Highlights – Copalquin Gold-Silver, Mexico

• Work on schedule to complete a maiden JORC mineral resource estimate (MRE) Q4 2021
• AMC Consulting appointed for the maiden MRE and completed the site due diligence
• Drilling within the MRE area completed with assays due late October

Drill highlights reported during the quarter

• High-grade gold-silver confirmed deep in the El Refugio structure proximal to the bonanza intercept of CDH-077 (8.26m @ 80.3g/t gold, 705g/t silver from 468.34m) with:
  • 8.85m @ 7.2 g/t gold, 335 g/t silver from 312.15m (CDH-084), including
  • 2.50m @ 18.22 g/t gold, 583 g/t silver from 317.0m, plus
  • 2.10m @ 2.05 g/t gold, 73.6 g/t silver from 324.9m, plus
  • 1.00m @ 1.16 g/t gold, 36.0 g/t silver from 394.0m

• High-grade intercepts in CDH-079 and CDH-080 extended the El Refugio high-grade gold-silver ‘clavo’ 80m further east:
  • 12.4m @ 7.60 g/t gold, 332 g/t silver from 86.6m (CDH-079), including
  • 4.19m @ 18.1 g/t gold, 810 g/t silver from 90.0m.
  • 6.11m @ 5.08 g/t gold, 197 g/t silver from 112.19m (CDH-080), including
  • 2.30m @ 9.47 g/t gold, 399 g/t silver from 116.0m.

• Bonanza grade intercept in CDH-077 extended the El Refugio high-grade gold-silver ‘clavo’ 160m further down dip:
  • 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 development of the El Refugio ‘clavo’ with further high-grade intercepted:
  • 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, including
  • 2.65m @ 16.3 g/t gold, 414 g/t silver from 315.0m, plus
  • 2.00m @ 1.02 g/t gold, 17.5 g/t silver from 315.0m, plus
  • 4.50m @ 0.84 g/t gold, 34.8 g/t silver from 358.5m

• Drilling of in-fill drill holes for the MRE at El Refugio CDH-085 to CDH-090 completed during the quarter with assays expected late October 2021

Highlights – Corporate

• A$3.3m share placement (before costs) at A$0.015 per share
• Binding term sheet for sale of 90% interest in Limestone Well tenements. Sale Agreement to be completed next quarter with cash proceeds of A$500,000 (ASX Announcement 12 October 2021)
• The Company has continued to receive monthly refunds of Mexican value added tax (IVA)
• The Company remains fully funded to complete a maiden JORC MRE for El Refugio, continue its expansive drill program and progress study and test work at the Copalquin Gold-Silver District, Mexico
• Cash at bank A$3.7m as of 30 September 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 September 2021.

El Refugio, Copalquin District, Mexico

In mid-July, the Company announced excellent drilling results from CDH-077 and CH-075 to establish El Refugio as a significant deposit for gold and silver in the Copalquin district. (ASX Announcement 12 July 2021)

Assay results for three drill holes were received, 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 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.

In mid-August, the Company announced that drilling on the eastern side of El Refugio was extended 80 metres east. The broad, high-grade intercepts provided a significant boost to the resource potential in this part of El Refugio. (ASX Announcement 11 August 2021). Holes CDH-079 and CDH-080 were designed to test the eastern extents of the high- grade ‘clavo’ with the aim of providing infill data in this area for the maiden resource estimate work. Drill hole CDH- 079 intercepted high-grade gold and silver with 12.4 metres at 7.60 g/t gold and 332 g/t silver from 86.6 metres down hole. Drill hole CDH-080 was drilled further down dip and intercepted 6.11 metres at 5.08 g/t gold and 197 g/t silver from 112.19 metres down hole. The pierce points for the above two drill holes are shown on the following long section in Figure 4 with the extension of the high-grade zone. Two additional holes were completed further east with assays pending. Drill holes are planned up dip of these holes to further test the El Cometa structures, where drill hole CDH-072 intercepted 6.80m at 74.0 g/t gold and 841 g/t silver from 35.2 metres down hole.

In early September, the Company announced that deep drilling at El Refugio had again returned an excellent gold- silver intercept with hole CDH-084 confirming the high-grade mineralisation over 100m down dip in the structure. (ASX Announcement 8 September 2021) The intercept is proximal to the bonanza grade intercept of CDH-077, which is currently interpreted as being outside of the main El Refugio structure (Figure 19).

Drill holes CDH-082 and CDH-083 are shallower holes drilled on the eastern side of El Refugio at El Cometa, where the mineralisation appears to be controlled by subsidiary fractures that are not parallel to the main Refugio-Cometa structure (such as in CDH-072). Both holes returned reportable intercepts, expanding the resource footprint 80m east. Drill hole CDH-081 and the previously reported CDH-080 may be re-entered and extended 50m to intercept a deeper interpreted structure.

Intercepts for holes CDH-081 through CDH-083 are all in the Cometa (Refugio) vein. In the central section of El Refugio, at least as far east as CDH-070 and CDH-071 there is a deeper vein that these holes did not reach. It is expected that there are other changes happening in the Cometa portion of the deposit – sheeted (parallel) veins of Refugio give way to or are supplemented by the N – S fractures that host the extreme high-grade in CDH-072. Further drilling on this eastern side will follow up the high-grade CDH-072 intercept later this year.

Maiden Resource Estimate Progress

The current drilling through to CDH-090 consists of holes in the western extents of the current El Refugio maiden resource estimate (MRE) area will complete the database for the initial resource modelling to be undertaken by AMC Consultants. The drilling and the assay results are expected to be available late October 2021 with the resource estimation work being completed late November 2021. The independent site visit was conducted in September 2021.

Drill Core Photos with Visible Gold from Holes CDH-072, 075, 076 and 077
(see ASX Announcement 12 July 2021)

Workplan For Remainder of 2021

The primary focus of the work for the Copalquin District is the completion of a maiden JORC resource estimate for El Refugio whilst continuing the expansive drilling to further test the depth and westerly extensions at El Refugio.
Further drill holes are also planned at El Cometa to follow-up the shallow bonanza grade intercept of drill hole CDH-072 6.8m @ 74 g/t gold, 841 g/t silver from 35.2m (ASX Announcement 15 June 2021) and to develop the geologic interpretation of this area.

The last quarter of 2021 will see commencement of engineering study work for the development of an exploration access road into the district and an underground exploration drift at El Refugio. An underground drift at El Refugio, taking advantage of the topography, will allow more efficient exploration drilling and progress future development of the El Refugio deposit.

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.
• A desktop study of the local groundwater was completed as a step to securing native title clearance for drilling.

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;
• In October 2021, Mithril announced the execution of a binding term sheet for the sale of 90% interest in the Limestone Well tenements to its farm-in partner, Auteco Minerals for a payment of A$500,000 in cash. For details of the term sheet please refer to the ASX Announcement 12 October 2021

CORPORATE

In early September, the Company announced it had received firm commitments from sophisticated and professional investors to raise A$3.3m (before costs) through a Share Placement (Placement). The Placement was strongly supported by existing and new institutional and high net worth investors. (ASX Announcement 1 September 2021)

Capital Raising Details

Mithril completed a placement of shares to sophisticated and professional investors, comprising 220,000,000 new fully paid ordinary shares in the Company (New Shares) at an issue price of 1.5 cents to raise approximately $3.3m (before costs).

The share placement was conducted by Morgans Corporate Limited and Taylor Collison as joint lead managers and within the Company’s placement capacity under ASX Listing Rule 7.1. Settlement of the share placement occurred on 7 September 2021, with placement shares allotted (pursuant to Listing Rules 7.1) and traded on 8 September 2021.

The Capital Raising price of A$0.015 (1.5 cents) per New Share represented:

• 12.0% discount to the last traded price on Friday 27 August 2021 (A$0.017)
• 12.0% discount to the 5 day VWAP price (A$0.0170)
• 16.4% discount to the 15 day VWAP price (A$0.0179)

Funds raised are being used to continue drilling in the Copalquin Gold Silver District in Mexico, complete a maiden JORC gold and silver resource estimate for El Refugio, preliminary engineering studies and metallurgical testing and for general working capital.

Other

In October 2021, a binding term sheet was executed for the sale of 90% interest in it Limestone Well tenements for cash proceeds of A$500,000 ASX Announcement 12 October 2021

The Company has continued to receive Mexican value added tax (IVA @16%) refunds each month from its expenditures in Mexico. For 2021, the Company has received refunds for January to May and expects to continue to receive the monthly refunds which are currently running 5 months in arrears.

CASH

The Company has cash reserves as of 30 September 2021 of $3.7m.

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 September 2021, pertain to payments to directors for fees, salary and superannuation.

-ENDS-

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

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.

Further details and JORC tables for exploration results in this Annual Report are in ASX Releases listed below.

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.

Original Article: https://investi.com.au/api/announcements/mth/c243e069-3bc.pdf