AZS (ASX) Oposura Capex mystery solved

Originally posted by dolcevita ↑

Glossed over?

The m stands for METRIC. I think most people understood this. It's not million tonnes.

see from the PEA on p.219.
"A 1,250 mtpd (metric tonne per day) mill will be constructed in the first year of project development. A diagram showing the mill components is given in Figure 17-2."

So 1,250 metric tonnes per day is not wildly outside the ballpark of a 500k metric tonnes per year throughput.

Bear in mind that the current resource target of 250-300k of Zinc is only a stage in a wider exploration campaign so I'd expect that target to be revised upwards, in line with the diagrams that show angled resource on the western side, and open on the eastern.

So the comparable capex is relevant and the mills could be expected to be of similar capacity.

Now we are in the process of confirming our mineral resource.
Ours is significantly smaller than San Felipe we can agree on that,
BUT the costs of extraction are significantly lower.

The orders of magnitude going either way are what is critical to valuations here.

Worry all you like about any discontinuities BUT if you ignore the fact that the mining methods of open cut and room and pillar are extremely cheap (was that about 10% of the deep mining costs of San Felipe?) then the issue disappears somewhat and the equation changes very much in the positive direction.

So getting back to the PEA on Oposura which we know cannot be used as this is JORC on the ASX, it seems reasonable to speculate that there is a significant chance we are going to hit our target of 250-300k tonnes. Because we are twinning the existing holes used for the PEA. And we have cheap mining techniques. And we have apparently simple metallurgy.

This is reasonable speculation and I think it is compelling if you stand back a bit and re-evaluate assumptions.

TBH I would like AZS to go full steam ahead on Oposura as we could be waiting some time for Alacran/Teck to resolve.

I believe that's precisely why AZS selected Oposura from the other 58 or so opportunities they had on offer after Teck announced they would exercise their back-in right. Also there are ways of raising money apart from share dilution. One way is a presale. There are others.

Expand

Spot on dolc, Oposura with relatively lowish opex and capex, could well provide encouraging returns to backers, while generating cash flow to salt away towards Alacan developments.
A presale would thicken the icing. And I like the opportunity in learning from a small start, and a chance set a footprint in Mexican Mining. I see ducks on the horizon !!!!

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