Azure Minerals (ASX:AZS) is focused on exploring for copper at its Promontorio Project in Mexico, which notably has drawn Kennecott Exploration Company, a subsidiary of Rio Tinto (ASX:RIO) as a joint venture partner.
Kennecott will earn a 51% interest in the Promontorio Project by spending US$20 million within 6 years, and an additional 29% interest, for a total 80% interest, by spending a further US$25 million over the following 6 years.
In addition, upon formation of a 51:49 Joint Venture, Kennecott will credit Azure with an amount equal to five times Azure’s total exploration and acquisition expenditures to that date.
Azure has already spent US$10 million, so this amount will total at least $50 million, bringing the total value of the earn-in up to US$95 million.
Promontorio has a total Resource of 840,000 tonnes grading 4.1% copper equivalent at the 0.5% copper equivalent cut-off.
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Kennecott’s entry into Promontorio demonstrates its enormous potential and will enable a rapid acceleration in the current exploration and development programs.
It also allows Azure to advance its own exploration efforts around Cascada, where drilling has intercepted 153 metres at 1.5 grams per tonne gold, 114 metres at 2.4g/t gold, 36 metres at 2.9% copper and 19 metres at 6.8% copper.
Initially considered a high grade but relatively small copper-gold-silver deposit, Azure’s recent discoveries, including the Cascada deposit, mineralised hydrothermal breccias and porphyry-hosted copper mineralisation, signal that Promontorio is now of a substantial scale.
With multiple styles of precious and base metal mineralisation, Promontorio could host deposits ranging from large, bulk-tonnage resources to smaller, high grade bodies, which augurs well for a large scale, long-life mining operation.
Looking ahead catalysts for the Promontorio joint venture include results from geophysical surveys, mapping and sampling in early 2015 and diamond drilling on defined targets in mid-2015.
At Cascada, Azure’s immediate work program includes a Resource calculation in the fourth quarter of 2014.
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