COVID-19 UPDATE

Upon the onset of the COVID-19 pandemic, Azure acted quickly to ensure the well-being and safety of employees, contractors and local communities by implementing the following steps in early to mid-March:

• Suspension of drilling and all field exploration;
• Suspension of trial processing of ore from Oposura with concentrates bagged and stored in the Company’s warehouse;
• Field crews demobilised to their home bases; and
• Implementation of recommended policies and procedures which included “no travel”, “no congregating in groups”, “social distancing” and “working from home”.

On March 31st, the Mexican Federal Government declared a State of Emergency and suspension of all non-essential activities, industries and travel for the period to 30th April. This included the immediate shutting down of all mines and mining and exploration activities in Mexico, and all offices deemed non-essential were closed.

ALACRÁN PROJECT (100% Azure: gold-silver-copper)

• RC drilling program suspended with 36 holes completed for 3,604m
• Better gold intersections include:
  • MDPC-143: 126.0m @ 2.0g/t Au from 1.5m; including 34.5m @ 3.9g/t Au
  • MDPC-160: 37.5m @ 1.8g/t Au from 1.5m; including 19.5m @2.4g/t Au
  • MDPC-168: 21.0m @ 2.0g/t Au from 19.5m; including 15m @ 3.75g/t Au
• New greenfields copper discovery made at Gregors with first-pass drilling intersecting a blind zone of copper sulphide mineralisation, returning:
  • GGC-002: 6.0m @ 2.30% Cu within a wider zone of 30m @ 0.68% Cu from 22.5m
  • GGC-003: 1.5m @ 7.03% Cu within a wider zone of 18m @ 0.96% Cu from 21.0m
• Wide zone of gold mineralisation intersected beneath the old San Simon mine:
  • MDPC-168: 21m @ 2.0g/t Au & 64g/t Ag from 19.5m; including 6.0m @ 3.35g/t Au

OPOSURA PROJECT (100% Azure: zinc-lead-silver)

• Trial processing produced circa 50 tonnes of bulk zinc-lead-silver concentrate grading approximately 35% Zn, 30% Pb & 140g/t Ag
• Concentrates produced have been bagged and stored

ALACRÁN PROJECT – (AZS 100% ownership)

Reverse Circulation drilling was terminated in early March with 36 holes (MDPC-138 to MDPC-169 & GGC- 001 to GGC-004) drilled for 3,604 metres. All assay results have been received.

Drilling was undertaken at the Loma Bonita gold-silver deposit for resource infill and extension, at Mesa de Plata to collect additional samples for advanced metallurgical testwork, and at the Cerro San Simon, Mina San Simon and Gregors greenfields exploration targets.

RESOURCE INFILL AND EXPANSION DRILLING AT LOMA BONITA

The Loma Bonita deposit, as defined by the current Mineral Resource Estimate (MRE), extends over 600 metres north-south, up to 200 metres east-west, and remains open for expansion. Mineralisation starts at surface and in places the true width/thickness of the mineralised zone exceeds 100 metres.

Resource expansion drilling comprised stepping out from the southern and eastern resource boundaries to increase the resource size while resource infill drilling was undertaken to improve definition of internal high-grade zones, confirm internal continuity and obtain samples for additional metallurgical testwork.

Better gold intersections from drilling outside of the current resource boundaries (ASX: 5 February, 4 March & 23 March 2020) include:

• MDPC-141:      36.0m @ 1.0g/t Au from 12.0m
• MDPC-153:      58.5m @ 0.7g/t Au from 15.0m
• MDPC-154:      73.5m @ 0.7g/t Au from 0m
• MDPC-155:      31.5m @ 1.7g/t Au from 0m (entire hole)
• MDPC-159:      75.0m @ 0.5g/t Au from 0m
• MDPC-160:      37.5m @ 1.8g/t Au from 1.5m
• MDPC-165:      7.5m @ 2.3g/t Au from 22.5m

Based upon these mineralised intersections, which occur up to 150 metres outside of the current resource boundaries, the Company expects that a revised MRE for the Loma Bonita deposit would result in increased contained gold ounces.

The current mineral resources estimate for Loma Bonita is: 150,000oz gold & 4.8Moz silver in 5.4Mt @ 0.9g/t Au & 28g/t Ag (refer Table 1).

Table 1: Loma Bonita Mineral Resource Estimate (in accordance with the JORC Code 2012)

Holes were also drilled inside the current resource to confirm internal continuity of high-grade zones and potentially upgrade some resources from Inferred category to Indicated resources. Better gold intersections (ASX: 5 February, 4 March & 23 March 2020) from these holes include:

• MDPC-143:      126.0m @ 2.0g/t Au from 1.5m
• MDPC-161:      28.5m @ 1.3g/t Au from 0m
• MDPC-162:      34.5m @ 1.2g/t Au from 87.0m

METALLURGICAL DRILLING AT MESA DE PLATA

Azure’s drilled three holes (MDPC-150 to 152) into the Mesa de Plata silver deposit to collect bulk samples for advanced metallurgical testwork, with each hole intersecting wide intervals of high-grade silver mineralisation. Intersections from these holes include (ASX: 4 March 2020):

• MDPC-150:      10.5m @ 805g/t Ag from 12m; including 6.0m @ 1,284g/t Ag
• MDPC-151:      24.0m @ 474g/t Ag from 36m; including 15.0m @ 677g/t Ag
• MDPC-152:      40.5m @ 344g/t Ag from 0m; including 10.5m @ 774g/t Ag

Selected samples from these holes will be used for advanced stage metallurgical testwork for the purpose of optimising the process flowsheet for a Mesa de Plata mining and processing operation.

The Mesa de Plata Mineral Resource Estimate (refer Table 2) is: 27.4Moz silver in 10.5Mt @ 82g/t Ag which includes an at-surface high-grade resource of 15.5Moz silver in 1.8Mt @ 275g/t Ag.

Table 2: Mesa de Plata Mineral Resource Estimate (in accordance with the JORC Code 2012)

EXPLORATION DRILLING

Gregors Copper Sulphide Prospect

The Gregors prospect was originally recognised by Azure’s geologists in early 2016 when mapping identified breccia and gossan outcropping over an area of approximately 100m x 100m. The strongly iron- rich breccia and boxwork texture within the gossan suggested a sulphide-rich source, potentially representing base metal mineralisation. However, geochemical sampling of the outcrop returned only low grades of precious and base metals, downgrading the priority of the prospect at that time.

In late 2016, Azure flew an airborne VTEM geophysical survey over the entire Alacrán project area, and a small and discrete, reasonably intense electromagnetic (EM) response was detected coincident with the gossan outcrop. Modelling indicated the presence of a steep east-dipping EM conductor plate located beneath the gossan outcrop.

No  further exploration was  undertaken over this  anomaly until  late  in 2019, when  Azure regained full ownership and control of the Alacrán project from former partner Teck Resources. Detailed mapping, surface geochemical sampling and a ground EM survey were carried out over the gossan and the area of the VTEM anomaly in early 2020. This identified faults and shearing and strong alteration within and around the gossan, and sampling returned weakly anomalous copper grades.

Four angled RC drill holes were drilled to test the EM anomaly and beneath the gossan with two holes (GGC-002 & GGC-003) being drilled from the same collar position at different dip angles.

Both holes intersected wide zones of breccia and strongly altered volcanic rocks containing significant visual quantities of disseminated chalcopyrite (copper sulphide) mineralisation. These holes returned the following copper intersections (ASX: 23 March 2020):

• GGC-002: 30m @ 0.68% Cu from 22.5m; including 6.0m @ 2.30% Cu
• GGC-003: 18m @ 0.96% Cu from 21.0m; including 1.5m @ 7.03% Cu

The other two holes (GGC-001 & GGC-004) intersected altered and brecciated rocks containing disseminated pyrite, pyrite in veins and minor amounts of disseminated chalcopyrite that returned anomalous copper grades.

The Company’s current interpretation is that GGC-002 & GGC-003 intersected a higher-grade, copper-rich core potentially representing a mineralised breccia pipe and GGC-001 & GGC-004 drilled a lower-grade halo.

The presence of strong copper mineralisation hosted by iron-rich breccia is very promising as numerous high-grade, copper-rich breccia pipes associated with nearby copper porphyry bodies have been discovered and mined in the Cananea mining district. For example, the La Colorada breccia pipe (approximately 5Mt @ 7% Cu) was mined up to the 1930s, and the Maria breccia pipe (ore reserves of 1.6Mt @ 6% Cu) was discovered in 1979 and mined up to the 1990s. At the top of these breccia pipes the cross-sectional area is usually less than 100m x 100m and the mineralised bodies often extend to very significant depths (in the hundreds of metres).

Azure is undertaking a detailed data review and interpretation plus initial mineralogical and metallurgical studies to assess potential and assist with planning a follow-up drill program.

Mina San Simon

One RC hole (MDPC-168) was drilled to test at the historical Mina San Simon mine located about 700m southeast of the southern Loma Bonita resource boundary. The area between Loma Bonita and Mina San Simon and in the vicinity of Mina San Simon is mostly untested by drilling.

The old workings comprise two horizontal tunnels and a 30m deep vertical shaft which exploited a zone of vuggy silica hosting gold and silver mineralisation. A hole drilled by Azure in 2015 (LM-02) intersected a void created by the old mine workings that had extracted the mineralised zone.

Hole MDPC-168 drilled below these old mine workings and returned a well-mineralised gold and silver

intersection (ASX: 23 March 2020), hosted in vuggy and massive silica, of:

• MDPC-168: 21.0m @ 2.00g/t Au & 64g/t Ag from 19.5m

Further drilling to test the vuggy silica mineralised zone, which is interpreted to extend further to the east and south beneath the Cerro San Simon hill, will be undertaken in the next drill program.

Cerro San Simon

Two RC holes (MDPC-148 & 149) were drilled at the Cerro San Simon prospect to follow up previous drill holes which intersected encouraging gold mineralisation, which included:

• MDPD-025: 29.6m @ 0.56g/t Au (ASX: 21 December 2016)
• MDPD-035: 12.6m @ 0.37g/t Au (ASX: 21 December 2016)
• ALA-17-004: 63.0m @ 0.47g/t Au (ASX: 10 May 2018)

Both new holes intersected gold mineralisation (ASX: 4 March 2020) at the expected depths, including:

• MDPC-148: 31.5m @ 0.40g/t Au from 12.0m
• MDPC-149: 16.5m @ 0.80g/t Au from 61.5m

The gold mineralisation encountered at both Cerro San Simon and Mina San Simon is hosted in a unit of strongly silicified volcanics and in some places in vuggy silica. This shallow-dipping unit outcrops extensively around the San Simon hill and north to the old Mina San Simon mine. In addition to the gold intersections from the drilling, it returned strongly anomalous gold assays from extensive surface sampling and detailed channel sampling from inside the old mine workings. This suggests the potential for a bulk-tonnage style gold deposit and further drilling is warranted for this prospect.

Figure 1: Plan of the Alacrán Project with drill holes

Figure 2: Mesa de Plata and Loma Bonita mineral resources and nearby drill holes

Figure 3: Drill holes at Gregors copper sulphide prospect

Figure 4: Drone photo of outcropping gossan at Gregors, looking northwest

Figure 5: Drone photo of drilling at Gregors, looking southeast

Figure 6: Photos of RC drill cuttings from Gregors with mineralised copper intersections Drill hole GGC-002 on the left and GGC-003 on the right

OPOSURA PROJECT – (AZS 100% ownership)

ORE PROCESSING, CONCENTRATE PRODUCTION AND OFF-TAKE OPTIONS

Due to the onset of the COVID-19 pandemic, Azure has suspended trial processing of Oposura ore and production of bulk zinc-lead-silver concentrates.

Separate parcels of high-grade ore (grading approximately 23.8% Zn & 17.9% Pb), mid-grade ore (grading approximately 9.8% Zn & 8.2% Pb), and low-grade ore (grading approximately 4.6% Zn & 4.6% Pb) were processed through the Tecoripa sulphide flotation plant on a batch basis.

Processing produced approximately 50 tonnes of high-quality, bulk zinc-lead-silver concentrate grading approximately 35% Zn, 30% Pb and 140g/t Ag with very low levels of contaminant metals and minerals. This bulk concentrate is potentially a marketable product, having a high value and low transport cost on a per tonne basis. Azure received one indicative tender from an international metals trading company for the purchase of this product and other companies expressed interest however discussions for concentrate sales have been suspended until the COVID-19 situation has stabilised or is resolved.

CORPORATE

During the quarter the company expensed some $1,138,000 on the exploration activities and $102,000 on the production activities reported above.

Payments to related parties of the entity and their associates totalled $194,000 and consisted of $37,000 Director fees and $157,000 Executive Service fees.

No mining concessions were acquired or relinquished during the quarter.

-ENDS-

Authorised for release by Brett Dickson, Company Secretary

For enquiries, please contact:
Tony Rovira
Managing Director
Azure Minerals Limited
Ph: +61 8 9481 2555

or visit www.azureminerals.com.au

Competent Person Statements:

Information in this report that relates to previously reported Exploration Results has been crossed-referenced in this report to the date that it was reported to ASX. Azure Minerals Limited confirms that it is not aware of any new information or data that materially affects information included in the relevant market announcements.

Information in this report that relates to Mineral Resources for the Alacrán Project is extracted from the reports “Silver Resource Upgraded at Mesa de Plata” created and released to the ASX on 1 December 2016 and “Initial Mineral Resource Estimate for Loma Bonita” created and released to the ASX on 21 December 2016 and are available to view on www.asx.com.au. Azure Minerals Limited confirms that it is not aware of any new information or data that materially affects information included in the relevant market announcement, and that all material assumptions and technical parameters underpinning the estimates in the announcement continue to apply and have not materially changed.

Information in this report that relates to Mineral Resources for the Oposura Project is extracted from the report “Azure Delivers Robust Initial Mineral Resource at Oposura” created and released to the ASX on 4 July 2018 and is available to view on www.asx.com.au. Azure Minerals Limited confirms that it is not aware of any new information or data that materially affects information included in the relevant market announcement, and that all material assumptions and technical parameters underpinning the estimates in the announcement continue to apply and have not materially changed.

Original Article: https://azureminerals.com.au/wp-content/uploads/2020/04/200421.pdf