HIGHLIGHTS:

• Initial Mineral Resource estimate of 2.9 million tonnes @ 5.0% Zn + 2.8% Pb
• Contained metal: 146,000 tonnes of zinc, 82,000 tonnes of lead and 1.6M ounces of silver
• 75% of contained metal is in the Indicated Mineral Resource category
• Mineral Resource remains open for extensions with further drilling planned for 2018
• Easily accessible, near-surface mineralisation provides multiple open pit and underground mine scheduling options
• Pit optimisation and underground stope design studies are in progress as part of the Preliminary Economic Assessment due in September

Azure Minerals Limited (ASX: AZS) (“Azure” or “the Company”) is pleased to report the initial Mineral Resource estimate for its 100%-owned Oposura zinc-lead-silver project (“Oposura”) located (see Figure 1) in Sonora, Mexico, of:

Table 1: Oposura Mineral Resource Estimate*

*Refer Tables 2, 3 & 4 for full details of the Mineral Resource

Azure’s Managing Director, Mr Tony Rovira, commented: “This initial Oposura Mineral Resource is a very positive outcome for the Company’s development and production strategy. Containing over 220,000 tonnes of zinc and lead and 1.6 million ounces of silver in near-surface, high-grade mineralised zones, Oposura is presenting a strong case for mine development.

“Open pit and underground mine planning and scheduling are now underway. The schedules will be used to optimise the proposed plant throughput rate and finalise the capital and operating cost estimates. Further information on the results of these studies will become available during the third quarter of 2018.

“Since acquiring Oposura less than a year ago, the Company has significantly advanced and derisked the project. Potential risks that have been positively addressed include the Mineral Resource, metallurgical performance and process route, concentrate marketing and transport, environmental baseline studies and access to infrastructure.”

This Mineral Resource is based upon 173 diamond drill holes totalling 11,108.6m (comprising 16 historical holes for 982.9m drilled by Grupo Minero Puma SA de CV (“Puma”) and 157 holes for 10,125.7m drilled by Azure). The Mineral Resource has been estimated and classified as Indicated and Inferred Mineral Resources in accordance with the guidelines of the JORC Code (2012)¹ by CSA Global Pty Ltd (CSA Global), Perth, Western Australia.

Significantly, 75% of the contained metal is classified in the Indicated Mineral Resource category (refer Tables 1 & 2), providing confidence in the continuity of grade and widths of the mineralisation.

Mineral Resources have been reported at different cut-off grades (refer Tables 3 & 4) considered applicable for various open pit and underground mining options being assessed in the mining study for the Preliminary Economic Assessment (PEA), which is expected to be reported in September.

This initial Mineral Resource shows potential for future expansion as the mineralisation remains open in several directions (see Figures 2 & 3). The most obvious area for increase is the Central Zone, a 500m-wide zone situated between the East and West Zones. This area has been only lightly tested by historical drilling and the mineralised horizon is present in several drill holes. Additional upside potential is also present to the north of the Mineral Resource.

Further drilling is planned in 2018 to upgrade the classification and expand this initial Mineral Resource, and to explore the wider property.

Figure 1: Location plan showing the Oposura Project and other Azure Minerals’ projects

¹ Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves. The JORC Code, 2012 Edition. Prepared by: The Joint Ore Reserves Committee of The Australasian Institute of Mining and Metallurgy, Australian Institute of Geoscientists and Minerals Council of Australia (JORC).

*Zinc Equivalency % US$:

Equivalent values in US$ are determined by the following factors:

• Zn Eq = ((%Zn x 0.875 x 0.85)+(%Pb x 0.85 x 0.95)+(g/t Ag x 0.67 x 0.70))/(%Zn x 0.875 x 0.85)
• Commodity prices used in this MRE:
  • Zinc $3,107.50/t, Lead $2,411/t (spot price, LME, 2018. www.lme.com, cited 0:00 GMT 20/06/2018);
  • Silver $16.20/oz (spot price, NYSE, 2018. www.kitco.com, cited 0:00 GMT 20/06/2018)
• Concentrate recoveries used in this MRE: Zn 87.5%, Pb 85%, Ag 67% (Locked Cycle and Batch Flotation tests: Azure Minerals Ltd, 2018.)
• Smelter recoveries used in this MRE : Zn 85%, Pb 95%, Ag 70% (International Benchmarks: Azure Minerals Ltd, 2018)
• It is the opinion of Azure Minerals Ltd that all the elements included in the calculation have a reasonable potential to be recovered and sold

Figure 2: Oposura project area with Mineral Resource outlines

Figure 3: Plan of Mineral Resource outlines and drill collars

Figure 4: Plan showing East Zone Mineral Resource outline, drill collars and section line A-AA

Figure 5: Section A-AA through East Zone Mineral Resource block model

Figure 6: Plan showing West Zone Mineral Resource outline, drill collars and section line B-BB

Figure 7: Section B-BB through West Zone Mineral Resource block model

OPOSURA MINERAL RESOURCE ESTIMATE

The Oposura Mineral Resource estimate (MRE) has been prepared in accordance with the requirements and guidelines of the JORC Code (2012) and is detailed in the JORC Code summary tables appended to this release.

Mr Alex Whishaw, Senior Resource Geologist at CSA Global in Perth, Western Australia has prepared the Mineral Resource estimate under the direct supervision of Dr Matthew Cobb. Dr Cobb is a Principal Resource Geologist at CSA Global in Perth, Western Australia, and qualifies as an MRE Competent Person, as defined under the JORC Code.

Geological Setting

Oposura is hosted by the Cretaceous-age Mesa Formation, a volcano-sedimentary sequence that extends across northern Mexico.

At Oposura, the host lithology is a felsic volcano-sedimentary sequence. Mineralisation predominantly occurs within the Arenillas Formation, a mixed unit of volcanic tuffs and limestone intervals sandwiched between two volcanic welded tuff units. The footwall unit is the Revancha Rhyolite and the hangingwall unit is the Candelaria Formation.

Based on the observed alteration mineralogy, Oposura fits the characteristics of a distal skarn, carbonate replacement style deposit, with skarn alteration and sulphide mineralisation replacing limestone horizons within the Arenillas Formation.

Mineralisation comprises zinc, lead and silver-bearing sulphides and iron sulphides (pyrite) occurring as massive to semi-massive stratabound lenses that replace limestone horizons in the sedimentary sequence. Higher grade zinc and lead mineralisation is correlated with elevated silver concentrations. The most extensive mineralised horizon replaces a well-developed, clean, massive to laminated limestone unit near the base of the Arenillas Formation. Extensive skarn alteration of limestone and of calcareous volcanoclastic sedimentary rocks is associated with the sulphide mineralisation and is characterised by manganese-rich calc-silicate minerals with strong, late-stage retrogression.

Massive sulphide mineralisation commences at surface with little evidence of oxidation or weathering.

Dimensions and Geometry

The mineralised horizon crops out discontinuously over approximately two kilometres on the eastern, southern and western slopes of the Oposura mountain (see Figures 3, 4 & 6) and displays sub-horizontal to shallow dips (refer Figures 5 & 7). Mineral Resource definition drilling defined two separate mineralised zones – East Zone and West Zone.

The sub-horizontal dip of the mineralised zones results in vertical thickness being very similar to true thickness. The vertical thicknesses of individual sulphide mineralisation lenses average 7m in East Zone and 3m in West Zone, with maximum vertical thicknesses of 20m in East Zone and 10m in West Zone (see Figures 5 and 7). The mineralised zones demonstrate good internal continuity of zinc, lead and silver grades appropriate to the Mineral Resource classifications.

Drilling confirmed that the zinc, lead and silver mineralisation within East Zone extends for approximately 475m (north-south) and 375m (east-west) along the eastern slope of the Oposura mountain. Drilling confirmed that the zinc, lead and silver mineralisation within West Zone extends for approximately 400m (north-south) and 475m (east-west) along the southern and western slopes at the western end of the Oposura mountain.

These two Mineral Resource zones are separated by the approximately 500m-wide Central Zone, which has been only lightly tested by historical drilling undertaken by Anaconda and Peñoles during the 1960s and 1970s. Several of these historical drill holes intersected zinc and lead sulphide mineralisation within the Arenillas Formation. Azure is currently planning further drilling to test Central Zone which, if successful, has the potential to expand the Mineral Resource.

Sampling Details

Mineral Resource definition drilling comprised 173 diamond drill holes (for 11,108.6m of drilling). Sixteen holes were drilled by the previous owner Puma (982.9m) and 157 holes by Azure (10,125.7m). Holes ranged from 10.65m to 134.35m deep, with an average depth of 61.21m, highlighting the shallow nature of the deposit.

Holes were drilled with a variety of azimuths and dips to ensure the mineralised horizon was intersected on an initial 50m × 50m spacing. Additional drilling to infill the hole spacing to 25m x 25m was undertaken in some areas. For the Mineral Resource, all Puma holes and 141 Azure holes intersected mineralisation.

Drill core was sawn in half along the core axis using a wet diamond core saw. All samples were collected from the same side of the core. Duplicate, standard and blank check samples were anonymously submitted with drill core samples at the rate of approximately one standard, blank or duplicate in every 10 samples. When a duplicate sample was required, the ½-core sub-sample was then wet-cut preparing two ¼-core sub-samples for laboratory dispatch, one considered to be the primary sample, the other a duplicate.

Sample lengths for assay purposes were guided by changes in geology and varied from 0.05m to 3.05m, with an average sample mass of 2.71kg.

Sample Preparation and Assaying

Bureau Veritas Mineral Laboratories (BVL) prepared all the samples from Oposura at their sample preparation facilities in Hermosillo, Sonora, Mexico. Samples were weighed, assigned a unique bar code and logged into the laboratory tracking system. Samples were then dried and each sample was crushed to >70% passing a 2mm screen. A 250g sub-sample was collected for pulverising by ring and puck to >85% passing sub 75µm. The 250g sample pulps were then dispatched via courier to BVL in Vancouver, Canada for analysis.

Samples drilled by Puma were analysed by the technique MA200 with 0.25g samples subject to a four-acid digest followed by multi-element ICP-MS analysis producing results for silver and base metals. This technique is considered a total digest for all relevant minerals and has a very low detection limit.

The analytical technique, MA300, was used for all samples drilled by Azure, comprising 0.25g samples subject to a four-acid digest followed by multi-element ICP-ES analysis producing results for silver and base metals. This technique is considered a total digest for all relevant minerals.

Over-limit assays for both Azure and Puma drill samples were re-analysed by:

• Method MA370 (0.5g samples digested by 4 acids and analysed by ICP-ES for base metals grading >1%);
• Method GC816 (by Classical Titration for zinc grading >20%);
• Method GC817 (by Classical Titration for lead grading >10%);
• Method FA530 (by fire assay with gravimetric finish for silver grading >200ppm).

Density

Azure collected a total of 809 density measurements from drill core samples with 120 samples sourced from within the boundaries of the Mineral Resource and the remainder collected from within lower-grade and waste zones to provide a good range of material for density determinations.

Each sample was dried and measured for length and diameter. The diameter was measured with callipers at three points along the length of the core sample and averaged. The volume of the core sample was calculated and the sample was weighed. Azure calculated the density for the core samples by dividing the dry weight of the sample by its volume.

A total of 57 of the 809 samples were sent to Bureau Veritas Laboratories in Hermosillo, Mexico for confirmatory density measurements by immersion of waxed core (method SPG03). The results of the immersion method were compared to densities calculated by Azure. There was no discernible difference between the calliper and immersion methods.

A multivariate regression formula from dry bulk density determinations to Zn% and Pb% was developed for use across the deposit for areas of varying zinc and lead grades. This formula combined the measured density of samples that were subsequently sent for assay.

The multivariate regression formula was also used to analyse the results of the dense media separation testwork.

Metallurgical Test Results

Metallurgical testwork on Oposura mineralisation was conducted at Blue Coast Research (BCR) laboratories in Vancouver, Canada. Metallurgical testwork comprised Dense Media Separation, staged and locked cycle flotation tests, and physical property tests.

Dense Media Separation (DMS) testwork

In several parts of the Oposura mineralised system, thick mineralised intersections comprise narrow bands of very high-grade mineralisation separated by intervals of lower grade or waste material. Azure’s studies indicate that some of these thick mineralised zones may be more suitable to a “bulk” mining approach rather than “selective” mining, thereby reducing unit operating costs and maximising resource recovery.

Testwork was undertaken to assess the suitability of DMS technology to upgrade the grade of the “bulk” mined material by rejecting low grade and waste material while retaining the mineralised material, ahead of entering the milling circuit. DMS is most effective in upgrading ore when there are distinct density differences between mineralised material and waste rock, and this is the case at Oposura.

DMS testwork was initially conducted on rock samples taken from historical underground mine workings. DMS testwork was then extended to include tests on individual drill hole intersections of varying combined zinc and lead grades and zinc to lead grade ratios. These tests were used to ascertain the density at which the DMS circuit could optimise ore recovery and waste rejection.

Follow-up DMS testwork was then conducted on a bulk master sample averaging 6.4% Zn, 4.2% Pb and 28.8g/t Ag that was prepared from the drill core of eleven Mineral Resource drill holes. This testwork showed that an upgrade in both zinc and lead grades of 34% could be achieved with an overall metal recovery of 95%, while rejecting waste material amounting to approximately 30% of the mass entering the DMS circuit.

The positive results achieved from this metallurgical testwork demonstrate that crushing, screening and DMS processing prior to a standard sulphide flotation treatment support the option of utilising DMS technology at Oposura.

Flotation testwork

Staged flotation testwork was conducted on individual drill hole intersections of varying combined zinc and lead grades and zinc to lead grade ratios.

Follow-up staged and locked cycle flotation tests were then conducted on the bulk master composite comprising intersections from several drill holes across the Mineral Resource. The laboratory split the bulk master composite into several sub-samples to allow multiple batch and locked cycle flotation tests to be undertaken.

The staged flotation tests conducted on the bulk master composite were used to optimise primary and secondary grind sizes, flotation times and reagent regimes for the separate zinc and lead concentrates. A locked cycle test was then conducted on the bulk master composite to more closely simulate a continuously operating flotation circuit.

The result of the locked cycle test was a zinc concentrate grading 57.2% Zn with a zinc recovery of 85.6% and a lead concentrate grading 61.4% Pb at a lead recovery of 84.0%. Silver recovery to the lead concentrate was 67.1% Ag at a concentrate grade of 323.8 g/t Ag (10.4 oz/t Ag).

Both the zinc and the lead concentrate grades achieved in the locked cycle test were above the typical industry benchmark grades quoted respectively for zinc and lead concentrates of 53% zinc and 60% lead. A regression line from the batch locked cycle test results back to the benchmark concentrate grades was calculated to interpolate the zinc and lead recoveries. A zinc recovery of 87.5% was interpolated at the benchmark concentrate grade of 53% zinc and a lead recovery of 85% was interpolated at the benchmark concentrate grade of 60% lead.

Multi-element assays were conducted on the separate zinc and lead concentrates produced from the locked cycle test conducted on the bulk master composite. These assays indicated that deleterious elements were not present at levels that would cause concern or penalties from smelters.

The testwork successfully demonstrated that clean, commercial grade concentrates could be produced at high metallurgical recoveries and thereby has eliminated a potential major project risk.

Physical Properties testwork

Physical properties testwork comprised the establishment of crushing, grinding and abrasion indices.

The crusher and ball mill work indices are a measure of the amount of power required respectively to crush and grind mineralisation and are quoted in kilowatt hours per tonne (kWhr/t). The higher the number, the more power that is required to crush and grind the mineralisation prior to flotation.

The abrasion index is a measure of weight loss of metal when in contact with mineralisation. It is used to select materials for items such as mill liners and chutes and to determine how often these items need to be replaced based on wear rates.

All three of the indices are within the typical range of expected values for mining projects, and power requirements and wear rates are not expected to be out of the ordinary.

Mining

The overall geometry of East Zone and West Zone Mineral Resources is favourable for potential extraction using a combination of conventional open pit and underground mining techniques. This geometry also allows the resources to be easily be accessed from surface, providing exceptional mine scheduling flexibility.

East Zone and West Zone resources crop out at surface in both zones. The extremities of both resource zones could be accessed by a maximum of 200m (East Zone) and 250m (West Zone) of lateral underground mine development. This mine development could be undertaken within mineralisation due to the overall shallow dipping nature of the mineralised horizon. Mining could be undertaken contemporaneously by open pit and underground methods in both East Zone and West Zone.

The Mineral Resources include distinct areas of higher grade mineralisation that could be scheduled to suit economic circumstances and/or product marketing options.

Oposura mountain slopes at approximately 20 to 25 degrees in the vicinity of East Zone and at approximately 30 to 40 degrees in the vicinity of West Zone. Near surface mineralisation would be amenable to open pit techniques in both East and West Zones. Fresh rock commences at or very close to surface. An historical small-scale open pit was mined at the East Zone. Surveys undertaken in 2017 show this open pit to be approximately 30m in length, with a bench height of approximately 12m and a pit wall angle of approximately 60 degrees.

The maximum depths below surface of the Mineral Resources are approximately 120m (East Zone) and 140m (West Zone). Maximum vertical capital development for ventilation and emergency egress would be limited to these depths. The in-situ rock stress is expected to be low corresponding to the shallow depth of the resources below surface. An historical underground level drive, Tunnel D, in East Zone has a maximum depth below surface of approximately 100 metres. The backs and walls of this level drive are in good condition and have limited ground support.

Historical development drives and room and pillar stopes remain intact and accessible. These stopes were surveyed in 2017 using digital laser techniques. The extraction ratio of the historical room and pillar stopes was measured to be 95%. A room and pillar underground mining method is considered appropriate due to the geometry of the resources.

The sub-horizontal dip of the mineralised zones results in vertical thickness being very similar to true thickness. The vertical thicknesses of individual sulphide mineralisation lenses average 7m in East Zone and 3m in West Zone, with maximum vertical thicknesses of 20m in East Zone and 10m in West Zone. These thicknesses would make both resource zones amenable to modern mechanised open piand underground mining techniques.

The historical workings are located at or below the lowest resource elevation and show no signs of groundwater ingress. Groundwater ingress is not expected to adversely affect potential mining development or stoping.

Infrastructure

The Oposura project area is located approximately 150km from the capital of the state of Sonora, Hermosillo (population of approximately one million) and is accessed from Hermosillo via a two-lane bitumen highway (National Highway 14).

The nearest bulk commodity export facility is located at the Port of Guaymas. Guaymas is located approximately 330km by road via Hermosillo from the Oposura project. A four-lane concrete highway (National Highway 15) exists between Hermosillo and the Port of Guaymas. Bulk mineral concentrates are currently exported through the Port of Guaymas by several mining companies including Grupo Mexico, BHP Billiton and Freeport McMoran.

A power supply option study undertaken in 2018 showed that power for the project could be obtained from either 230kV or 32kV high voltage transmission lines that pass within 10 kilometres of the project.

Wireless voice and high-speed data communication currently exists at the project site via line of sight to a communications tower located in the nearby town of Moctezuma (population 5,000).

Hydrological studies completed in 2018 identified potential aquifers within the mining concessions. Two bores located on a privately-owned ranch in the Moctezuma river valley were pumped tested as part of the study. Based on the pump test results, the average flow from each of these bores is approximately one million cubic metres (tonnes) of water per annum, which is considered sufficient for a project corresponding to the scale of the Mineral Resources.

Surface rights agreements are in place with the owners of the two private ranches that cover the project area and mineral concessions. The surface rights agreement areas are expected to be sufficient for locating access roads, infrastructure, mining works, process plant and tailings facility required for a project corresponding to the scale of the Mineral Resources.

Environment

The project area is covered by two privately-owned cattle ranches and surface access rights agreements are in place with both owners.

The previous owners of the Oposura project, Puma, applied for and received environmental approval for the clearance of a surface area of up to 5 hectares for the development of a small-scale mine, process plant and tailings facility for Oposura. This environmental approval has been transferred from Puma to Minera Piedra Azul SA de CV (a wholly-owned subsidiary of Azure).

Environmental surveys and studies over the Oposura project area were independently conducted in 2017 and 2018. These surveys indicate that there are no flora or fauna impediments to potential development of the project.

Geological Estimation Domains

For the Mineral Resource estimation control, four mineralisation domains and four low-grade halo (non-Mineral Resource) domains were identified for East Zone, while for West Zone five mineralisation and five low-grade halo (non-Mineral Resource) domains were grouped into two statistical domains based on statistical and geometric similarities. The domains were identified by geological and spatial continuity, as grade-boundary analysis of zinc, lead and combined zinc + lead showed continuous distributions. The volumes of the domains were modelled using conventional sectional interpretation followed by digital wireframing methods. The wireframe models were reviewed and accepted by Azure and then used to code a digital block model as follows:

• Mineralisation: defined using a combined nominal ≥ 1.5% Zn%+Pb% grade cut-off.
• Low grade halos (not reportable as Mineral Resources): defined as being any coherent zones enveloping the mineralisation wireframes below the mineralisation modelling cut-off. This allows a more robust measure of dilution around the mineralisation for mine studies.

Sub-blocks were included in the block model to closely match the estimation domain boundaries and the topographic surface and provide adequate resolution on volumes.

Domains were estimated using composites from each estimation domain. For East Zone, the semivariogram models from the same domain were used, for West Zone, the semi-variogram model from the statistical domain grouping was used.

Estimation and Validation Methodology

Quantitative Kriging Neighbourhood Analysis was undertaken using SupervisorTM V8.8 software to assess the effect of changing key Kriging neighbourhood parameters on block grade estimates. Kriging Efficiency and Slope of Regression were reviewed for a range of block sizes, minimum and maximum samples, search dimensions and discretisation grids.

Ordinary Kriging (OK) was adopted to interpolate grades into cells for the mineralised domains and low-grade halo domains around the mineralisation, inside which the composites for the high-grade domain were removed.

The block size appropriately reflects the dual open-pit and underground scenarios, and the drill hole spacing, which varies from 25m – 50m sections along strike. Intra-section pierce points are evenly spaced in predominance and vary from 10m – 25m in the eastern parts of East Zone, to 40m – 60m in other parts of East Zone and West Zone.

The estimate employed a four-pass search strategy to improve the local grade estimate. The first pass was equal to 2/3 the range of the largest variogram model structure for each variable in each domain, honouring the anisotropic ratios orthogonally. The second pass equated to 100% of the ranges, the third 150% and the fourth 200%. Following the fourth estimation pass, the Sichel mean of the composite within the statistical domain was assigned for Zn%, Pb% and Ag g/t for each domain. The mean was assigned for blocks with unestimated sulphur grades.

All geological modelling and grade estimation was undertaken using Surpac^TM V6.6 software.

Reporting Cut-off Grade

The Mineral Resources were reporting above a 1.5% zinc equivalent (ZnEq) grade based upon benchmark Mexico mining and processing costs for the proposed scale of operations, current metallurgical testwork, international benchmark smelting and refining charges, and metal pricing as at the end of May, 2018.

More details are given in the JORC Table 1 Section 3 appended to this ASX release.

Grade Caps

To reduce the spatial influence of extremely high-grade samples and based on outliers from the histogram and probability plots, the 1.0m long estimation composite grades were capped to the following maximum values prior to block grade estimation:

Criteria used for Classification

The Mineral Resource has been classified based on the guidelines specified in The JORC Code. The classification level is based upon an assessment of geological understanding of the deposit, geological and mineralisation continuity, drill hole spacing, sampling and assaying processes, QC results, search and interpolation parameters, and an analysis of available density information.

The following approach was adopted:

• Consider the classification of Indicated Mineral Resources for large zones of contiguous blocks where consistent, coherent zones:
  • Average drill spacing nominally 25m in East Zone and no more than 50m in West Zone
  • Estimation was undertaken in search passes 1 and 2
  • Number of samples was near the optimum of seven
  • Slope of regression > 0.5.

Reasons for the classification are:

• Geological continuity and confidence in the geological model principally is high.
• Domains one and two of East Zone are drilled at a nominal spacing of 25m – 35m. The drillhole spacing and the estimation quality indicators for these domains are clearly higher than domains three and four, therefore the classification is reflective of these observations.
• Although thickening and higher-grades close to fault zones is evident, particularly in East Zone, coverage of drilling generally reduces the impact of uncertainty on both grades and thickness.
• However, along the eastern margin of domain four of East Zone, the substantially thicker fault-proximal mineralisation and higher grades causes uncertainty regarding the estimate for this area and the domain generally. Therefore, despite tighter drill-spacing for this area of domain four than the rest of the domain, this uncertainty is reflected in an Inferred Mineral Resource classification.
• Fault thickening was less evident for West Zone, therefore the assessment of geological continuity for classification was simpler.

Modifying Factor Assumptions

In terms of key modifying factors, it has been assumed that the deposit could be exploited by conventional truck and shovel open pit mining and by conventional mechanised underground room and pillar mining, with ore processed by conventional flotation processes after crushing, dense media separation and milling and with the metallurgical recoveries indicated by preliminary metallurgical test results. Using these assumptions and current commodity prices for zinc, lead and silver, a block reporting cut-off grade of 1.5% Zinc Equivalent was selected as a reasonable basis for reporting the Mineral Resource.

Given the long history of mining in the Sonora region of Mexico, and that there is a current environmental approval in place for a small-scale mining and processing operation at Oposura, the Company believes there are reasonable expectations that a mine and processing operation corresponding to the scale of the Mineral Resource could be developed should (or when) future studies result in the definition of an Ore Reserve.

BACKGROUND

The Mineral Resource estimate for the East and West Zones of the Oposura deposit is located wholly within the ‘Oposura’ project area which comprises 10 mineral concessions. These concessions are 100% owned by a Mexican entity named Minera Piedra Azul SA de CV (MPA), which is a whollyowned subsidiary of Azure Minerals Limited (Azure).

On 11 August 2017, MPA executed an agreement with Grupo Minero Puma SA de CV (Puma) whereby MPA agreed to acquire 100% ownership of the Oposura concessions by paying Puma US$1,500,000 and with Puma retaining a residual Net Smelter Return royalty (NSR) of 2.5%.

MPA has paid to Puma the US$1,500,000 in consideration for the acquisition of the Oposura Project and has entered into a royalty agreement with Puma covering Puma’s retained 2.5% NSR royalty. Azure has now acquired 100% legal and beneficial interest in the Oposura project.

-ENDS-

For further information, please contact:

or visit www.azureminerals.com.au

Competent Person Statement:

Information in this document that relates to Sampling Techniques and Data, and Reporting of Exploration Results (sections 1 and 2 of Table 1 of the JORC Code) for the Oposura East and West deposit Mineral Resource estimates is based on information compiled by Dr Neal Reynolds, who is a Member of the Australian Institute of Geoscientists. Dr Reynolds is employed as a Principal Geologist and Director and is a full-time employee of CSA Global Pty Ltd.

Information in this document that relates to Estimation and Reporting of Mineral Resources (section 3 of Table 1 of the JORC Code) for the Oposura East and West deposit Mineral Resource estimates is based on information compiled by Dr Matthew Cobb, who is a Member of both the Australian Institute of Geoscientists and the Australasian Institute of Mining and Metallurgy. Dr Cobb is employed as a Principal Geologist and is a full-time employee of CSA Global.

Dr Reynolds and Dr Cobb have sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity being undertaken to qualify as Competent Persons as defined in the 2012 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’.

Dr Reynolds and Dr Cobb consent to the inclusion in the report of the matters based on their information in the form and context in which it appears.

Original Article: http://azureminerals.com.au/wp-content/uploads/2018/07/180704.pdf