22:59:40 EST Tue 01 Dec 2020
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Azucar Minerals Ltd
Symbol AMZ
Shares Issued 73,829,025
Close 2020-11-16 C$ 0.18
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Azucar files technical report for El Cobre project

2020-11-16 09:14 ET - News Release

Mr. J. Duane Poliquin reports


Azucar Minerals Ltd. has filed a National Instrument 43-101 technical report with Canadian securities regulators to support the initial mineral resource estimate with respect to the Norte zone of the El Cobre porphyry copper-gold project in Veracruz state, Mexico.

The Norte zone is one of five copper-gold porphyry zones identified to date within the El Cobre project and has been the focus of the majority of exploration work conducted at the El Cobre project since 2016.


  • Indicated mineral resource of 1.2 million ounces gold equivalent using the base case net smelter return cut-off of $12 (U.S.) per tonne, comprising 47.2 million tonnes grading at 0.77 g/t AuEq (0.49 g/t Au, 0.21 per cent copper and 1.4 g/t silver);
  • Inferred mineral resource of 1.4 Moz AuEq using the base case NSR cut-off of $12 (U.S.)/tonne, comprising 64.2 million tonnes grading at 0.66 g/t AuEq (0.42 g/t Au, 0.18 per cent Cu and 1.3 g/t Ag);
  • Amenable to an open pit mining method;
  • Potential for resource expansion at depth within the Norte zone as well as at other significant porphyry bodies identified across five kilometres strike length at the project.

The technical report, dated effective Nov. 13, 2020, is titled NI 43-101 Technical Report Mineral Resource Estimate on the El Cobre Copper-Gold-Silver Property Veracruz State, Mexico and is available under the company's profile on SEDAR. The technical report was authored by Kris Raffle, PGeo, of Apex Geoscience Ltd., and Sue Bird, MSc, PEng, of Moose Mountain Technical Services, both of whom act as independent consultants to the company, are qualified persons as defined by National Instrument 43-101 and have reviewed and approved the contents of this news release.

The El Cobre project has a total area of approximately 11,860 hectares and is located adjacent to the Gulf of Mexico, about 75 kilometres northwest of the major port city of Veracruz, Mexico, in an area of excellent infrastructure.

The mineral resource estimate and NSR cut-off sensitivities are presented in the attached table with the base case cut-off at $12 (U.S.) NSR highlighted. The favourable infrastructure at the El Cobre project suggests that the threshold for economic mineralization will be low relative to many other deposits. Copper and gold mineralization at the Norte zone is associated with a multiphase variably potassic-phyllic altered porphyritic diorite intrusive complex that is cut by late-mafic and intermediate dikes and postmineral feldspar porphyry. The Norte zone is approximately 0.6 kilometre by 0.4 kilometre along an east-west strike. Sulphide mineralization, which extends up to 900 metres depth, consists of disseminated and vein-hosted chalcopyrite and trace bornite (copper mineralization) exposed in surface outcrops and intersected in drill core.

The Norte zone MRE is classified in accordance with guidelines established by the Canadian Institute of Mining Estimation of Mineral Resources and Mineral Reserves Best Practice Guidelines dated Nov. 29, 2019, and CIM Definition Standards for Mineral Resources and Mineral Reserves dated May 10, 2014.

There are no other known factors or issues known by the qualified persons that materially affect the MRE other than normal risks faced by mining projects.

The El Cobre project is subject to the same types of risks that large base metal projects experience at an early stage of development in Mexico. The nature of the risks relating to the project will change as the project evolves and more information becomes available. The company has engaged experienced management and specialized consultants to identify, manage and mitigate those risks.

The El Cobre project is located in a general region where pre-Columbian archeological sites are known. To date, exploration programs on the project have been conducted in consultation with Mexico's Federal Agency for Archeology, INAH, which resulted in the identification of several small areas for further study and classification, including one area lying within the MRE pit outline. As is standard practice in Mexico, areas required for development and mining activity would require a clearance from INAH following the implementation of more detailed archeological investigations and an archaeological salvage program, if necessary. The company is committed to working with INAH as part of its future exploration and development plans.

Mineral resource estimate details

The drill hole database used to calculated the MRE comprises 45 exploration diamond drill holes completed between 2008 and 2019 totalling 28,448 metres, containing a total of 27,173.12 metres of drill core analyzed for gold and copper by fire assay and inductively coupled plasma -- atomic emission spectroscopy, with four-acid digestion. Sample intervals within the mineralized domains ranged from 0.45 metre to 3.81 metres in length, with 98 per cent of the intervals having a length of three metres or less.

The Norte zone 3-D geological model created by Azucar integrates assay and geological data collected from diamond core drilling, surface geologic mapping, soil geochemical and geophysical surveys. Based on these data, the Norte zone is modelled as an east-west elongate 600-metre by 400-metre subvertical zone of porphyry copper-gold mineralization extending to a maximum depth of approximately 900 metres vertically below surface. Mineralization is constrained by 3-D geological solids representing host diorite intrusive, and peripheral andesite and dacite tuff volcanic rocks.

Length-weighted averaged composites of three-metre core length, restricted to each rock type, were calculated and used for exploratory data analysis and resource estimation. Assays were capped by zone and domain based on cumulative probability plots to remove outliers. The modelled variograms from each domain were used for resource estimation.

A block model with a regularized cell size of 20 metres by 20 metres by 10 metres was used to estimate grade for each metal using ordinary kriging. The percentage of each block below the overburden surface and within each domain is used for interpolation and the resource calculations. A total of 489 density measurements have been collected at site. Based on these data, the specific gravity within the sulphide material is consistent with a mean value of 2.68. The final grade estimates are validated visually by comparing each block's metal estimates to the raw downhole assay data and statistically by comparing the modelled grades to the de-clustered composite grades by swath plots and by grade-tonnage curves.

Quality assurance/quality control

The analyses which underpin the MRE were carried out at ALS Chemex Laboratories at Guadalajara, Zacatecas, Mexico, and North Vancouver, Canada, using industry-standard analytical techniques. For gold, samples were first analyzed by fire assay and atomic absorption spectroscopy. Samples that returned values greater than 10 grams per tonne gold using this technique were then reanalyzed by fire assay but with a gravimetric finish. For copper, samples were first analyzed by inductively coupled plasma -- atomic emission spectroscopy, with four-acid digestion. Samples that returned values greater than 10,000 g/t copper using this technique were then reanalyzed by HF-HNO3-HCLO4 digestion with HCL leach and ICP-AES finish. Blanks, field duplicates and certified standards were inserted into the sample stream as part of Azucar's quality assurance and control program. The QPs detected no significant QA/QC issues during review of the data. Azucar is not aware of any drilling, sampling, recovery or other factors that could materially affect the accuracy or reliability of the data referred to herein.

About Azucar Minerals Ltd.

Azucar is an exploration company with a mandate to thoroughly explore the El Cobre project in Veracruz, Mexico, which covers multiple gold-rich porphyry targets, as demonstrated by recent drilling. Azucar holds a 100-per-cent interest in the El Cobre project, subject to net smelter returns royalty interests, assuming production from the property exceeds 10,001 tonnes per day of ore, totalling 2.25 per cent which can be reduced to 2 per cent though the payment of $3-million (U.S.).

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