Some observations from today's meeting.
The level of confidence evinced in Opasura was very high.
Following the Chairman's address and formal section TR gave a presentation which began Opasura WILL become a mine! Only time will tell if he is right.
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Chairman's address:
Short emphasizing Opasura and high quality Scoping study done to PFS levels in part. [ASX/ASIC would have rapped them over the knuckles if the NPV/IRR were not consistent with their guidelines].
In view of Rio and BHP discoveries in Australia the chairman (IMO) felt that Teck's unilateral decision to double their 2018 drill program from 4.5 to some 9 Kms may indicate the beginnings of significant exploration success on the Cu targets at Alacran. This came up in the first address and was commented on again later.
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Formal section
All passed.
Items 4-6
A rational for granting Options was given to show the context relative to salaries - Always a contentious issues so won't say any more.
The former Remuneration policy of giving cash bonuses has been "abolished"
[ Other comments:
In addition to board options some senior management in OZ and Mexico are also eligible for staff options.
TR said he has not converted any performance options received from AZS ..... Yet
TR does see some of what is posted on AZS's Hot Copper forum's and I see the above as perhaps some response - my speculation.]
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Presentation - see attached announcement.
The Title: ON THE PATHWAY TO PRODUCTION is the message AZS wants to deliver.
TR fielded questions/comments throughout the presentation that took around an hour.
One subtle change few would notice is a revised disclaimer that now includes forward looking statements.
Drone view over Opasura.
Highlights near surface open pit potential with unoxidised mineralisation.
The change in Zn price since the figure used in the SS was acknowledged but neither TR or Glen Jardine considered it to be "fatal" - my word.
The Capex of $US 50M is for a "Rolls Royce" plant and operations so there is room for improvement.
Previous operators Anaconda Copper and Penoles (1930s - 80s) left paper records and a jigsaw pile of drill core. Due diligence of this previous drilling, logging, and assay work has shown it to be quite reliable.
Anecdotally AZS's involvement at Opasura was quite interesting to me. An entrepreneurial family (Real Estate + Developers) had a member who ventured into exploration/mining and gathered the Opasura land package together. They began a drill program about the time AZS became involved then a "royalty" to Puma... This style of land tenure is not uncommon in Mexico.
Mexican Taxation 30% + 7.5% for 37.5%. WA and NT operations 47% and 58% respectively were mentioned to give some idea of comparison [I do not know how these figures were derived]
The preliminary metallurgy has shown a high quality, much sought after Zn/Pb/Ag product.
Lead shipment (sulphide) is planned in bulka bags inside sealed containers.
Hydrology studies show adequate and available access to water.
Tailings disposal using a dry stack method will be implemented. Tailing dam failures have led to major social and environmental disasters so this approach should minimise if not remove such issues.
Finance?
Discussions ongoing with interest shown.
$50M - some 50% Debt
rest by equity or combined with off take agreement.
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Alacran
Sounds like Teck are drilling in the Cerro Alacran area previously explored by Grupo Mexico (from memory 200Mt or 0.4% Cu). Teck recognize that AZS has reporting requirements but are not likely to pass on results of exploration until sometime in Q1 2019. Analytical process, Teck's QAQC, Xmas NY period all serve to make reporting slow.
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Oso Negro
I can relate to TR's tale of AZS's interest in this area. Some of the field crew were doing reconnaissance work and got chatting with some local farmers who waved their hands in the general direction of old workings. The diligent field crew trekked over the hills and took some samples that showed some promise. Following up this type of thing is part of working in Mexico. Most of the time there is a small show with little potential. In this case further work is warranted though definitely low key and budget.
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Sara Alicia
Some interest. TR acknowledged it was a "bit of a distraction" or words to that effect.
The land situation is apparently quite complex - Cartels mentioned.....
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TR is looking forward to progressing Opasura to production. Something he experienced at Cosmos in WA. He still has the "hunger" for more
My paraphrasings.....
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Got to head out now so will look back over this later .......
