Home' Australian Resources and Investment : September 2009 Contents 76 • SEPTEMBER 2009 • AUSTRALIAN RESOURCES & INVESTMENT
base metals - exploration update
Azure Minerals Limited (AZS) has completed its high level
evaluation of the economic potential of the Promontorio
copper-gold-silver deposit in Chihuahua, Mexico. The
evaluation has found that:
1. The Promontorio project has potential to be developed and operated
at a profit;
2. Based on typical costs for similar mining projects in Mexico, the
high grade of mineralisation provides a significant positive margin
over operating costs; and
3. There is a noticeable trend of increasing grade with depth.
The Study is an initial conceptual analysis designed to provide an
order of magnitude estimate of capital and operating costs, financial
return and overall economic viability.
The Study was based upon the existing Mineral Resources and
assumed a selective underground mining operation at approximately
150,000 tonnes per annum followed by treatment using conventional
crushing, grinding and flotation technology. This would produce a high
grade copper-gold-silver concentrate to be on-sold to a smelter capable
of processing the concentrate.
Operating revenue is estimated at US$2361 per tonne of processed
plant feed. Operating costs are estimated to be approximately US$96
per tonne of processed plant feed. Capital costs for a standard crushing,
grinding and flotation treatment plant, other surface infrastructure and
pre-mining development are estimated to be US$27.3 million, based
upon similar operations recently constructed in Mexico.
Using just the current Mineral Resource, the Study indicated an NPV
of US$17 million (using a 7% discount rate). Further cashflow modelling
was carried out based on additional mineralisation that is assumed will
be discovered through continued exploration. These results provided
further encouragement with the NPV increasing to US$59 million if
minable resources are increased to 1 million tonnes, and to US$92
million if increased to 1.5 million tonnes.
Azure s Executive Chairman, Mr Tony Rovira, said that this is an
excellent result for the Company, demonstrating that Azure is continuing
to progress towards its objective of becoming an independent minerals
producer in Mexico.
"We have now taken several significant steps towards the fulfilment
of our vision at Promontorio with the publication of the JORC compliant
resource in January, the positive metallurgical results reported in
February, and now the very encouraging results from the economic
"The Promontorio Project continues to advance, and further work
will be undertaken to evaluate additional resource potential near the
currently defined deposit, as well as in the wider Promontorio
The Study assumed processing tonnages and used preliminary
metallurgical data, and as such should be regarded with appropriate
caution. This high level Study is early stage and there is no certainty
that the estimates of the Study will be realised in the future.
The Promontorio project in Chihuahua, Mexico, is Azure s flagship
project. It contains a high grade copper-gold-silver deposit hosted in
veins of massive and semi-massive sulphides, and has outstanding
further exploration potential. Azure has completed a 42-hole drill out of
the central part of the mineralised system to produce an initial mineral
resource and a program of metallurgical testwork.
The JORC Code compliant mineral resource for the Promontorio
3 502,000 tonnes @ 4.7% Copper, 2.1 g/t Gold and 99 g/t Silver at a
1% copper cut off, containing a total of 23,400 tonnes of copper,
34,000 ounces of gold and 1.6 million ounces silver.
Full details of the resources classification and estimation
methodologies are contained in Azure s announcement released to the
ASX on 7th January 2009.
The metallurgical testwork program included head grade analysis,
mineralogical examination, comminution testing and sulphide flotation
testwork. A recommendation was made on the optimum process route to
produce a copper concentrate, and a preliminary evaluation was made of
various downstream processing options for treatment of the copper
Positive metallurgical test results were returned with first stage
flotation tests producing a "rougher" concentrate grade of 23.1%
copper, with a recovery of 99.4% of the total copper.
Further flotation testing upgraded the rougher concentrate to
produce a "cleaner" concentrate grade of 33.9% copper with a recovery
of 98.2% of the total copper.
Promontorio comprises a central group of three granted mining
concessions totalling 187 hectares and a surrounding mining concession
covering 120 sq km . Azure has entered into options to purchase 100%
ownership of the central tenements by paying to the vendors a total of
US$4.0 million staged over four years, with future ownership
unencumbered by any royalties. To date, Azure has paid US$450,000 in
vendor payments. Azure holds 100% ownership of the surrounding
For further information, please contact:
Tony Rovira, Executive Chairman, Azure Minerals Ltd
Tel: +61 8 9481 2555 or visit www.azureminerals.com.au
1 Metals prices used: Copper @ US$2.00/lb, Gold @ US$875/oz, Silver @ US$12.40/oz
no dog for Azure
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