Triple-A++ post thunder54.
The other thing is we await drill results from Promontorio. When those come in line with expectations, and then a rough estimate of the resource is done, the SP will have to take a lift regardless of what the market is doing.
Why do I think this is so likely?
I noted from the links to the talks that haplo supplied, that:
“Porphyry deposits are low grade, but generally very large.” Most are mined by open pit methods because the grade is too low to be economic. They are distributed closer to the surface, and the grade is usually evenly distributed.
(see at 21.10 for some of this. I tried to find again where the rest of it is, but got sick of hearing the same stuff over and over while I searched. But my ears pricked up when I first heard the usually evenly distributed part. it might be in a in the introductory part to the series but it was definitely about porphyry Cu deposits).
Now for Rio to be progressing to the drilling stage, they must be reasonably satisfied as to the size of the resource, and reasonably satisfied as to the grade with having at least one drill result in hand (which started the whole JV off). This explains Tony R's comment when I asked at the 2014 preso about Geological Chances of Success: "We think we know what's down there".
Now it took Rio a year and a half since then, with doing the mapping and IP surveys and running the ruler over the project and looking at the future Cu prices to say yes, we will proceed to the next stage. But they did.
This is why I was so excited about the drilling ann it means the orebody looks a substantial size. As thunder54 says there is always a chance that things might go wrong, but in general terms, looking at probabilities, it looks like a green light is on with Promontorio and will remain on until further notice.
To my way of thinking, Alacran is an eachway bet. No mining since 1913 and no recent exploration, even though we are 12km from Canancea the second largest Cu deposit in North America and in the same belt, with historical mines there.
Talk about an opportunity, in every respect. Even if we don't find a huge Cu/Au deposit at Alacran, we have easily-mined close to surface or at-surface, high grade precious metals to provide ongoing income until the Promontorio mine goes into production, which is years off. (And those PM discoveries keep on coming). As the latest preso says, they can be mined very rapidly because of the road access and Grupo Mexico processing infrastructure.
So why is Cook is waiting to see if Teck is going or not from Alarcran? To all intents and purposes Teck will leave us to the PMs if we don't find a large Cu discovery, their declared interest is clear in Cu. But we already have one substantial Cu deposit apparently in the bag with Rio.
Did Cook make the statement about Teck before the drill program ann about Promontorio? Is he taking the Geological Chances of Success of Promontorio into account at all with his decision? Who knows.
Is the problem that Cook wants to be certain Teck won't do a policy reversal with their interest in Cu, and suddenly want a slice of the action with the precious metals, even though we probably won't need their help to develop them? It seems like Cook has an overabundance of caution and that might reflect his existing commitments where his fund might be already overstretched on risk. I don't think it's a fair assessment of the actual risks AZS have TBH. To put it another way, to have a large enough deposit of any kind to attract back a JV partner seems like a good problem to have.
IMO it is well worth having a listen to Tony R from in this interview from July 2015 which I stumbled on in the AZS website the other day, as he sets out priorities and expectations in relation to Alacran and confirms the focus of Teck and Rio as being on Cu porphyry projects. He also mentions the security of the area, pointing out that security issues are localised, in other regions. He confirms the obvious: that we will need a partner to develop a large Cu find, so on that basis Teck would come back.
We don't know the precise detail of the JV agreement on any of these issues. But I don't see it as a huge risk to AZS future viability TBH.
Promontorio has epithermal projects (eg. Cascada and Cascada has also been identified as a possible open cut project). But in most recent part of the exploration drilled deep holes interesected porphyry which is what the big companies are interested in. (BTW correction to my previous post about complex mineralisation with Promontorio I think it's probably 3 styles of mineralisation there, not 4, but the fact remains it is complex and Tony R confirms that the drill result finding the porphyry changed the game entirely).
However you look at it, AZS shaping up very nicely. just add drill results for Promontorio to the list of ann expectations.
Yes something could go wrong here or there, but there are so many developments and opportunities in here to anyone looking at it objectively IMO.
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