(Azure 100% with Minera Teck S.A. de C.V., a subsidiary of Teck Resources Limited, currently earning back initially a 51% interest by spending US$10 million within the next four years)
- – Project Overview
- – Exploration Activities
- – Mesa de Plata
- – Loma Bonita
- – Cerro Alacrán
- – La Morita, Cerro Enmedio & Cerro San Simon
- – Gallery
In line with its strategy to continue to grow the asset base of the company, in early 2015 Azure secured the right to acquire 100% of the Alacrán Project from Minera Teck S.A. de C.V. (“Teck”), a Mexican subsidiary of Teck Resources Limited, subject to certain back-in rights. Teck has exercised its right to earn back-in to the Project, initially for a 51% interest by spending US$10 million by 2020.
Azure identified that Alacrán contains excellent potential to host significant precious and base metal deposits. This belief has been supported with the Company discovering the Mesa de Plata silver deposit (26Moz Mineral Resource) and the Loma Bonita gold deposit within the first 18 months of commencing exploration.
Project Overview & History
Alacrán is located in northern Mexico approximately 50km south of the USA border. The property covers 54km2 of highly prospective exploration ground in the middle of the Laramide Copper Province. This is one of North America’s most prolific copper-producing districts, extending from northern Mexico into the southern United States.
Alacrán lies close to several large operating copper mines, including being only 12km from the world class, giant Cananea Copper Mine operated by Grupo Mexico. Interestingly, it’s within this copper-rich district that Azure discovered the adjacent Mesa de Plata silver and Loma Bonita gold deposits.
There is excellent access to and within the property, via a sealed highway from Hermosillo, capital of the State of Sonora, and existing mine roads and ranch tracks. The nearby town of Cananea has a population of over 30,000, and is a mining-friendly jurisdiction with experienced exploration and mining services, as well as railway, airport, electrical power and water infrastructure.
Commercial and artisanal mining occurred within the project area in the early 20th century, ending in 1913 due to the Mexican Revolution. However, since that time and despite being located in a major copper producing district, Alacrán has seen only limited exploration. With one exception, its potential for hosting large porphyry copper deposits and high grade precious and base metal deposits remained largely untested by modern exploration techniques until the arrival of Azure in early 2015.
Prior to Azure, the only modern exploration of significance was by the Mexican Geological Survey and Grupo Mexico who carried out separate diamond drilling programs at Cerro Alacrán. Drilling was contained within an area of approximately 50 hectares and outlined a large body of near-surface, copper oxide and chalcocite (copper sulphide) mineralisation. The size, grade and the extent of this mineralised body is yet to be defined as a mineral resource to JORC standards.
Teck acquired the property from Grupo Mexico in 2013 and undertook limited exploration prior to optioning its rights to Azure.
Azure acquired the rights to the project through its fully owned Mexican subsidiary Minera Piedra Azul S.A. de C.V. Azure has signed an Agreement with Teck to acquire 100% of the property, subject to an underlying back-in right retained by Teck and a 2% Net Smelter Returns Royalty (NSR) retained by Grupo Mexico. Teck is Canada’s largest diversified mineral resource company. Grupo Mexico is Mexico’s, and one of the world’s largest copper producers.[/one-half]
Alacrán has potential for hosting various styles of precious and base metal mineralisation, including epithermal gold and silver, breccia-hosted precious and base metals, intrusive-related massive sulphides, and porphyry-related copper-gold-molybdenum. Azure’s focus is near-surface, high grade, precious and base metal mineralisation, especially copper, gold and silver.
Exploration focused in the western half of the property where Azure identified surface mineralisation and historical mine workings. The Company’s activities included acquisition of historical technical data, geological mapping, surface and underground mine sampling, ground geophysics, airborne LIDAR and photographic surveys, and diamond core and Reverse Circulation (“RC”) drilling.
This exploration resulted in the discovery of the Mesa de Plata silver and Loma Bonita gold deposits and the identification of numerous other prospects including Cerro San Simon, Cerro Enmedio, La Morita and Palo Seco.
Alacrán plan showing locations of prospects
The Company’s studies indicate that the alteration and mineralisation styles at Mesa de Plata and in nearby areas are typical of other lithocap-hosted, epithermal gold and silver deposits in Mexico and elsewhere in Latin America. This supports Azure’s belief that a large mineralising system is present here with potential to host significant precious metal deposits.
Mesa de Plata
Azure’s exploration of western Alacrán was immediately successful with the discovery and delineation of the Mesa de Plata silver deposit.
Silver mineralisation at Mesa de Plata is hosted in flat-lying, silicified volcanic rocks and residual quartz (vuggy silica) which crop out extensively forming a prominent ridge. Drilling confirmed that mineralisation starts at surface with true thicknesses up to 60m, and extends throughout the deposit with excellent internal continuity of mineralisation.
The central zone of high grade silver mineralisation, which averages greater than 200g/t Ag over a vertical thickness of approximately 20-40m, extends over an area of 400m long x 100-150m wide. This is surrounded by a larger zone of moderate grade silver mineralisation (averaging 40-80g/t Ag) up to 60m thick, extending over an area of about 900m long x 150-200m wide.
The Company conducted a resource drill-out program comprising three stages of drilling (two RC and one diamond core), consisting of 61 RC and five diamond holes for a total of 6,350.7m. Completion of the drill program enabled the calculation of a JORC-compliant Mineral Resource.
The resource, 100% of which is in the Indicated category, is estimated to contain 25.9 million ounces of silver, with 15.3 million ounces hosted within the near-surface High Grade Zone.
Table 1: Mesa de Plata JORC Code Indicated Mineral Resource
|Estimation Zone||Tonnes (millions)||Silver Grade (AG g/t)||Silver Metal (million troy ounces)|
Following completion of the Mineral Resource, Azure initiated studies into the potential development of a mining and processing operation to exploit the Mesa de Plata silver deposit.
Metallurgical testwork demonstrated that the silver mineralisation is amenable to both cyanide leaching and flotation processes, with recoveries up to 70%. More advanced metallurgical studies are in progress to assess and determine the optimal processing route. Other development studies are in progress including mining, environmental and hydrological studies, together with advancing permitting, community and social aspects.
While Mesa de Plata remains a development focus for Azure, there is significant potential for further exploration success in areas proximal to Mesa de Plata, such as Loma Bonita and Puerto del Oro.
Located between 200m and 500 meters to the east of the Mesa de Plata silver deposit lies the Loma Bonita gold-silver prospect. Outcrop consists of vuggy silica and siliceous hydrothermal breccia. Azure’s reconnaissance exploration returned significant anomalous gold and silver grades from outcrop sampling throughout the 800m-1,200m long Loma Bonita Ridge.
Drilling intersected large widths of gold mineralisation commencing at or near to surface and significant gold mineralisation has now been identified over a length of 400m in a north-south direction and up to 150m east-west. No boundaries to the mineralised zone have been identified to date, with mineralisation remaining open in all directions.
Drill intercept lengths of gold mineralisation vary from 10m in the north to over 100m in the south. Most gold intercepts are situated either at or near to surface within the oxide zone, with metallurgical testwork demonstrating very high gold recoveries (75% to 95%) from cyanide leaching of this material.
To date, the only drilling at Cerro Alacrán was undertaken by the Mexican Geological Survey in the 1970’s and Grupo Mexico in the 1990’s. This work identified a large body of near-surface, supergene, leachable copper mineralisation.
The upside potential here remains largely unquantified, due to a number of factors including:
- the drilling (33 diamond core holes) only tested a relatively small area of approximately 1,000m x 500m, with all holes intersecting supergene copper mineralisation;
- the overall size, grade and the extent of the Cerro Alacrán copper oxide and chalcocite mineralisation is yet to be defined, remaining open and untested along strike and at depth;
- most of the Cerro Alacrán drilling was relatively shallow and has not tested the potential for primary, porphyry-hosted copper sulphide mineralisation beneath the near-surface supergene mineralisation;
- most of the drill core was assayed for copper only, and not for gold or molybdenum;
- a small scale IP survey carried out to the east of the Cerro Alacrán drilling in 2001 identified a strong anomaly which was not drill tested.
The identification of the Cerro Alacrán body of copper mineralisation from limited exploration in a district which hosts many large copper mines and deposits, supports Azure’s belief that Cerro Alacrán is significantly underexplored and that further exploration using modern techniques will identify more mineralisation.
The historical Palo Seco mine exploited high grade, silver-rich, polymetallic sulphide ore by underground mining. Production ceased in 1913 when mining was still in full production, due to political turmoil during the Mexican Revolution. Operations did not recommence and no modern exploration has taken place in this area until Azure’s arrival.
Azure’s exploration has comprised sampling of outcrop, the historical mine workings and the old mine dumps and a two hole RC drill program. Positive silver and zinc assays were returned, supporting historical accounts of high grade ore being produced. Azure believes there is good potential for identifying further occurrences of this style of mineralisation in and around Palo Seco.
La Morita, Cerro Enmedio & Cerro San Simon
Reconnaissance exploration conducted by Azure over the western part of the Alacrán project area focused on the La Morita prospect, identifying six separate occurrences of historical mine workings, ranging from small producing operations to exploratory diggings.
In the area around these old mine workings, extensive exposures of strongly altered rocks, gossans and vuggy silica containing copper oxide and chalcocite (copper sulphide) mineralisation are present. Geological mapping, outcrop sampling and gridded soil sampling has identified areas anomalous in gold, silver, base metals and other pathfinder elements.
An IP survey undertaken by the Company revealed strong and coherent chargeability and resistivity anomalies beneath the surface geochemical anomalies, suggesting the presence of sulphide mineralisation at depth. These targets will be tested by drilling.