Australia-based miner Azure Minerals has approved the start of trial mining and processing of high-grade mineralisation at its wholly owned Oposura zinc-lead project in Mexico.

Oposura is located in the northern Mexican state of Sonora.

The mine production and processing rate would initially be between 1,500t per month (tpm) and 3,000tpm of mineralised material.

Mineralised material will be graded at approximately 15% of combined zinc and lead with ore. It will be processed on a toll treatment basis through a sulphide flotation processing facility nearby.

According to Azure, there is a scope to increase the mine production rate if additional processing capacity becomes available.

Azure managing director Tony Rovira said: “This is an exciting step forward for the company. With minimal upfront capital required, this trial mining operation will provide early positive cash flow and Azure will start to realise value from the asset.

“Generation of this cash flow will assist in funding completion of the Feasibility Study and meeting other corporate expenses.”

Rovira added: “Furthermore, this operation will provide additional confidence for development of the full-scale mining and processing operation at Oposura, while the delivery of high-quality concentrates ahead of full-scale production will support future concentrate marketing and project financing negotiations.”

Through a binding agreement, Azure has secured A$2m funding for trial mining at Oposura from its major shareholder Deutsche Balaton. Funding will come through a convertible note.

The convertible note will have a two-year term and an annual interest rate of 12.5%.

Funding will allow Azure to meet startup costs, as well as for working capital purposes.

Production at the Oposura deposit is expected to start by late-2020 or early 2021.