureminerals.com.au

DIRECTORS
Peter Ingram, Anthony Rovira, Wolf Martinick

 

Azure Minerals Encounters High-Grades in Oposura Central Zone

THE DRILL SERGEANT: Azure Minerals (ASX: AZS) intersected high-grade zinc, lead and silver mineralisation while drilling the Central Zone at the company’s 100 per cent-owned Oposura project, located in Sonora, Mexico.

Azure Minerals said it had encountered several mineralised intersections situated in the middle of the Central Zone, located more than 200 metres from the Oposura East Zone and West Zone resource boundaries.

The company considers the intersections to have confirmed potential to expand the current Oposura Mineral Resource into this previously under-explored area.

The recent drilling encountered high-grade, near-surface mineralisation in the middle of the Central Zone, including:

OPDH-173
12 metres at 7.7 per cent zinc plus lead (Zn+Pb) from 44m, including 4.1m at 12.5 per cent Zn+Pb; and

OPDH-178
9.5m at 18.9 per cent Zn+Pb from 23.05m, including 6.2m at 26.6 per cent Zn+Pb.

The drilling has also extended high-grade mineralisation from the East Zone into the Central Zone, retruning:

OPDH-159
4.8m at 19.3 per cent Zn+Pb and 122 grams per tonne silver from 107.05m;

OPDH-171
4.4m at 20.4 per cent Zn+Pb and 294g/t silver from 99.05m; and

OPDH-177
4.6m at 36.9 per cent Zn+Pb and 138g/t silver from 107.55m.

“These latest, high-grade, massive sulphide drill intersections from the sparsely drilled Central Zone confirm that this area has the potential to significantly increase Oposura’s resource base,” Azure Minerals managing director Tony Rovira said in the company’s announcement to the Australian Securities Exchange.

“They continue to build on the very positive results from the Oposura Scoping Study and confirm potential to extend the mine life and further improve the already impressive project economics.”

Azure completed additional drilling outside of the East Zone resource boundary which intersected wide zones (average true width of >4.0m) of massive sulphides containing high-grade zinc and lead mineralisation and very high silver grades, mostly >100g/t silver.

The company said these drill intercepts extended the mineralised system by more than 100m towards the west, into the Central Zone.

Acknowledging the positive results it achieved in the recent Scoping Study that identified that similar grade, near-surface mineralisation will be exploited by low-cost open pit and underground mining techniques, Azure declared these new Central Zone drill intersections are expected to increase the Mineral Resource, extend the current mine life of 5.3 years and have a very positive impact on the overall Project economics.

 

Website: www.azureminerals.com.au

 

Azure Minerals Very Happy with Oposura Scoping Study Results

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.”

 

Website: www.azureminerals.com.au

 

Azure Minerals Reports Initial Oposura Resource

THE DRILL SERGEANT: Azure Minerals (ASX: AZS) reported an initial Mineral Resource estimate for the company’s 100 per cent-owned Oposura zinc-lead-silver project in Sonora, Mexico.

Azure Minerals declared the Mineral Resource to be based upon 173 diamond drill holes (comprising 16 historical holes drilled by Grupo Minero Puma SA de CV and 157 holes drilled by Azure) and has been estimated and classified as Indicated and Inferred Mineral Resources in accordance with the guidelines of the JORC Code 2012.

The initial Mineral Resource estimate has come in at 2.9 million tonnes at 5 per cent zinc and 2.8 per cent lead for contained metal of 146,000 tonnes of zinc, 82,000 tonnes of lead and 1.6 million ounces of silver.

The company highlighted that 75 per cent of the contained metal is classified in the Indicated Mineral Resource category, saying this provides confidence in the continuity of grade and widths of the mineralisation.

“This initial Oposura Mineral Resource is a very positive outcome for the company’s development and production strategy,” Azure Minerals managing director Tony Rovira said in the company’s announcement to the Australian Securities Exchange.

“Containing over 220,000 tonnes of zinc and lead and 1.6 million ounces of silver in near-surface, high-grade mineralised zones, Oposura is presenting a strong case for mine development.

“Open pit and underground mine planning and scheduling are now underway.

“The schedules will be used to optimise the proposed plant throughput rate and finalise the capital and operating cost estimates.

“Further information on the results of these studies will become available during the third quarter of 2018.

“Since acquiring Oposura less than a year ago, the company has significantly advanced and de-risked the project.

“Potential risks that have been positively addressed include the Mineral Resource, metallurgical performance and process route, concentrate marketing and transport, environmental baseline studies and access to infrastructure.”

Azure believes the Mineral Resource shows potential for future expansion as the mineralisation remains open in several directions with the most obvious area for increase being the Central Zone, a 500m-wide zone situated between the East and West Zones.

This area has been only lightly tested by historical drilling and the mineralised horizon is present in several drill holes.

Additional upside potential is also present to the north of the Mineral Resource.

The company has further drilling planned for 2018 to upgrade the classification and expand this initial Mineral Resource, and to explore the wider property.

 

Website: www.azureminerals.com.au

 

Azure Minerals Encounters High-Grade Gold and Cobalt at Sara Alicia

THE DRILL SERGEANT: Azure Minerals (ASX: AZS) has encountered additional high-grade gold and cobalt mineralisation during follow-up diamond drilling on the company’s 100 per cent-owned Sara Alicia project, located in Sonora State, Mexico.

Azure Minerals completed the Stage 2 drilling campaign, comprising 13 holes for 1126.9 metres, which had been designed to test for extensions to the high-grade gold and cobalt mineralisation identified by the company’s 2017 maiden drilling program.

This earlier program intersected up to 26.2m at 9.5g/t gold and 1.26 per cent cobalt.

Mineralised drill intersections from the current program include:

GOLD

DSA-07
3.75 metres at 8.08 grams per tonne gold from 11.8m;

DSA-08
5.9m at 5.5g/t gold from 40.9m;

DSA-14
3.65m at 8.41g/t gold from 0.0m and 19.6m at 8.65g/t gold from 10.65m; and

DSA-15
8.8m at 6.2g/t gold from 6.1m.

COBALT

DSA-14
3.65m at 1.191 per cent cobalt from 0.0m and 24.95m at 0.312 per cent cobalt from 9.15m;

DSA-15
9.5m at 0.481 per cent cobalt from 3.8m; and

DSA-16
16.2m at 0.326 per cent cobalt from 9.15m.

Azure Minerals explained that hole DSA-14 unexpectedly drilled into a mining void, indicating the old mine workings may be more extensive than recorded in the historical data.

The DSA-14 intersection of 19.6m at 8.65g/t gold included a 1.9m mining void from 22.75m to 24.65m downhole.

Drill core samples taken from immediately above and below the void returned high-grade mineralisation of 19.95g/t gold and 0.907 per cent cobalt and 19g/t gold and 1.065 per cent respectively, which the company interpreted to suggest that higher grade material may have been exploited by historical miners.

“The high-grade cobalt mineralisation is hosted within a shoot of massive and semi-massive sulphides that outcrops near the top of the Sara Alicia hill and plunges at a shallow angle towards the northwest,” Azure Minerals said in its ASX announcement.

“This sulphide-rich shoot also contains high-grade gold mineralisation, while drilling has confirmed that gold is widespread in the rocks of the surrounding skarn system.

“The massive and semi-massive sulphides forming the mineralised shoot provide the company with the opportunity to explore for extensions of the gold and cobalt mineralisation by utilising geophysical techniques.

“Azure is planning an Induced Polarisation (IP) survey to trace the subsurface dimensions and orientations of the mineralised zone.”

 

Website: www.azureminerals.com.au