Highlights – Copalquin Gold-Silver, Mexico

• Drilling in the Copalquin gold-silver district has expanded known mineralisation at El Refugio to 700m long x 350m deep
• Discovery of the ‘77 clavo’ at El Refugio with bonanza grade intercept:
  • 8.26m @ 80.3 g/t gold, 705 g/t silver from 468.34m (CDH-077), including
  • 6.26m @ 106 g/t gold, 913 g/t silver from 468.34m, including
  • 0.77m @ 837 g/t gold, 6,680 g/t silver from 471.63m
• Continued expansion of the El Refugio ‘clavo’ (4.17m @ 62.0 g/t gold and 445 g/t silver from 233.43m CDH-050) with multiple high-grade intercepts including:
  • 2.70m @ 13.8 g/t gold, 82.9 g/t silver from 300.3m (CDH-075), plus
  • 4.25m @ 10.9 g/t gold, 364 g/t silver from 307.05m,
  • o 8.00m @ 5.32 g/t gold, 104.63 g/t silver from 289.3m (CDH-063)
  • o 4.82m @ 4.12 g/t gold, 107.13 g/t silver from 259.7m (CDH-062)
  • o 7.60m @ 2.34 g/t gold, 143.6 g/t silver from 253.25m (CDH-069)
• Westerly expansion at El Refugio with:
  • 26.78m @ 2.26 g/t gold, 25.1 g/t silver from 143.22m (CDH-066)
  • 4.61m @ 1.87 g/t gold, 89.3 g/t silver from 155.84m (CDH-068), plus
  • 0.77m @ 4.00 g/t gold, 37.0 g/t silver from 176.41m, plus
  • 0.90m @ 0.59 g/t gold, 38.0 g/t silver from 193.38m,
• Confirmatory El Cometa bonanza grades with twin of historic drill hole:
  • 6.8m @ 74 g/t gold, 841 g/t silver from 35.2m (CDH-072, twin of historic UC-03), including
  • 2.1m @ 235 g/t gold, 2,554 g/t silver from 37.9m
• Soil sampling expanding the El Refugio structure a further 1.3 km west
• Maiden JORC gold and silver resource estimate for El Refugio on track for H2 2021
• Drill core samples selected for metallurgical test work
• Cash at bank $2.92m as of 30 June 2021

Mithril Resources Ltd (ASX: MTH) (Mithril or the Company) is pleased to provide a quarterly update on activities at its Copalquin Gold Silver Project in Mexico for the period ending 30 June 2021.

Exploration work in the Copalquin Gold-Silver District has continued to develop and expand the El Refugio discovery with multiple bonanza grade intercepts drilled, extension of the mineralised zone along strike and down-dip and expansive soil sampling program.

The exploration plan for the September quarter 2021 includes continued development of the high grade ‘ore shoots’ (clavos) at El Refugio, resource expansion drilling and preparations for the El Refugio/El Cometa maiden JORC resource estimation work.

El Refugio, Copalquin District, Mexico

Post the end of the quarter (12 July 2021) Mithril released assay results for three drill holes CDH-075, CDH-076 and CDH-077 drilled during the June quarter, continuing to expand the El Refugio structure down dip with high-grade and bonanza grade gold-silver intercepts. Hole CDH-077 was designed to test the depth extents of the high-grade clavo and, in particular to test the zone predicted by the geologic model to be a bonanza zone at El Refugio. Drill hole CDH- 077 successfully intercepted extremely high-grade gold and silver within a broad intercept of 8.26 metres at 80.3 g/t gold and 705 g/t silver from 468.34 metres down hole. Further drilling commencing in July 2021 is designed to expand and further test the CDH-077 intercept.

Historic Bonanza Grades Confirmed at El Cometa

In mid-June 2021, the Company reported bonanza grades at El Cometa and the continued expansion of the El Refugio structure. Assay results for four drill holes were received expanding the El Refugio structure plus a hole designed to twin historic drill hole UC-03, intercepting extremely high-grade gold and silver (CDH-072).

Hole CDH-072 is Mithril’s follow up test of the Cometa portion of the Refugio to Los Reyes structural zone. The first pass drilling (CDH-026 – CDH-031) was oriented perpendicular to the main structural zone and did not intercept the historically reported high grade gold mineralisation found in UC Resources hole UC-003. After further detailed geologic mapping, it is postulated that there are a series of N – S tension gashes or dilatant fractures that were favourable for the deposition of bonanza grade gold. Drill hole CDH-072 intercepted 6.8m @ 74 g/t gold, 841 g/t silver from 35.2m (twin of historic UC-03), including 2.1m @ 235 g/t gold, 2,554 g/t silver from 37.9m. Follow up drilling in this area will include (20m) step out drilling to locate the fractures.

EXTENSIVE GOLD-SILVER CONFIRMED AT EL REFUGIO WEST

In mid-May, the Company announced drill results, testing the westerly extensions of El Refugio.

The first holes drilled west along the main El Refugio discovery intercepted multiple gold-silver veins within the broad El Refugio structure. These first holes reported confirmed the structure to continue 180 metres further west. Further drilling in this area will target the structure deeper and continue to test for continuation along strike.

Hole CDH-064 intercepted multiple veins down dip of holes CDH-024 and 025 within a broadening mineralised structure. This will continue to be developed at depth.

CDH-064 – 4.30m @ 0.60 g/t gold, 24 g/t silver from 165m, plus 5.85m @ 0.84 g/t gold, 32.8 g/t silver from 175.2m, plus 3.00m @ 0.71 g/t gold, 34 g/t silver from 201m, plus 2.5m @ 0.58 g/t gold, 38.2 g/t silver from 226.5m.

Holes CDH-065 and CDH-066 have stepped out along strike 100m to the west and have successfully intercepted the top of the El Refugio structure. Future drilling in this area will target and develop the structure deeper.

CDH-065 – 1.37m @ 8.73 g/t gold, 397 g/t silver from 186.3m, plus 1.00m @ 0.48 g/t gold, 42 g/t silver from 119.8m, plus 1.02m @ 0.90 g/t gold, 15 g/t silver from 111.68m.

CDH-066 – 26.78m @ 2.26 g/t gold, 25.1 g/t silver from 143.22m, including 1.71m @ 5.23 g/t gold, 160 g/t silver from 145.44m, and 2.00m @ 15.6 g/t gold, 35 g/t silver from 159.0m, and 1.22m @ 5.87 g/t gold, 5.5 g/t silver from 164.58m.

CDH-067 – drilled down dip of hole CDH-066, stopped in stockwork zone before reaching the target due to swelling clay. 1.00m @ 1.17 g/t gold, 41 g/t silver from 189.9m, and 0.71m @ 0.77 g/t gold, 23 g/t silver from 195.95m. To be re-entered and completed later in program.

CDH-068 was drilled a further 80m to the west of hole CDH-066 and intercepted the Refugio structure with 4.61m @

1.87 g/t gold, 89.3 g/t silver from 155.84m, plus 0.77m @ 4.00 g/t gold, 37.0 g/t silver from 176.41m, plus 0.90m @ 0.59 g/t gold, 38.0 g/t silver from 193.38m

CONTINUED EXPANSION OF EL REFUGIO DOWN DIP

CDH-069 is a deeper hole on the same section as CDH-062 (Figure 5) intercepting the veins 70 metres down dip in central part of the current El Refugio drill area with the assays showing the continued width and depth progression of this high-grade mineralised zone within the structure. 7.60m @ 2.34 g/t gold, 143.6 g/t silver from 253.25m, plus 1.00m @ 2.64 g/t gold, 167.0 g/t silver from 266.35m,

Drill holes aggressively stepped down dip of hole CDH-053 on the eastern side of the El Refugio clavo have extended the veins deeper by 50 metres (CDH-070) and 100 metres (CDH-071) as shown in Figure 6 with 6.00m @ 1.41 g/t gold, 66 g/t silver from 240m (CDH-070), including 0.50m @ 9.53 g/t gold, 613 g/t silver from 240m, plus 1.00m @ 4.94 g/t gold, 96.0 g/t silver from 235.87m, plus 1.80m @ 2.38 g/t gold, 53.1 g/t silver from 157.55m. CDH-071 intercepted 5.00m @ 2.36 g/t gold, 95.3 g/t silver from 186m (CDH-071), plus 0.50m @ 28.9 g/t gold, 471 g/t silver from 222.77m, plus 1.66m @ 2.41 g/t gold, 152.8 g/t silver from 235.87m.

Drill Core Photos with Visible Gold from Holes CDH-072, 075, 076 and 077

Preliminary Concept for Mine Access – El Refugio

Deep high-grade intercepts such as in holes CDH-061, CDH-071 and CDH-077 bring mineralisation closer to potential access from a site with favourable logistics, taking advantage of the local topography. The CDH-077 ‘bonanza zone’ can be reached by an exploration drift (adit) of approximately 750 metres long. Such a drift would allow access for the close-spaced sampling that will be necessary to bring the bonanza grade zone into higher confidence resource categories.

Soils Sampling Program – El Refugio West

Mithril announced soil sampling results (silver only) for the Refugio and part of Refugio West areas on March 24, 2021. After receipt of the gold analysis the area has been re-interpreted identifying low-level gold anomalies that correspond to the locations of mapped quartz-bearing structures.

A follow-up soil sampling program over the Refugio West target was completed during the quarter with 240 samples collected from five sample grids of 48 samples each. This sampling program tests the hypothesis that the mapped structures to the west of Refugio are likely to be gold-bearing veins. Results from this program have extended the target zone for drilling a full 1,300 meters west from the currently westernmost drill holes.

Observations in the field include zones of quartz stockwork, large areas of clay alteration and the presence of rhyolite dikes and domes which are associated with mineralisation in the main Refugio target-area.

A map of the soil grids is shown below in Figure 21 with quartz-bearing structures shown in red. Final analysis will be completed once all assays from soils are received.

Australian Projects

To ensure the Company maintains its focus on the Copalquin Gold Silver Project, Mithril has exploration partners to farm-in, sole fund and operate exploration activities on its Australian assets. These include:

• Great Boulder Resources (GBR.ASX) at the Lignum Dam Project;
• Auteco Minerals (AUT.ASX) at the Limestone Well Project;
• Carnavale Resources (CAV.ASX) at the Kurnalpi Project; and
• CBH Resources Limited (“CBH”) at the Billy Hills Zinc Project.

Having farm-in exploration partners solely fund all exploration costs, ensures that the Mithril tenements are kept in good standing for the duration of the respective partnership agreements with the potential to benefit from prospectivity and exploration upside.

Billy Hills Zinc (Billy Hills)

• Mithril 100%; and
• CBH Resources Limited earning up to 80% interest by completing expenditure of A$4M over 5 years.
• No work was undertaken during the quarter.

Kurnalpi Project (Kurnalpi)

• Mithril 100%; and
• Carnavale Resources earning an initial 80% interest by keeping the tenements in good standing over three years and paying Mithril A$250,000 cash.
• No work was undertaken during the quarter.

Lignum Dam Project (Lignum)

• Mithril 100%; and
• Great Boulder Resources earning up to 80% by completing expenditure of A$1M over four years.
• Great Boulder carried out a program of auger geochemical sampling over nickel and gold prospective rock types and assays are awaited.

Limestone Well Project (Limestone)

• Mithril 100%;
• Auteco Minerals can earn up to an 80% interest in the project by completing exploration expenditure of A$2.5 million over five years; and
• Following drilling (see Auteco’s ASX Announcement 14th October 2019), Auteco elected to continue sole funding the exploration work at Limestone Well by completing exploration expenditure of $1.5M by August 2021 to earn an initial 60% interest.

OUTLOOK FOR NEXT QUARTER

In the next quarter ending 30 September 2021, the Company will progress its work for its maiden JORC resource estimate for El Refugio/El Cometa structures which will demonstrate the size that can be achieved from the only 12 months drilling completed and to help guide the drill plan for the ongoing expansion of the gold and silver resources in the Copalquin District.

CORPORATE

Mr Dudley Leitch retired from the Board for personal reasons, effective 7 July 2021. Dudley had been a Non-Executive Director of Mithril since May 2020. He was also a director of Sun Minerals Pty Ltd and instrumental in the successful acquisition of Sun Minerals by Mithril. The Mithril board and management thanked Dudley for his support and contribution.

CASH

The Company has cash reserves of as of 30 June of $2.92m.

RELATED PARTY PAYMENTS

In line with its obligations under ASX Listing Rule 5.3.5, Mithril Resources Limited notes that the only payments to related parties of the Company, as advised in the Appendix 5B for the period ended 30 June 2021, pertain to payments to directors for fees, salary and superannuation.

-ENDS-

Released with the authority of the Board. For further information contact:

John Skeet
Managing Director and CEO
[email protected]
+61 435 766 809

Mark Flynn
Investor Relations
[email protected]
+61 416 068 733

Competent Persons Statement

The information in this report that relates to sampling techniques and data, exploration results and geological interpretation has been compiled by Mr Hall Stewart who is Mithril’s Chief Geologist. Mr Stewart is a certified professional geologist of the American Institute of Professional Geologists. This is a Recognised Professional Organisation (RPO) under the Joint Ore Reserves Committee (JORC) Code.

Mr Stewart has sufficient experience of relevance to the styles of mineralisation and the types of deposits under consideration, and to the activities undertaken, to qualify as a Competent Person as defined in the 2012 Edition of the Joint Ore Reserves Committee (JORC) Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves. Mr Stewart consents to the inclusion in this report of the matters based on information in the form and context in which it appears. The Australian Securities Exchange has not reviewed and does not accept responsibility for the accuracy or adequacy of this release.

ABOUT THE COPALQUIN GOLD SILVER PROJECT

The Copalquin mining district is in Durango State, Mexico and covers an entire mining district of 70km2 containing several dozen historic gold and silver mines and workings, ten of which had notable production. The district is within the Sierra Madre Gold Silver Trend which extends north-south along the western side of Mexico and hosts many world class gold and silver deposits.

Multiple mineralisation events, young intrusives thought to be system-driving heat sources, widespread alteration together with extensive surface vein exposures and dozens of historic mine workings, identify the Copalquin mining district as a major epithermal centre for Gold and Silver.

Mithril Resources is earning 100% interest in the Copalquin District mining concessions via a purchase option agreement detailed in ASX announcement dated 25 November 2019.

Mithril Group Tenement information 30 June 2021

Australian Interests:

Mexican Operations:

Original Article: https://investi.com.au/api/announcements/mth/529906f9-c89.pdf