Alacrán Project (AZS 100%)
Teck Resources earning 51%
- Project Overview & History
- Mesa de Plata
- Loma Bonita
- Cerro Alacrán
- La Morita, Cerro Enmedio & Cerro San Simon
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, North America’s most prolific copper-producing district which extends 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 Mesa de Plata silver and Loma Bonita silver-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 Resources acquired the property from Grupo Mexico in 2013 and undertook limited exploration prior to optioning its rights to Azure. Teck is Canada’s largest diversified mineral resource company.
In 2015, Azure acquired the rights to 100% ownership of the project, subject to an underlying back-in right retained by Teck and a 2% Net Smelter Returns Royalty (NSR) retained by Grupo Mexico. Grupo Mexico is Mexico’s and one of the world’s largest copper producers.
In October 2016, Azure met its commitments and became 100% owner of Alacrán. In December 2016, Teck exercised its back-in right and assumed operatorship of the project. Teck may earn back a 51% interest in the project by spending US$10 million within a four year period. In addition, at its election, Teck may advance from 51% to a 65% ownership by spending an additional US$5 million (total of US$15 million) over an extra two year period (total of six years).
Mesa de Plata
Silver mineralisation at Mesa de Plata is hosted in flat-lying, silicified volcanic rocks and residual quartz (vuggy silica) which form 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 resource, 100% of which is in the Measure and Indicated categories, is estimated to contain 27.4 million ounces of silver. The near-surface High Grade Zone contains 15.5 million ounces at a grade of 275g/t Ag.
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%.
Table 1: Mesa de Plata Mineral Resource (ASX: 1 December 2016)
Located 200m to 500m east of the Mesa de Plata silver deposit lies the Loma Bonita silver-gold deposit. Drilling intersected large widths of silver and gold mineralisation in silicified volcanics and vuggy silica, commencing at or near to surface, and mineralisation remains open in all directions.
Most intercepts are situated either at or near to surface within the oxide zone, and metallurgical testwork demonstrates high gold recoveries (75% to 95%) from cyanide leaching of this material.
Table 2: Loma Bonita Mineral Resource (ASX: 21 December 2016)
At Cerro Alacrán, upside potential 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; and
- most of the drill core was assayed for copper only, and not for gold or molybdenum;
The identification of the Cerro Alacrán 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.