HIGHLIGHTS ALACRÁN PROJECT

• Resource drill-out of Mesa de Plata silver discovery completed with maiden JORC Mineral Resource Estimate due shortly
• New gold-rich zone identified at Loma Bonita with drill holes intersecting significant near-surface gold and silver mineralisation
  • 20.0m @ 1.52g/t Au & 62g/t Ag from surface in MDPD-007
  • 7.5m @ 1.05g/t Au & 130g/t Ag from 2.0m in MDPD-008
• Diamond drill program continuing over 600–800m extent of Loma Bonita ridge
• New northern area of high grade silver identified at Mesa de Plata Norte
  • Strong surface sampling results including rock chips up to 1,902g/t Ag
  • Drilling to commence in coming weeks

PROMONTORIO PROJECT

• Geophysical data evaluation and interpretation completed with porphyry copper targets identified
• Diamond drilling program commenced with three holes completed to date and a fourth in progress
• Drilling continues

Azure’s Managing Director, Mr Tony Rovira commented: “We have made excellent progress during the last quarter, in particular the completion of the Mesa de Plata resource drill out. The Mineral Resource is in the final stage of estimation and is expected to be released shortly. Azure has rapidly progressed Mesa de Plata from first discovery in September 2015 and we are confident that the resource estimate will demonstrate the significance of the Project.

“However this is only the first step forward in what we believe will be a gold and silver project of some significance.

“We have been delighted that the initial drilling at Loma Bonita, located only a few hundred metres from Mesa de Plata, is indicating a potentially large gold and silver mineralised zone. Drilling will continue at Loma Bonita and nearby areas throughout the coming quarter.”

ALACRÁN PROJECT

(Azure can earn 100% ownership from a subsidiary of Teck Resources Limited (“Teck”), subject to an underlying back-in right retained by Teck and a 2% NSR retained by Grupo Mexico)

Further strong progress was made on the Alacrán Project during the quarter, with the resource drilling completed at Mesa de Plata and new areas of mineralisation identified via sampling and drilling at Mesa de Plata Norte and Loma Bonita.  

MESA DE PLATA RESOURCE DRILLING

During the Quarter Azure completed the drill-out of the Mesa de Plata silver discovery, and commenced the calculation of a maiden Mineral Resource Estimate, which is due for release in May.

The resource drill-out consisted of two Reverse Circulation (RC) and one diamond core drilling programs, totalling 61 RC holes and 5 diamond holes for a total of 6,350m (see Figure 2 for drill hole locations). Drill hole spacing was on a 50m x 50m pattern covering a northwest-southeast extent of 1,000m and a width of up to 200m. All RC holes were drilled vertically to depths of about 90m and diamond holes were also drilled vertically to depths of between 75m and 205m.

Silver mineralisation at Mesa de Plata is hosted in silicified volcanic rocks and residual quartz (vuggy silica) which crop out extensively along the ridge. Drilling has confirmed that mineralisation starts at surface with true thicknesses up to 60m, and extends throughout the Mesa de Plata ridge with excellent internal continuity of mineralisation.

The central zone of high grade silver mineralisation, which averages greater than 200g/t Ag over a vertical thickness of approximately 20m, extends over an area of approximately 400m x 150m, and is located at or very near to surface. This is surrounded and underlain by, a larger zone of moderate grade silver mineralisation (averaging 40-80g/t Ag) up to 60m thick, extending over an area of about 1,000m x 150-200m (ASX: 25 January 2016).

The overall mineralised body dips gently to the northeast, and is confined to the southwest (up-dip) and northeast (down-dip) by erosional contacts forming valleys. 

Metallurgy

Drilling to collect large diameter core samples for an advanced metallurgical testwork program of the mineralised zone at Mesa de Plata was planned for the March Quarter. However this activity was postponed to enable the exploration drilling program on the Loma Bonita prospect to be undertaken.

EXPLORATION DRILLING

Located between 200m and 500 meters to the east of the Mesa de Plata silver discovery lie the Loma Bonita and Puerto del Oro prospects. Outcrop occurs as sub-horizontal to shallow northdipping volcanic strata consisting of vuggy silica with zones of siliceous hydrothermal breccia. Anomalous to high grade gold and silver mineralisation is present at surface throughout the 800m- 1,200m long Loma Bonita Ridge and presents a large and highly prospective target zone for drilling.

Exploration diamond drilling recommenced during the quarter with 11 holes completed to date (MDPD-006 to 016) for a total of 1,962.9m. Targets tested have included Puerto del Oro, Loma Bonita and the northeast extension of the Mesa de Plata silver zone (see Figure 3).

Azure believes Loma Bonita has the potential to host a large system of gold and silver mineralisation, and further diamond drilling is underway on a number of high priority targets.

Drill Hole MDPD-006:

MDPD-006 is located near Puerto del Oro approximately 450m southeast of Mesa de Plata. The hole was designed to test coincident chargeability and resistivity anomalies identified in Azure’s Induced Polarisation (IP) survey (ASX: 2 July 2015). These geophysical anomalies are situated at +300m below surface.

The hole was drilled to a depth of 539m with varying intensities of silicification, brecciation and quartz stockwork veining. Variable, and in some locations, significant quantities of disseminated pyrite are contained within the breccia matrix in the lower 300m of the hole, which is interpreted to explain the IP anomalies.

Assays demonstrate significant geochemical anomalism in copper, molybdenum, gold and silver at various positions within the hole. Significant mineralised intercepts and maximum values are shown in Table 1 (ASX: 17 March 2016).

Table 1: Significant mineralised intercepts and assays from MDPD-006

Drill Hole MDPD-007:

This hole is located mid-way along the north-south trending Loma Bonita ridge in an area characterised by outcropping vuggy silica, silicified volcanic rocks and siliceous hydrothermal breccias containing significant gold and silver assays (ASX: 16 & 21 October 2015). MDPD-007 was drilled vertically due to the sub-horizontal to shallow northeast dip of the strata. 

The upper 20m of the hole is within the oxide zone, characterised by strongly weathered rocks containing consistent gold and silver mineralisation (see Table 2) (ASX: 17 March 2016).

Table 2: Significant gold and silver intercepts from MDPD-007

Drill Holes MDPD-008, 009 & 010:

On the northern part of the Loma Bonita ridge, the sub-horizontal strata is cut by several vertical north-easterly trending “ribs” of siliceous breccia. At surface these structures are up to 40m in width and surface sampling returned significant gold and silver assays (ASX: 16 & 21 October 2015).

Three holes, MDPD-008, 009 and 010, were drilled to test the surface gold and silver anomalism and the vertical structures. All holes were drilled along a section orientated approximately northnorthwest (290o ) to drill perpendicular to the strike of the silicified structures.

In the near-surface zone, all three holes intersected significant gold and silver mineralisation (see Table 3) hosted in vuggy silica and siliceous hydrothermal breccia. The entire length of hole MDPD- 009 was drilled in strongly anomalous silver mineralisation, returning 200.2m @ 42g/t AgEq.

Table 3: Significant gold and silver intercepts from MDPD-008, 009 & 010

Each hole demonstrates intense weathering and oxidation from surface to 50m-80m downhole, with the rock being very hematitic (iron-rich) in this zone. Variable amounts of disseminated pyrite (iron sulphide) mineralisation are present in each hole. The rocks mostly consist of hydrothermal breccia hosting fragments of silicified andesite and vuggy silica. The intensity of the silicification and brecciation in these holes is strong (ASX: 18 April 2016).

Drill holes MDPD-011, 012 & 016:

These holes were drilled to follow-up the strong gold and silver mineralisation intersected in hole MDPD-007. All holes are complete and assays are awaited. If further gold and silver mineralisation s identified in these holes, Azure will initiate a more extensive drilling program to define the extents of the mineralisation in this area.

Drill holes MDPD-013, 014 & 015:

These holes were collared on the northeastern flank of the Mesa de Plata mineralised zone to test for extensions of the silver mineralisation in this direction. All holes have been completed and assays are awaited.

PROMONTORIO PROJECT

(Azure 100%; Kennecott may earn up to an 80% interest)

During the quarter, Kennecott Exploration Mexico S.A. de C.V. (“Kennecott”) continued its evaluation and interpretation of all geophysical, geochemical and geological data, and a drilling program was designed to test for porphyry-related copper mineralisation.

The diamond drilling program designed to test these targets commenced and to date a total of three holes have been completed and a fourth hole is in progress for a total of 2,950m.

-ENDS-

Information in this report that relates to Exploration Results is based on information compiled by Mr Tony Rovira, who is a Member of The Australasian Institute of Mining and Metallurgy. Mr Rovira is a full-time employee and Managing Director of Azure Minerals Limited. Mr Rovira has sufficient experience which is relevant to the styles of mineralisation and types of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2012 Edition of the “Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves”. Mr Rovira 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 announcement.

Original Article: http://www.azureminerals.com.au/azs//assets/2016/04/March-Quarterly-Report.pdf