On Oposura “..[T]his material is massive sulphides, and it...

On Oposura

“..[T]his 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.

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).

“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.

“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. [see the latest ann on metallurgical results

• +85% zinc recoveries achieved in producing benchmark +53% zinc concentrate
• +80% lead recoveries achieved in producing benchmark +60% lead concentrate
• No elevated levels of deleterious elements present in either concentrate
• Physical testwork for crushing, milling and abrasion indices in progress
• Optimisation metallurgical testwork is continuing as the scoping study progresses]

“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.”

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.

But not modest in returns!!!

So look at the figures again. 25k of zinc concentrate @ 53% zinc = 13,250 zinc
x $3.100 current LME spot price
= $41 million per annum less Opex.

That’s just the returns on zinc. Add to that lead and silver.
With $40mil capex and operating costs extremely low, you will pay off the capex very rapidly indeed.
“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.
http://azureminerals.com.au/wp-content/uploads/2018/02/180215-Roadhouse.pdf

OK so with all of that, surely the declaration of the maiden resource ann due anytime soon, will shift the market from slumber to wakefulness. If that doesn’t work, the scoping study midyear surely will.

This is why the flagship project for AZS is Oposura. It’s not Alacran, which could take awhile for Teck to either make a major Cu find or make a decision.

Interested in anyone who has a different view on those figures and why.