It was a pivotal moment.
Within a month, Azarga was able to announce that it was embarking on a preliminary economic assessment for Unkur, using well respected consultants Tetratech.
The option was exercised early, but the advantages of going to 100% at this stage had become clearer to Azarga chief executive Dusty Nicol over the past year.
“It was one of the pushbacks we got on our last equity raise,” he says. “There was a perception it might be a problem. And it’s very helpful now that we have the deferred cash payments removed.”
And so, onto the preliminary economic assessment, which is likely to run concurrently with new exploration and some fast-tracking of engineering.
Nicol is in no doubt of the opportunity available at Unkur, and also somewhat understanding of previous market reservations.
“If this patch of ground were in Chile or Mexico I’d probably be able to walk across the whole 60 kilometres without ever taking my feet off a drill collar,” he says.
“We believe we’re in an emerging copper province."
But doing the project justice in public has been difficult though, due to the stringent nature of the Canadian NI43-101 regulations.
“The Soviets thought this was a plus 150mln tonne resource,” says Nicol.
“We’re only at 42mln tonnes. But if we can get to 100mln tonnes of ore at a grade of 1% copper then it starts becoming something of global significance.”
Investors who may be cautious about committing to Russia have now had at least some of their worries assuaged. Azarga’s move to 100%-ownership at Unkur has gone unremarked by Russians in general. There’s no issue over ownership, nor one over operating.
Instead, Nicol argues that the issue of operating in Russia is purely “one of perception.”
“We have very clean title to the project,” he says. “The horror stories all relate to companies that did deals with oligarchs. In terms of infrastructure we’re less than 10 kilometres from a major railway and five kilometres from a power line. We are 45 minutes from an airport. It’s in many ways easier to work in than South America. It’s easier than Alaska and Northern Canada.”
Focus on copper
With all that in mind, it’s hardly surprising that Azarga is open to finding more opportunities in Russia. To that end, it’s signed a memorandum of understanding with certain of the vendors of Unkur jointly to seek out new copper and silver projects that offer similar potential.
“I’m always opportunistic, but we have made the decision to focus on copper,” says Nicol.
“It’s most likely that the next project will be similar to Unkur. We’ve looked at a couple of projects that are similar in terms of geology and size. But for the foreseeable future the emphasis will be on advancing Unkur.”
The preliminary economic assessment is expected to take between three-to-four months to complete.