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AZS azure minerals limited

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Ann: AGM Presentation corrected, page-7

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Haplo

17,212 Posts.

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03/12/19

23:19

Post #: 41779378
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Originally posted by salpetie ↑

Some comments on today's AGM

Quite a challenge to get Alacran back and have to choose between two projects. Nice in some ways but Opasura was heading towards production (perhaps) and then the market showed that Au/Ag were more in flavour than base metals - AZS interpretation of the share spike in Sept/Oct.

The team (5 geos) has had to dust off the Alacran data bases and get up to speed on Teck's work. They applied for drill permits that need at least a couple of months to process back in Oct. or so. Due the end of this month or early next. An RC rig is available with drilling pre Xmas if permits come through in time but more likely Q1 2020.

Targets as stated in announcements. MDP/LB extensions; Old workings south of Cerro Alacran etc. TR mentioned they are looking at "Mesa de Toxxic" area and further north across the valley to the north where there are fairly obvious alteration zones on Google earth (more general view with MDP for location and rough idea of "colour anomalies", also a more detail view:

The old workings south of Cerro Alacran could prove significant targets as the high levels of base metals, and intermediate level of sulphidation (??TR said something like this) hint at veins that can extend to significant depth. Best case scenario is veins such as those seen at Fresnillo where mining is at some 1200m after 500 years.

MDP - mining/quarrying will require some blasting because of the competent silica rich rocks. A strip ratio of 1.3 was mentioned from desk top studies. Material would be trucked for processing. More Mett work is needed, maybe some done but not mentioned other than indications that recoveries could improve with ?sorting (gravity). Arm waving at this stage so don't take too seriously.

LB - could be more a bulldozer and rock breaker operation as the deposit is very different geotechnically to MDP.

Grupo Mexico's infrastructure on the Alacran property is the subject of ongoing discussions. Done during Teck's tenure and apparently a surprise to AZS. Pleasant in the sense that access is improved locally. There is a potential synergy between Grupo and AZs (Cerro Alacran/MDP extensions) that may be of value. Again arm waving but something could happen.

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Opasura

Processing has begun at the Tecoripa plant as shown by photos in the announcement. AZS are not in a position to officially announce what they expect but run the numbers: Using Rounded figures: 6000 tons at approx. 25% Metal, 1500 tons with say 80% recovery 1200 tons; 60% Concentrate 800 tons; $2K per ton: $1.5M. Results of the processing will be known in Q1. If the product is saleable then mining at around 3K per month may proceed giving cash flow which will cover Opasura and non exploration expenditures elsewhere.

Some funds will likely go into drilling shallower parts of the central zone at Opasura (financing dependent). TR would like to get the resource at Opasura up to 5-6Mt where it would have a mine life of ten or so years and possibly be more attractive to another operator. Paraphrased passing ?comment.

Will need to apply for extension of mining permit. Based on area of disturbance, currently, in Mexico. May not be as difficult to obtain as in other jurisdictions.

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Deutsche Balaton good "partners". Their director on the board brings a wealth of experience.

Some contact has been made with Silvercrest Minerals who used an underground mining contractor AZS were/are considering for Opasura. Given my interest in Oso Negro and Silvercrest's nearby (to ON) Las Chispas I asked TR about the area and was a bit surprised the companies had had some contact.

Sara Alicia legal costs $4k. This aspect of legal matters in Mexico is handled by filing papers and once done they work through the system until a ruling comes out. The larger SA tenement may attract more interest from purchasers. Definitely low priority for now as is Cerro Alacran and deep porphyry drilling.

Austerity measures by the new government may change processing applications/permits ........

==============

GLTAH DYOR

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The discolouration of those areas is quite in contrast to MDP and LB. Almost similar to what we find in the copper areas like Cello Alacran. I wonder if they are mineralised with gold/copper rather than silver.

Also, it extends outside the tenement area. Perhaps another reason why AZS haven't rush there to investigate just yet.
AZS Price at posting: 12.5¢ Sentiment: Buy Disclosure: Held
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