PERTH (miningweekly.com) – Despite having a busy exploration schedule at its Mexico projects in 2015, ASX-listed junior Azure Minerals would have no need to tap capital markets, MD Tony Rovira said this week.

Speaking to Mining Weekly Online, Rovira noted that a March share purchase plan had resulted in about A$2.24-million in funding, which would ensure that Azure was cashed-up to conduct its 2015 exploration work.

Some $1-million would be spent at the Alacrán copper project, which Azure acquired from Canada’s Teck Resources earlier this year.

ASX-listed Azure would be required to spend $5-million in exploration over a four-year period, to gain full ownership of the Alacrán project, as well as issuing 500 000 of its own shares to Teck.

However, Rovira pointed out that Teck had been so enamoured of the project that the company had maintained the right to earn back a 65% interest in the project by spending $15-million, if a viable resource was found. This was despite the Canadian company’s decision to withdraw entirely from Mexico.

“If in our exploration we find something that is unattractive to Teck, we still retain 100% ownership of a deposit that would likely be of reasonable size, but too small for Teck. If, however, we find something larger that would excite Teck, we will still retain a 35% shareholding in a large project, so either way, we win,” Rovira said.

Mapping and sampling work was currently being undertaken at Alacrán, and Rovira noted that drilling at the project area was planned for later this year.

Meanwhile, Azure’s focus was also on its flagship project Promontoria, where mining giant Rio Tinto had agreed to spend up to $45-million for a majority stake in the project.

In the August agreement, Rio subsidiary Kennecott Exploration agreed to spend $2-million on exploration over the next 12 months, including airborne and ground geophysical surveys and sampling covering about 10 000 ha of the project area.

At the end of the 12-month period, Kennecott could elect to continue its exploration for a further five years, spending a total of $20-million on exploration to earn a 51% stake in the project area.

Upon earning a majority stake in the project, Kennecott could elect to earn a further 29% shareholding in the Promontoria project by spending a further $25-million within a six-year period, taking its total earn-in expenditure in the project to $45-million.

“This is a big spend, and Kennecott obviously feels that its worth it,” Rovira told Mining Weekly Online.

“Rio is not only a technically excellent miner and explorer, but they will be doing work on Promontoria that Azure could never afford, so this is a huge benefit to us.

“If Rio is successful and they find themselves a world-class copper deposit, then we will have a piece of that, which is fantastic. If they explore for several years and don’t find a tier-one asset, they will undoubtedly find smaller deposits along the way, and we will have the benefit of that exploration,” Rovira added.