Sampling returns grades up to 50% zinc, 34% lead & 448g/t Ag

HIGHLIGHTS:

• Azure has acquired 100% ownership of the advanced-stage, high-grade zinclead-silver Oposura Project
• Previous drilling and exploratory underground mine development defined extensive zones of massive sulphide-hosted zinc-lead-silver mineralisation
• Sampling by Azure confirms high-grade mineralisation with many samples grading greater than 40% combined zinc + lead (with a peak of 65% Zn+Pb)
• High-grade material is immediately accessible via existing mine workings
• Project holds significant potential for additional exploration success
• Exploration, metallurgical testwork and other development activities are in progress

Azure Minerals Limited (ASX: AZS) (“Azure” or “the Company”) is pleased to announce that it has acquired immediate 100% ownership of the Oposura Zinc-Lead-Silver Project (“Oposura”), located in the northern Mexican state of Sonora.

Oposura is an advanced-stage project containing high grade, massive sulphide-hosted, zinc, lead and silver mineralisation, and this acquisition clearly delivers on Azure’s strategy of securing its next flagship project.

Azure’s Managing Director, Mr Tony Rovira said, “Throughout 2017, Azure has had the clear focus to acquire the next flagship project for the Company. This was all about getting the right project for the right deal, and with this acquisition we have done just that. Projects of this quality are rare and keenly sought after, and I’m pleased that we have succeeded in acquiring the advanced stage, precious and base metal project that we’ve been seeking.

“The Company has been working on the property and liaising closely with the vendors for the past several months to ensure the quality of this project, and I thank them for their cooperation. We have gained a lot of knowledge of the project during the due diligence investigations and we’ll build upon this initial momentum by immediately commencing a resource drill-out program, while also undertaking activities such as metallurgical testwork, various mine development studies, and more widespread exploration.

“I’m expecting that the rest of 2017 and the years ahead will be busy and very rewarding as we advance our exciting new project.”

Exploration and assessment work by two major companies was carried out between the 1940s to 1970s, including exploratory underground mine development, trial stoping for bulk sampling and metallurgical testwork, and surface and underground diamond drilling. This work demonstrated that the mineralised system extends over an area of 1,400m x 400m. The project has been privately owned since that time with little further activity undertaken.

While approximately 100 diamond core holes have been drilled in the deposit and an historical resource estimate was undertaken in the late 1970s, the results of these activities do not conform to current JORC standards and therefore cannot be reported by Azure until further confirmatory work has been completed.

As part of Azure’s technical due diligence program, sampling of the mineralised zone was conducted within the underground mine workings, with most samples returning high grades of zinc, lead and silver mineralisation (see Appendix 1: Table 2 for full details).

Many of the samples returned zinc and lead assays above the upper limit for the ore grade analysis method (>40% zinc and >10% lead), requiring these samples to be re-submitted for further analysis by the “concentrate grade” analytical method (see Table 1 for some of these highgrade results).

Also, the presence of significant silver mineralisation is an added bonus that is expected to provide additional value to the project.

Table 1: Selected assays of massive sulphide mineralisation from within Oposura Mine

Key Terms of the Acquisition

Azure executed an agreement on 11 August 2017 to acquire immediate 100% ownership of the ten tenements that together comprise the Oposura Project, by paying US$1,500,000 (plus applicable value added taxes) to the vendor Grupo Minero Puma, a private Mexican family company. A Net Smelter Return (NSR) royalty of 2.5% on future production is payable to the vendors. There are no back-in, earn-back or other rights relating to the Oposura Project.

Project Summary

The 690 hectare Oposura property is located 150km by road northeast from Hermosillo, the capital city of Sonora where Azure has its Mexican-based exploration and administration office, and 30km by road to the southwest of the town of Moctezuma (see Figure 1), which has a population of about 5,000.

The project is well served by existing infrastructure. Access to the property is via the dual lane, bitumen Hermosillo-Moctezuma highway (National Highway 14) and a good condition 10km gravel road. A fibre optic cable and high voltage transmission lines pass within 12km of the project. Voice and data communications are already available via line of sight wireless connection to a communications tower located 10km away in Moctezuma. Streams are present within the project area well below the level of existing mine workings, and two major river valleys are located within 10km of the project area.

Oposura is situated within the Laramide Copper Trend which extends from Arizona to central Mexico. This highly mineralised province hosts many porphyry, skarn, carbonate replacement and epithermal mineral deposits, including the Mesa de Plata and Loma Bonita silver-gold deposits on Azure’s 100%-owned Alacrán Project, in which Teck Resources is earning a 51% interest (see Figure 2).

Oposura comprises an overall mineralised zone hosting massive, banded, and disseminated sulphides (predominantly sphalerite and galena) containing high grade zinc, lead and silver mineralisation in an interbedded sequence of limestones and volcanic tuffs (see Figure 3). The mineralised zone forms a laterally extensive, relatively flat-lying horizon influenced by minor smallscale folding and faulting.

Exploration and exploratory mining was carried out in the period 1940s to 1970s by the Anaconda Copper Company and the Mexican company Industrias Peñoles. This included the development of more than 500m of mine tunnels within the ore zone, small-scale trial stoping to provide bulk samples for metallurgical testwork, and 60 surface and 25 underground diamond drill holes. Outside of the Oposura Mine, numerous artisanal mine workings were developed on the outcropping zinc-lead-silver mineralised zone for exploratory and small-scale mining purposes.

The underground workings of the Oposura Mine are easily accessible (see Figures 5 & 6), dry, self-draining and well ventilated. Notwithstanding that these workings were developed 40 years ago, they remain in excellent condition with only a few internal timbers used to provide roof support. Costs to maintain access to the historical mine workings are negligible.

The historical work defined a mineralised horizon extending east-west for approximately 1,400m. Mineralisation outcrops along the southern side of a line of hills and extends horizontally for at Level 1, 34 Colin Street, West Perth, Western Australia, 6005 | T: +61 8 9481 2555 | F: +61 8 9485 1290 www.azureminerals.com.au | ABN: 46 106 346 918 least 400m to the north. The maximum depth to the mineralised zone beneath the hills is approximately 100m. The overall mineralised zone is up to nine metres thick, averages about three metres in true width, and demonstrates good continuity of width and grade.

Extensive channel sampling of the massive sulphide mineralisation and adjacent hanging wall and footwall zones has recently been completed within the underground workings. A total of 95 samples were collected with individual sample lengths varying between 0.8m to 2.0m. Assay results and sampling details are tabled in Appendix 1.

Assays confirm that the massive sulphide zones contain very high grades of zinc, lead and silver, typically being greater than 10% Zn, 10% Pb and 40g/t Ag. Separate samples returned maximum values of 49.6% Zn, 34.1% Pb and 448g/t Ag.

Furthermore, many samples from the massive sulphide zones returned copper grades in the range of 0.5% to 1.0% Cu, up to a maximum of 2.6% Cu. The copper mineral is chalcopyrite.

In addition to the mineralisation already identified in the Oposura Mine, the project demonstrates the following upside potential (see Figure 4):

• extensions of the Oposura mineralised zones further to the north (Oposura Norte);
• repetitions of mineralisation in the faulted down-thrown block to the west (Oposura Oeste);
• shear zones containing silver-rich quartz veining in the east of the property at Candelaria;
• precious and base metal mineralisation observed in and around old mine workings in the west of the property at the Mina Blanca prospect.

Work Program

Azure has commenced an intensive work program to determine the economic potential of Oposura as quickly as possible. Work to be undertaken over the next 12 months includes:

Geophysics

• LiDAR and aerial photographic surveys – COMPLETED
• Aeromagnetic and radiometric survey – COMMENCING SHORTLY

Geology

• Sampling and surveying of the underground workings of the Oposura Mine – COMPLETED
• Sampling and surveying of artisanal underground mine workings – COMMENCED
• Mapping and sampling overall project area – COMMENCED

Drilling

• Close-spaced drilling for mineral resource estimation purposes – IN PLANNING
• Exploration drilling for extensions and repetitions of mineralised zones – IN PLANNING

Development Studies

• Mineral resource estimation
• Metallurgical testwork – COMMENCED
• Preliminary mining, environmental and infrastructure studies – COMMENCED

-ENDS-

For further information, please contact:

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.

Original Article: http://azureminerals.com.au/wp-content/uploads/2017/08/170815-Acquisition-of-Oposura-Zinc-Lead-Silver-Project-1.pdf