Azure Minerals Has Made Steady Progress Since Early 2018

Wally Graham - Resources Roadhouse - 20-May-2018 Azure Minerals (ASX: AZS) completed further metallurgical testwork at the company’s 100 per cent-owned Oposura zinc-lead-silver project in Mexico. 

Azure Minerals reported the testwork has continued to make improvements on the already positive results it has achieved to date at Oposura. 

Locked cycle flotation tests, simulating the continuous operation of a typical sulphide flotation circuit, demonstrate that Oposura can expect increased zinc and lead recoveries with higher concentrate grades than those reported previously. 

“The successful production of clean, commercial grade concentrates at high recoveries has eliminated a possible major project risk and strongly enhances the project potential,” Azure Minerals said in its ASX announcement. 

The latest testwork comprised a locked cycle test involving a typical lead-silver and zinc sulphide flowsheet which represents an industry standard flotation circuit. 

The result of the locked cycle test was a zinc concentrate grading a high 57.2 per cent zinc with a zinc recovery of 85.6 per cent and a lead concentrate grading 61.4 per cent lead at a lead recovery of 84 per cent. 

Silver recovery to the lead concentrate was 67.1 per cent silver at a concentrate grade of 323.8 grams per tonne silver (10.4 oz/t silver). 

Both the zinc and the lead concentrate grades achieved in the locked cycle test were high above the typical industry benchmark grades of 53 per cent zinc and 60 per cent lead, thereby improving the marketability of both products. 

“Azure expects that, under standard operating parameters, recovery of zinc and lead into their respective concentrates would be greater than those achieved in the locked cycle test, should the company wish to produce concentrates at the lower benchmark quoted concentrate grades,” the company said. 


Azure Minerals Records High-Grade Lead and Zinc Hits at Oposura 

Azure Minerals provided further encouraging results from resource definition drilling of the company’s Oposura project in Mexico. 

Azure Minerals said it anticipates the initial mineral resource estimate to be ready in May and the release of a Scoping Study / Preliminary Economic Assessment expected in Q3 2018. 

The company took rock chip samples of outcropping mineralisation at the West Zone, which returned individual grades up to 43.7 per cent zinc and 29.6 per cent lead, with combined grades up to 59.6 per cent zinc and lead (Zn+Pb). 

Drilling along strike from this mineralised outcrop intersected high-grade zinc and lead sulphide mineralisation which extends at shallow depths over an area of more than 400 metres (east-west) by 400m (northsouth), with evidence of internal continuity of the horizontal mineralised zone. 

The mineralisation remains open to the north and east. 

Some of the better mineralised intersections from the West Zone include: 

2.4 metres at 15.5 per cent Zn+Pb in from 15.65m (lower zone); 

7.4m at 15.9 per cent Zn+Pb in from 60.45m (lower zone); 

2.8m at 19.0 per cent Zn+Pb in from 12.30m (newly identified upper zone); 

3.7m at 15.6 per cent Zn+Pb in from 78.25m (lower zone); 

3.5m at 13.2 per cent Zn+Pb in from 43.05m (lower zone); and 

4.6m at 15.0 per cent Zn+Pb in from 56.05m (lower zone). 

“With the mineralisation being mostly horizontal, the vertical height of the mineralised zone continues to be optimal for a simple room and pillar underground mining operation utilising industry-standard mechanised mining equipment,” Azure Minerals said in its ASX announcement. 

Azure Minerals Eyes Mine Potential at Oposura 

Azure Minerals is drilling up an initial Mineral Resource at the company’s high-grade zinc and lead Oposura project, located in the northern Mexican state of Sonora. 

Azure Minerals is no stranger to Mexico where it has the Mesa de Plata and Loma Bonita silver-gold deposits on its Alacrán project, where Teck Resources is earning a 51 per cent interest. 

The 771 hectare Oposura property is located on the same Laramide Copper Trend, that extends from Arizona to central Mexico, as the Mesa de Plata and Loma Bonita deposits.

Oposura is 150 kilometres by road northeast from Hermosillo, the capital city of Sonora where Azure has its Mexican-based exploration and administration office. 

The project contains a mineralised zone hosting massive, banded, and disseminated sulphides containing high-grade zinc, lead and silver mineralisation. 

The mineralised zone forms an extensive, relatively flat-lying horizon influenced by minor small-scale folding and faulting. 

“Put more simply, this material is massive sulphides, and it outcrops at surface under a gently sloping hill,” Azure Minerals managing director Tony Rovira told The Resources Roadhouse. 

“A large proportion of the mineralisation will be able to be extracted by open pit, but not like a standard open pit. 

“Because the deposit outcrops on the side of a hill, we will basically be taking a scallop off the side of the hill. 

“When we reach the point where the pit wall is tall enough we will go underground using a room and pillar mining method, as mineralisation is mostly horizontal.” 

For a project of its potential, Oposura has been inexplicably neglected for many years. 

Major mining companies Anaconda Copper Company and Mexican company Industrias Peñoles both conducted exploration and exploratory mining activities on the project between the 1940s to 1970s. 

This work developed over 500m of mine tunnels within the ore zone, small-scale trial stoping to provide bulk samples for metallurgical testwork, and about 100 surface and underground diamond drill holes. 

Of course, these results – although plentiful – are not up to speed in terms of JOC Code 2012 compliance, which means Azure needs to bring the project into the 21st century. 

Azure began its drilling at Oposura last year with the aim of completing a Mineral Resource estimate by April 2018. 

The resource drill-out covers known mineralisation identified by historical exploration, upon which Azure released an Exploration Target for Oposura of 2.5 to 3 million tonnes grading 10 to 12 per cent zinc plus lead (Zn+Pb). 

“We have results for over one hundred diamond holes previously drilled along with the drill logs and assay sheets, so we are confident we know what’s there already,” Rovira said. 

“We are replicating some of the drilling and that will give us confidence to utilise some of the historical drill results as well. 

“The current drilling entails twinning of some of the historic holes, with others being drilled just nearby, or in between earlier holes. 

“So far, every hole we have drilled has replicated the historical results. 

“We are confident the historical resource will be updated to JORC 2012 standard and will be similar to what was produced historically. 

“We see ourselves as having a deposit there that just needs to be defined and then published – and that is exactly what we intend doing.

By the end of January 2018, Azure had completed 110 diamond drill holes for approximately 7,200m of the planned resource drill-out program. 

Interestingly, most of the holes drilled along the eastern part of the deposit intersected fresh, unoxidized, massive sulphides within 10 metres of surface. 

This was consistent with previous sampling of near surface mineralisation in the historical underground workings and is a good indication for an initial open pit mining operation in this area. 

Most recent assay results have shown further near-surface, high-grade zinc and lead mineralisation intersected in the East Zone, including: 

2 metres at 42.6 per cent Zn+Pb from 37.5m; 
2.9m at 16.1 per cent Zn+Pb from 18.9m; 

2.1m at 15.4 per cent Zn+Pb from 27.9m; and 

2.2m at 14.2 per cent Zn+Pb from 15.2m. 

The result from OPDH-036 extended the high-grade mineralisation south of a previously reported hole: 

16.6m at 22 per cent Zn+Pb, including 9.3m at 36.9 per cent Zn+Pb. 

Mineralisation was extended 170m to the west of surface outcrop by drill hole 

2.65m at 10.4 per cent Zn+Pb 

The mineralised horizon remains open in that direction. 

“We currently have three rigs drilling at Oposura and should have the resource drill-out completed towards the end of February,” Rovira said. 

“We will be working on the resource estimation during February and March, which means by April, we should be able to publish our initial Minerals Resource. 

“We expect it will be in line with the exploration target we previously released.” 

Once the current resource drill-out program is complete, Azure will continue drilling to expand the area of currently defined mineralisation and, ultimately, the resource, and to explore for repetitions and extensions of the mineralised zones. 

Preliminary metallurgical testwork at Oposura produced positive results highlighting excellent recoveries of commercial-grade concentrates of lead-silver and zinc concentrates. 

Flotation tests demonstrated consistent zinc recoveries exceeding 70 per cent producing zinc concentrates grading 55 per cent zinc, and lead recoveries exceeding 80 per cent with lead-silver concentrates grading more than 55 per cent lead and greater than 300 grams per tonne silver. 

“As this is a flat-lying sulphide deposit we envisage it being a very simple mining operation. 

“From a processing point of view – being sulphides – it floats like a dream, producing a very high-grade lead-silver concentrate and another, high-grade zinc concentrate, with very good recoveries. 

“It is a crushing, grinding, flotation produced concentrate with no contaminants and we are already getting interest from various metal smelters who would like to put their foot on the product.” 

Azure believes Oposura is a feasible development option for a company of its size. 

Because of the size of the project, Azure is eyeing development options most likely be processing in the order of 300 to 400 thousand tonnes per annum to produce perhaps 25,000 to 30,000 tonnes of metal in separate high-grade zinc and lead concentrates per annum. 

“At about 1,000 tonnes per day, it is modest in size, but it is achievable for a company of our size to build a mine and processing plant that will facilitate that,” Rovira said. 

The company’s confidence reflects what is happening elsewhere in the district with other companies with similar deposits and grades completing studies have determined capital costs of around $30 to $40 million. 

“We see something around $30 to $40 million capex for the project being what a company our size can do without selling the farm to get it, Rovira continued. 

“The other benefit of having such a relatively compact deposit is that it doesn’t require a long lead-time feasibility study to bring it to fruition. 

“We see a scoping study being completed around the middle of 2018, and then going directly to a feasibility study to be ready by the middle of 2019 and a decision to mine shortly thereafter. 

“We consider the Oposura project as being the ideal opportunity for us to be able to transition from junior explorer to becoming a mining company.” 

Azure Minerals Limited (ASX: AZS) 

The Short Story 
 Level 1, 34 Colin Street 
West Perth, 
WA 6005 

Phone: +61 8 9481 2555 
Email: admin@azureminerals.com.au 
Web: www.azureminerals.com.au 

Peter Ingram, Anthony Rovira, Wolf Martinick 

Wally Graham





Email: wally@resourcesroadhouse.com.au
Mobile: 0410 788 304
Address: PO Box 1272, SUBIACO WA 6904