Name of the Project
Oposura zinc/lead/silver project.

Location
The project is located in Sonora, Mexico.

Project Owner/s
Azure Minerals.

Project Description
A scoping study has confirmed the Oposura project as economically and technically robust and high margin. It states that the most suitable and economical mining methods comprise low unit-cost, openpit and room-and-pillar underground extraction methods.

The optimal mining rate will be about 500 000 t/y from a combination of openpit and underground mining operations, at life-of-mine (LoM) average grades of 4.6% zinc, 2.6% lead and 15.9 g/t silver, delivering an initial LoM of 5.3 years.

The processing flowsheet comprises two-stage crushing. This will be followed by ore sorting using dense-medium separation to reject waste material, and feed an upgraded product to the milling and flotation circuit at an estimated 300 000 t/y at LoM average grades of 7.5% zinc, 4.1% lead and 24.5 g/t silver.

The plant will produce about 35 000 t/y of zinc concentrate and 16 000 t/y of lead concentrate containing about 19 000 t of zinc and 10 000 t of lead. The yearly production of lead concentrate will contain an estimated 145 000 oz of silver.

Potential Job Creation
Not stated.

Net Present Value/Internal Rate of Return
The project has a pretax net present value, at an 8% discount rate, of A$112-million and an internal rate of return of 76%, with a payback of about 16 months.

Capital Expenditure
Preproduction capital is estimated at A$69.9-million, including capital contingency of 25%.

Planned Start/End Date
First production is expected in late 2020 or the first quarter of 2021.

Latest Developments
Azure Minerals has received all regulatory approvals necessary for its planned mining operation at Oposura, including openpit and underground mining permits, environmental clearances, explosives permits and surface land-use agreements.

The fully funded zinc/lead/silver project is expected to deliver early cash flow to the company, which will support the completion of the feasibility study, provide general working capital and assist in funding the development of the standalone processing plant.

Azure has secured financing for the mining and processing operation by entering into a binding commitment with major shareholder, Deutsche Balaton, to provide A$2-million through a convertible note.

This funding will enable the company to meet start-up costs and working capital requirements.

All mineralisation to be mined is classified in the indicated mineral resource category.

Key Contracts and Suppliers
CSA Global (mine design and sequencing).

On Budget and on Time?
High-grade mining and toll treatment is expected to start in the September quarter.

Contact Details for Project Information
Azure Minerals, tel +61 8 9481 2555, fax +61 8 9485 1290 or email admin@azureminerals.com.au.