As silver looks set to follow gold’s upward run, Azure Minerals (ASX: AZS) revealed to investors this morning it has regained 100% of the Alacran silver-gold project from Canada’s largest diversified miner Teck Resources.
The Mexico-based project hosts global resources of 32.2 million ounces of contained silver and 150,000oz gold.
“Given the recent positive sentiment for gold and silver, regaining full control of this major precious metals project is a significant milestone for the company,” Azure managing director Tony Rovira said.
Azure previous explored the asset, which led to the discovery of the Mesa de Plata deposit which has a resource of 10.5Mt at 82g/t silver for 27.4Moz of the metal.
The company’s exploration also firmed up the Loma Bonito deposit which has a resource of 5.4Mt at 0.9g/t gold and 28g/t silver for 150,000oz gold and 4.8Moz silver.
Mr Rovira said the project’s contained silver and gold resources confirm the project’s strong potential.
“I am confident that, with our very successful exploration team back on the ground, there are further silver and gold discoveries to be made at Alacran,” he added.
Back in late 2014, Azure executed an agreement to earn up to 100% Alacran from Teck by spending US$5 million on advancing the project over five years.
However, Teck retained a back-in right to claw back 51% of the project by sole funding US$10 million on exploration between 2017 and 2020.
Teck’s focus was copper and exploration for the mineral did not uncover a viable deposit.
As a result, in May this year, Azure accepted a first offer proposal to lock-in all Teck’s rights and interest in the project by issuing Teck more than 27.5 million shares – effectively bumping Teck’s stake in Azure to 19.9%.
Teck also retains a 0.5% NSR royalty over Alacran.
Silver and gold
In recent months, silver has been following gold’s lead with gold hovering at record highs and currently trading at A$2,285/oz this morning.
Since November last year, silver has risen from less than US$14/oz to more than US$18/oz – up more than 28%.
Silver has been traditionally known as poor man’s gold and interest in the metal has generally spilled over from gold during a gold bull market.
Martin Place Securities executive chairman Barry Dawes told Small Caps he “absolutely” expects silver to follow in gold’s footsteps and may even outperform the precious metal.
He added the silver run will probably last for at least two years – possibly longer.
Investors reacted positively to the news spurring Azure’s share price up 12.5% to reach $0.135 mid-morning.