Oposura Project (AZS 100%): Zinc-Lead-Silver

Oposura is located in the northern, mining-friendly Mexican state of Sonora. It’s an advanced-stage, high-grade, massive sulphide-hosted, zinc-lead-silver deposit that hosts JORC Mineral Resources of 3.1Mt @ 5.0% Zn, 2.7%Pb & 18g/t Ag.

The mineralised horizon is sub-horizontal with an aerial extent of approximately 1,500m x 400m and an average true thickness of about four metres.

The deposit remains open in several directions, providing excellent exploration upside, and further drilling has the potential to at least double the current mineral resource.

Scoping Study into a Mining and Processing Operation

A Scoping Study was published in October 2018 which highlighted Oposura as an economically and technically robust, high-margin project, underpinned by low operating and capital costs, high-value concentrate, strong operating cash flows and a 16-month payback period.

A major advantage of Oposura is that the geology is simple and the proposed mining and processing methods are industry standard.

The Study was based upon a 500,000tpa (1,500tpd) mining operation with an initial 6-year mine life which would generate an EBITDA of US$178M, an NPV of US$84M, and an IRR of 76%. Importantly, Oposura’s C1 cash costs were estimated to be in the lowest cost quartile of world zinc producers.

High grade, massive sulphide mineralisation at or very near to surface with ore grades of +20% Zn+Pb are expected to provide a quick payback period.

Mineralisation is easily accessible and geotechnically the ground conditions are excellent. Over an initial 6-year mine life, studies indicate that simple mining methods comprising shallow open pits for 3 years, followed by underground room and pillar extraction for a further 3 years, with a resultant +90% ore recovery.

Metallurgical testwork has demonstrated that a standard sulphide floatation processing route will produce clean, high-grade zinc and lead-silver concentrates.

Under the current mining and processing scenario, Oposura can achieve annual metal production of about 19,000 tonnes of zinc, 10,000 tonnes of lead and 145,000 ounces of silver in separate zinc and lead-silver concentrates. Concentrate grades of +53% zinc, +60% lead and +320g/t silver are projected, with both concentrates containing very low levels of deleterious elements. These attributes are expected to make the concentrates very attractive to end-users.

Information in this report that relates to Mineral Resources for the Oposura Project is extracted from the report “Azure Delivers Robust Initial Mineral Resource at Oposura” created and released to the ASX on 8 May 2019 and is available to view on www.asx.com.au. 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.