Azure Minerals Limited (AZS) – Speculative HoldPrice:12 Month...

Azure Minerals Limited (AZS) – Speculative Hold
Price:
12 Month Target:
$0.08
$0.15
Project Overview
Azure Minerals is a junior base metals company exploring for copper, silverlead-
zinc and molybdenum in Mexico. Azure Minerals has 14 exploration
projects in the Mexican state of Sonora which are prospective for epithermal
copper-gold, porphyry style copper, molybdenum and associated high grade
silver-lead-zinc deposits for which Mexico is renowned.
Drilling of six holes into the Pozo de Nacho copper-molybdenum prospect
returned very high interval grades (1m @ 0.75% MoS2) as well as significant
widths of high grade molybdenum mineralisation, exemplified by hole PDNRC-
02A with 198.1m @ 0.06% Mo. All holes drilled into the prospect thus far
have intersected copper, molybdenum or tungsten mineralisation and a
geophysical anomaly interpreted to represent a sulphide-bearing granite
porphyry remains untested as yet.
Drilling of the Potreritos prospect has returned 26m @ 0.55% Cu and 4.4g/t
Ag from hole POT-DD-001, and 28.5m @ 0.45% Cu and 6.3g/t Ag from hole
POT-DD-002. This mineralisation appears to be associated with the breccia
pipe model Azure has targeted and is probably of economic grades, however it
is unclear yet whether the company will follow this up with the aim of defining
a resource.
Drilling has moved on to the high grade lead-silver occurrences at Jaguey,
where we’d expect results similar to the previous 0.2m @ 3,180 g/t Ag and
19% lead.
Opinion
Azure has released the first results from its 2007 drilling campaign, with broad moderate grade copper intersected,
though they have minimal impact on the fundamentals of the molybdenum picture. Pozo de Nacho is, according to the
company, to be drilled this half of the year though results aren’t going to be in the hand very quickly on current
performance.
The opportunity of a large porphyry moly deposit at Pozo de Nacho is quite good. You don’t often get a ~200m
intercept of potentially economic molybdenum mineralization without a sizeable body of the stuff nearby. However,
there is always the risk that a hole has been drilled down the only good bit which could ever be found. This seems
unlikely. The key is time, and patience.
For comparison, we refer to similar projects owned by other junior explorers looking for molybdenum porphyries
such as D’Aguilar Resources’ Anduramba project, S.E. Queensland. D’Aguilar has seen a significant amount of
traction with their Anduramba moly resource which is a small 18 million tonnes at 0.088% Mo. Pozo de Nacho,
containing 196m at 0.06% is quite capable of converting to something of the size range of Anduramba which is a
A$150 million asset within ten to twenty drill holes. This could take as little as 10 months, so we would not totally
write off Azure’s prospects yet.
Indeed, we can imagine a scenario where you have a dozen such holes, and you start thinking in words and ideas
which sound like “Molymines” and “Spinifex Ridge” and so on. It is a lot of blue sky, a lot of Azure indeed…but
patience is a virtue not given to all. For those with enough patience, the current share price is of no concern, because
the idea still holds. If you lack the patience and want the thrill, investing in Molymines itself lets you have your cake
and eat it, though it has mostly been eaten