Rio’s Kennecott abandons Mexico JV with junior Azure

PERTH (miningweekly.com) – The share price of junior Azure Minerals tumbled by 17% on Friday after a subsidiary of Rio Tinto abandoned a potential copper/gold/silver joint venture project, in Mexico.

The subsidiary, Kennecott Exploration Mexico, had been conducting exploration programmes over the Promotorio asset since early 2015, and had to date spent some A$4-million on exploration. However, it has advised Azure that it will not complete the Stage 2 earn-in commitments, which would have seen Kennecott secure a 51% shareholding in the project area.

Azure told shareholders on Friday that while the results of Kennecott’s exploration work have confirmed the prospectivity of the Promotorio asset, including the presence of a copper mineralised porphyry system, the results do not meet Rio’s requirements for further exploration work.

“We believe that the extensive exploration conducted by Kennecott over the last two years, at no cost to Azure, has significantly advanced the project and has provided an outstanding set of data on which future programmes will be based,” said Azure MD Tony Rovira.

“Kennecott’s drilling confirmed the project hosts a large, well-developed copper-mineralised porphyry system. All drilling to date has been focused in the centre of the project area, which contains the Promotorio and Cascada copper/gold/silver deposits. However, the majority of the property is covered by post-mineral volcanic rocks and remains relatively unexplored.”

Azure, which has regained full ownership of the project, has now resumed operational control of Promotorio and is currently assessing the drilling and exploration data provided by Kennecott before making plans for the next stage of exploration.

Azure shares traded at 1.9c a share on Friday, down from the previous day’s closing price of 2.3c a share.