Latest results support future resource increase

High-grade, near-surface mineralisation intersected in the middle of the Central Zone:

• OPDH-173: 12.0m @ 7.7% Zn+Pb from 44.00m; including 4.1m @ 12.5% Zn+Pb

• OPDH-178: 9.5m @ 18.9% Zn+Pb from 23.05m; including 6.2m @ 26.6% Zn+Pb

Drilling also extends high-grade mineralisation from the East Zone into the Central Zone:

• OPDH-159: 4.8m @ 19.3% Zn+Pb & 122g/t Ag from 107.05m

• OPDH-171: 4.4m @ 20.4% Zn+Pb & 294g/t Ag from 99.05m

• OPDH-177: 4.6m @ 36.9% Zn+Pb & 138g/t Ag from 107.55m

Commenting on these drill results, Azure’s Managing Director, Mr Tony Rovira said: “These latest, high-grade, massive sulphide drill intersections from the sparsely drilled Central Zone confirm that this area has the potential to significantly increase Oposura’s resource base.

“They continue to build on the very positive results from the Oposura Scoping Study and confirm potential to extend the mine life and further improve the already impressive project economics.”

Azure Minerals Limited (“Azure” or “the Company”) (ASX: AZS) is pleased to announce that the Company’s drilling of the Central Zone at its 100%-owned Oposura Project (“Oposura” or “the Project”), located in Sonora, Mexico (see Figure 1), has intersected high-grade zinc, lead and silver mineralisation.

Several of these mineralised intersections are situated in the middle of the Central Zone, located more than 200 metresfrom the East Zone and West Zone resource boundaries. This confirms excellent potential to expand the current Oposura Mineral Resource into this previously under-explored area.

Additionally, Azure completed numerous drill holes outside of the East Zone resource boundary which intersected wide zones (average true width of >4.0m) of massive sulphides containing high grade zinc and lead mineralisation and very high silver grades, mostly >100g/t Ag. These drill intercepts have extended the mineralised system by more than 100 metres towards the west, into the Central Zone.

Given the positive Scoping Study results which identified that similar grade, near-surface mineralisation will be exploited by low-cost open pit and underground mining techniques, these new Central Zone drill intersections are expected to increase the Mineral Resource, extend the current mine life of 5.3 years and have a very positive impact on the overall Project economics.

Azure recently announced positive results from its Scoping Study into developing a mining and processing operation at Oposura (refer ASX announcement dated 15 October 2018).

The Study delivered a Life of Mine (LOM) EBITDA of A$237 million, NPV8 (pre-tax) of A$112 million and an IRR (pre-tax) of 76% over a 5.3 year mine-life, confirming Oposura as an economically and technically robust, high-margin project.

Underpinned by near-surface, high-grade mineralisation, simple and efficient open pit and underground mining methods and excellent metallurgical characteristics, Oposura is expected to deliver low operating and capital costs, high-value concentrates, strong operating cashflows and a payback period of about 16 months. Importantly, the Company expects a C1 cash cost (per pound of payable zinc production) of US$0.42/lb, positioning the Project in the lowest quartile of world zinc producers.

Importantly, the identification of additional mineralisation and increased mineral resources will extend the mine life and further improve the project’s already positive economics. The drill program currently in progress has three objectives:

1. Confirm the presence of mineralisation within the Central Zone and demonstrate potential to join the East and West Zones together into one significantly larger deposit;

2. Close-spaced resource extension drilling in the eastern part of the Central Zone to follow-up very high-grade mineralisation intersected around Tunnel D; and

3. Infill drilling within the East Zone mineral resource area to increase the confidence level of resources scheduled to be exploited early in the mine plan.

To date, drilling has completed 38 holes (OPDH-158 to 195) for a total of 3,116.85m and assay results have been received for 21 holes (up to and including OPDH-178).

Resource definition drilling defined two mineralised zones at Oposura – the East and West Zones. These are separated by the approximately 500m-wide Central Zone which has been only lightly tested by historical drilling undertaken during the 1950s and 1970s. Potential exists to expand the Oposura mineral resources into the Central Zone and also further to the north (see Figure 2).

Azure’s current drilling in the Central Zone included holes OPDH-173, OPDH-175 and OPDH-178 which are located approximately half-way between the East and West Zones, and are separated from each other by more than 100m. All three holes intersected near-surface zones of zinc and lead sulphide mineralisation.

OPDH-173 intersected a wide zone of massive and disseminated mineralisation, returning:

• 12.05m @ 6.06% Zn & 1.69% Pb (7.74% Zn+Pb) from 44.00m which includes:
  • 4.10m @ 10.48% Zn & 1.99% Pb (12.46% Zn+Pb) from 47.25m

OPDH-175 intersected a zone of disseminated sulphide mineralisation, returning:

• 6.60m @ 1.46% Zn & 1.17% Pb (2.63% Zn+Pb) from 26.10m

OPDH-178, located approximately 120m to the south of OPDH-173 and 140m to the southeast of OPDH175, intersected two zones of mineralisation, returning:

• 5.75m @ 1.38% Zn & 1.07% Pb (2.45% Zn+Pb) from surface
• 9.50m @ 15.10% Zn & 3.75% Pb (18.86% Zn+Pb) from 23.05m which includes:
  • 6.15m @ 21.96% Zn & 4.67% Pb (26.63% Zn+Pb) from 24.40m

Elsewhere in the Central Zone, drill holes OPDH-172 and OPDH-174 were specifically designed to test for a postulated upper mineralised horizon in the overlying Candelaria formation, but no significant mineralisation was intersected in these areas.

Importantly, the Company has successfully intersected additional very high grades of zinc, lead and silver mineralisation in the Central Zone near to the East Zone resource boundary. This is likely to extend the mineral resource to the west by more than 100m (see section in Figure 3).

Some of the better drill intersections from this eastern part of the Central Zone include:

Furthermore, drill hole OPDH-187, located about 25m west of hole OPDH-177 and 125m outside of the East Zone resource boundary, intersected approximately 3.5m of massive and banded sulphide mineralisation, indicating that the high-grade mineralisation in this area remains open to the north and west. Assay results for OPDH-187 are awaited.

The East Zone mineral resources that are closest to the drill holes discussed above are classified as JORC Inferred Resources. As part of the Preliminary Feasibility Study now being undertaken by Azure, infill drilling is being conducted to upgrade these resources to the Indicated category. Several of these holes intersected high grade mineralisation, including:

OPDH-163: 4.15m @ 21.93% Zn & 3.84% Pb (25.77% Zn+Pb) & 148g/t Ag from 97.40m

OPDH-165: 2.90m @ 18.78% Zn & 2.28% Pb (21.06% Zn+Pb) & 148g/t Ag from 95.90m

OPDH-166: 6.95m @ 33.49% Zn & 5.19% Pb (38.68% Zn+Pb) & 365g/t Ag from 68.15m

Previously reported resource drill holes (refer to ASX announcements dated 28 March and 22 May 2018) located in this same part of the East Zone resource returned the following intersections:

OPDH-053: 5.50m @ 17.48% Zn & 3.43% Pb (20.90% Zn+Pb) & 150g/t Ag from 95.15m

OPDH-111: 3.20m @ 12.99% Zn & 7.96% Pb (20.95% Zn+Pb) & 80g/t Ag from 97.10m

OPDH-127: 2.50m @ 24.84% Zn & 2.39% Pb (27.23% Zn+Pb) & 137g/t Ag from 89.10m

All of these drill holes are located near to the historical exploratory underground workings known as Tunnel D. The presence of this strongly mineralised horizon has also been confirmed by mapping and sampling within Tunnel D.

A cross section through the Tunnel D high grade zone is shown in Figure 3 and plans showing drill hole locations are shown in Figures 4 and 5.

-ENDS-

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or visit www.azureminerals.com.au

Competent Person Statements:

Information in this report that relates to Exploration Results for the Oposura Project is based on information compiled by Mr Tony Rovira, who is a Member of The Australasian Institute of Mining and Metallurgy and fairly represents this information. Mr Rovira has sufficient experience relevant to the style of mineralisation and type of deposit 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 Rovira is a full-time employee and Managing Director of Azure Minerals Limited and consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.

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 previously reported Mineral Resources 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 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: http://azureminerals.com.au/wp-content/uploads/2018/10/181024.pdf