Minerals (ASX: AZS) has now identified that a high grade copper mineralised system continues well outside the current resource area at the Promontorio Project in Mexico, which remains open in all directions.
This boosts the case for a potentially higher resource at Promontorio and the objective to move to near term production, given the robustness of the project economics with potential cash costs of US$0.46 per pound of copper.
The first results from a step-out diamond drilling program are across a 125 metre strike length, and importantly sit outside of the current Indicated and Inferred JORC Resource of 502,000 tonnes at 4.7% copper, 2.1g/t gold and 99g/t silver.
The highlights from the first holes include:
- 2.3 metres at 2.90% copper, 6.0 grams per tonne (g/t) gold and 106g/t silver from 75.7 metres;
- 1.4 metres at 1.87% copper, 2.2g/t gold and 44g/t silver from 142.5 metres; and
- 2.7 metres at 0.83% copper, 4.0g/t gold and 40g/t silver from 151.2 metres.
The news flow will continue for Azure in the short term, with the remaining eight holes from the 2746 metre program expected in the next two to four weeks.
Boosting the credentials of the project, Azure said that the gold grades are higher than initially anticipated, and indicate a potential zonation of increasing gold tenor along strike to the north of the existing resource.
Tony Rovira, executive chairman, commented on the positive result, “Today’s results confirm the prospectivity that the Promontorio property holds for additional mineralisation with the existing system now extending northwards for a further 125 metres from the current northern resource boundary.
"This indicates that with further drilling, significant upside exists for Azure to increase the current resource."
Azure said that Promontorio is a high sulphidation epithermal deposit with extensive silicification, hydrothermal brecciation and sulphide mineralisation assemblages similar to the Tampakan deposit in the Philippines.
The Promontorio mineralisation comprises veins of massive, semi-massive and disseminated copper sulphides hosted within zones of intense silicification, with drilling often intersecting extensive gold mineralisation grading 0.5g/t – 1.0g/t gold.
Azure is aiming for near term production at Promontorio, and is targeting 1 to 2 million tonnes at 5% copper plus gold plus silver.
The company has identified that conventional crushing, grinding and flotation process would produce a very high grade concentrate.
Potential economics at the project have been identified as:
- Operating costs estimated at US$133 / tonne;
- Operating revenue estimated at US$444/tonne;
- C1 cash cost –US$0.46 / pound copper; and
- US$96 million free cash over 3 year mine life.
With strong project economics including estimated free cash flow of US$96 million over three years, with potential to add to this Azure is building a head of steam from this extremely high grade project.