Azure Minerals (ASX: AZS) has recommenced diamond drilling at its wholly owned El Tecolote Project in Mexico with an increased exploration budget from its joint venture partner, Japanese Government organisation Japan Oil, Gas and Metals National Corporation (JOGMEC).

Following the evaluation of positive results received to date, JOGMEC has increased its 2011-12 total budget to US$2.27 million to include an additional 1,000 metres of diamond drilling within the current stage of the El Tecolote exploration program.

Situated between the company’s San Eduardo and La Tortuga Projects, El Tecolote covers 178 square kilometres of land containing abundant evidence of base metal mineralisation with potential for both porphyry copper and skarn copper-zinc-silver deposits.

The El Tecolote Mine – which previously produced 1.4 million tonnes at 1.9% copper, 7% zinc and 47 grams per tonne silver – closed in 1984 due low commodity prices, with unmined copper and zinc mineralisation remaining around the old mine workings.

An intensive US$1.5 million exploration program has identified several new targets, including Reyna del Cobre (skarn), extensions of the El Tecolote Mine (skarn) and several nearby porphyry copper prospects, all of which will be tested by the increased 4,000 metre drilling program.

To enable this program to be completed by March, Azure has mobilised a second drill rig to site.


Azure/JOGMEC JV

JOGMEC manages Japan’s stockpiling of oil, liquefied petroleum gas (LPG) and rare metals, including the construction of national LPG stockpiling bases.

Under the terms of the joint venture, JOGMEC will spend US$5 million on exploration over three years for a 51% interest in El Tecolote, and can earn an additional 19% stake by spending a further US$8 million during the following three years, which would increase the interest to 70%.

Importantly, these funds not only ramp up exploration at the highly prospective El Tecolote Project, but provide a huge vote of confidence for Azure.