In the interview below, Nicol highlights the work the company has done in its first three quarters on the property, including the release of a maiden resource estimate, which Nicol believes could be at least doubled in the next round of exploration.
Below is a transcript of our interview with Azarga Metals CEO Dusty Nicol. It has been edited for clarity and brevity.
Investing News Network: Please give our investor audience an overview of Azarga Metals and its flagship property, the Unkur project in Eastern Europe.
Azarga Metals CEO Dusty Nicol: Azarga Metals is a single-asset company focused on the Unkur copper-silver deposit in Eastern Russia. The project was discovered during the Soviet era of exploration, where it was characterized as a large, high-grade silver-copper deposit with a historical resource estimate of 65 million tonnes of mineralization.
We have been working on the project for the last year and a half and have published our maiden NI 43-101 resource estimate, which outlines 42 million tonnes of mineralization at 0.9 percent copper equivalent. The mineralization remains open in both directions and at depth, and we are confident that we will at least match or exceed the Soviet-era size and grade estimates.
The project is located 25 kilometers from the town of Chara, a major center of the trans-Baikal railway. The project itself is 7 kilometers away from the railway and 5 kilometers away from major regional power lines, providing excellent access and infrastructure.
INN: How does Russia compare to other mining jurisdictions in the world?
DN: Having worked in over 70 countries to date, I believe that Russia is an easy country to work in. The climate is quite favorable for foreign investors, and our area in Eastern Russia has been earmarked by the federal government for development. This means that in the future our project might see tax breaks and direct investment from the Far East Development Fund to help project economics. Environmental regulations in Russia are also straightforward and help hold the project up to international standards.
The only issue that we’ve had with working in Russia has been one of perception. Russia has a bad reputation that stems from deals that were conducted with oligarchs early in the post-Communist era. This is not representative of how work is conducted now. We won our mining license from the Russian government in a clear and transparent auction.
INN: Please tell us about the exploration activities you have conducted on the Unkur project to date. Are there any findings you would like to highlight?
DN: I would like to highlight how quickly we published our maiden resource estimate, which was released in April of this year. The main thing we have learned from it is that compared to the Soviet-era results, we are seeing thicker mineralization in the high grade, which leads us to believe that the historical resource estimates were probably conservative in terms of the size and grade of the deposit.
The most interesting result from our first exploration season was the notion that the thickness and grade of the mineralization was increasing towards the north of the property, where there appears to be a bend in the direction of mineralizing structure. We have thus identified this as a drilling target for our next phase of exploration.
We are confident that the next round of drilling will significantly increase the size of the deposit, as we are beginning to understand the geology that controls the higher distribution in the deposit. The next round of drilling should also improve the overall grade of the deposit.
When you superimpose our maiden 42-million-tonne resource over the footprints of indicative geophysics, it is clear that we have only just begun our exploration on the project. I am confident that the next round of exploration will at least double the size of the resource.
INN: What is next for the Unkur project and how does that fit into Azarga Metals’ long-term plans?
DN: Azarga’s long-term plans are to develop the Unkur property. Additionally, we are open to further acquisition opportunities in the area, maintaining our focus on copper-silver exploration in Russia.
The next steps for the Unkur project are to continue exploration and advance the project through a preliminary economic assessment (PEA). With the next phase of work, we plan to build out a sizeable resource that will act as the foundation for a NI 43-101-compliant PEA.
Alongside this work, we are also exploring one of the interesting aspects of our maiden resource, which shows that much of the mineralization is near surface. We are also looking into the possibility of a viable smaller project with the resource we have identified so far. This would mean fast tracking a smaller project to PEA while exploring the broader opportunities on the property, which could be developed in the near future as well. Within three quarters of working on this project, I am confident that we will be able to double the resource and publish a positive PEA for the broader project.
INN: Savvy investors know strong management is the key to a company’s success. Are there any executives you would like to highlight on your board and management team?
DN: I am very proud of our team and board. My background is very much in exploration, and I have over 40 years of experience in copper, gold and silver exploration. I have worked in many jurisdictions and my name is associated with gold and copper discoveries in North America, South America and Papua New Guinea. As such, I bring the right technical and management skills to the company as the only full-time executive. The rest of my North American team is part time as needed to run the company’s administrative affairs.
Our project geologist has over 25 years of experience in the Unkur region and has specialized knowledge of that type of copper deposit. We have a very strong Russian team handling technical, administrative and commercial details for the company. In fact, in Russia we are very much perceived as a Russian company, which is helpful.
In managing the company, I am supported by my non-executive chairman, Alexander Molyneux. He’s worked for [Robert] Friedland in Mongolia and also has banking, commercial and financial experience. Despite holding a non-executive title, he is very much a colleague in running the company, allowing me to focus on the technical aspects of the project.
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