As a combination of future facing metals there is nothing to beat nickel and copper, and it’s that mix in the same discovery which has helped the share price of Azure Minerals (ASX: AZS) rise by 66% over the past week.
More importantly, the latest drilling news from the company’s Andover nickel and copper project near Karratha on Western Australia’s northwest coast points to Azure elevating Andover from exploration prospect to development project sooner rather than later.
More work is required, and Azure management cannot yet talk confidently about mine plans but there is enough evidence from past and present site work to predict that Andover will become a mine with the first step in that direction being a maiden mineral resource estimate.
This week’s news from Andover includes thick drill intersections of up to 46.2 metres of mineralised material from a depth of 528m and while assays have been delayed for up to 10 weeks because of overloaded laboratories, scans in the field of the drill core showed high grades of nickel and copper.
Historic drilling conducted by the previous operator at Andover, the high-profile prospector, Mark Creasy, included assays of up to 2.62% nickel and 0.65% copper over 7m from 43m.
The latest drill core from Andover has been tested using a portable x-ray fluorescence (XRF) device which provides reasonably accurate readings, just not accurate enough to meet stock exchange reporting rules.
Former nickel discoverer back in the game
For Azure managing director Tony Rovira, the 22 new drill holes in what’s called the VC-07 nickel-copper deposit at Andover more than justify last year’s decision to pull back from work chasing silver in Mexico to the scene of his greatest success – the Cosmos nickel discovery which he made when working with Kerry Harmanis at Jubilee Mines.
Older investors might remember Cosmos because not only did it win Mr Rovira prospector of the year award, but it turned Jubilee into a prime takeover target which eventually became a bidding duel between BHP (ASX: BHP) and Xstrata (now Glencore).
Xstrata won the race for Jubilee in 2007, at a time when nickel was trading at close to US$50,000 a tonne (US$22 a pound), by paying a whopping $3.1 billion, leaving BHP to wonder what might have been as it tried to grow its nickel business.
History is repeating at BHP with nickel once again a prime target of the big miner as it seeks to trim its exposure to fossil fuels and develop a portfolio of future facing metals, especially nickel and copper.
Someone at BHP will be keeping an eye on Andover, not simply because of its expanding footprint but also because the people behind Azure have a track record of discovery and mine development.
Mr Rovira, despite his 14-year focus on Mexican silver, is back working in a commodity which made his name, while Mr Creasy is one of the world’s most respected prospectors with a nose for nickel, copper and gold.
The area around Andover has been the subject of past copper exploration with evidence of shallow pits dug by an earlier generation of prospectors chasing mineralisation similar to that found at the mothballed Radio Hill nickel mine, the Carlow Castle gold-copper-cobalt deposit and the big-but-undeveloped Sherlock Bay nickel project.
Azure’s 70sq km tenement covers the Andover mafic intrusive, a multi-layered structure which Mr Rovira said has geological similarities to Fraser Range in the south of WA where Mr Creasy has also been a major player, and the Julimar platinum group metals (and nickel) discovery on the outskirts of Perth.
Taken as a complete package, there are six reasons for investors to open a file on Azure even though it has already run from $0.20 to $0.37 over the past week with the latest sales valuing the stock at un untaxing $122 million.
Those reasons are: the thickness of the latest drill success, with assays pending; he XRF indications of high-grade nickel and copper; historic high grades reported by Mr Creasy’s drilling; growing interest in nickel and copper as future facing metals; Mr Rovira’s track record dating back to the Cosmos discovery, and his comparison of Andover with other WA base metal deposits.
Another factor is that Mr Creasy appears to have the same level of confidence in Mr Rovira and Azure that he showed with his Nova-Bollinger nickel discovery in the Fraser Range, which has been instrumental in the success of IGO Ltd (ASX: IGO), the old Independence Group.
Until last year, the Andover project which is close to all the infrastructure services required to develop a mine, was locked inside Creasy Group, just one of a pile of prospects assembled over the past 30 years by his work in the WA outback.
Previous attempts to pry the asset from his fingers failed, with Mr Rovira’s track record at Cosmos earning him the right to strike a deal with Mr Creasy and the ability to re-focus away from Mexico where tough COVID-19 rules have inhibited exploration activity.
In July last year Azure and Creasy Group agreed to a transaction which saw Azure get a 60% stake in Andover with Creasy retaining 40%, plus deals covering the nearby Turner River gold project and two other gold projects.
In return for the tenement package Azure issued Creasy 40 million shares, representing a 19.1% stake, a holding which has since been watered down to 15%, leaving German investment fund Deutsche Balaton on top of the share register with 18.3% and the big Canadian miner Teck Resources with 6.8%.
Work at Andover, which currently involves three diamond drilling rigs, has outlined a number of targets with the VC-07 East discovery top of the list and source of the latest thick drill intersections. Further along strike, the VC-07 West area has received limited drilling.
Mr Rovira said the latest work had significantly increased the size and scale of VC-O7 East.
“Importantly, recent drilling has returned multiple good-looking nickel-copper sulphide intersections in the upper part of the deposit, bringing the nickel-copper mineralisation within 50m of the surface,” he said.
“In addition to this near-surface mineralisation, drilling continues to expand the deposit down-dip and along strike to the west with the mineralised system remaining open in those directions.”
It’s relatively early days at Andover, but it is certainly a discovery worth following.