Azarga Metals Announces Maiden Mineral Resource Estimate FOR Unkur Deposit
AZARGA METALS CORP.
UNIT 1 – 15782 MARINE DRIVE, WHITE ROCK, B.C. V4B 1E6, CANADA
www.azargametals.com
FOR IMMEDIATE RELEASE
4 April 2017 TSX-V: AZR
AZARGA METALS ANNOUNCES MAIDEN MINERAL RESOURCE ESTIMATE FOR
UNKUR DEPOSIT
AZARGA METALS CORP. ("Azarga Metals" or the “ Company”) (TSX-V:AZR)
announces the results of its maiden Mineral Resource estimate for its Unkur C opper-
Silver Project in the Zabaikalsky Region of eastern Russia. The estimate is an Inferred
Mineral Resource of 42 million tonnes at 0.52% copper and 38g/t silver ,
containing 220,000 tonnes (ie, 480 million pounds) of copper and 52 million
ounces of silver . This equates to approximately 380,000 tonnes (ie, 840 million
pounds) of copper equivalent at 0.90% or approximately 124 million ounces of silver
equivalent at 9 1g/t, assuming a copper price of US$3.00/lb, silver price of US$20/oz
and 100% recovery. The Mineral R esource estimate was independently prepared by
SRK Consulting (Russia) Ltd. (“SRK”), in accordance with NI 43-101.
“The maiden Mineral Resource estimate is a very successful result from j ust our
first few months of physical exploration at Unkur ”, said Dorian L. (Dusty) Nicol, the
Company’s president and CEO. He went on to say, “ importantly, mineralization is
open in multiple directions, which supports growth potential ” and “this further
stimulates our belief that Unkur has the potential to be a globally significant
copper-silver deposit.”
A Technical Report covering the Mineral R esource estimate will be filed on SEDAR
within 45 days of this news release.
SUMMARY
An Inferred Mineral Resource was estimated based on three domains. Zone 1 is the
stratigraphically upper zone of mineralization and Zone 2 is the stratigraphically lower
zone, which is divided into a northern (N) and southern (S) sub- zone. Zone 1 and Zone
2 are further divided into near surface and underground mineralization.
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Table 1: Unkur Copper -Silver Project Inferred Mineral Resource estimate summary as
at 31 March 2017
Category / zone
Tonnage
(million
tonnes)
Copper
grade (%)
Silver
grade (g/t)
Copper
equivalent
grade (%)
Silver
equivalent
grade (g/t)
Near surface (NS)
- Zone 1 23 0.54 40 0.93 95
- Zone 2 (North) 9 0.47 43 0.89 91
- Zone 2 (South) 1 0.42 4 0.46 47
- Total near surface 33 0.52 39 0.90 92
Underground (UG)
- Zone 1 8 0.53 34 0.86 88
- Zone 2 (North) 1 0.47 43 0.89 91
- Total underground 10 0.52 35 0.87 88
Zone 1 NS + UG 31 0.54 38 0.91 93
Zone 2 NS + UG 11 0.46 38 0.84 85
Total Resource 42 0.52 38 0.90 91
Notes: (1) CIM Definition Standards were followed for Mineral Resources; (2) Pit constrained Mineral
Resources are reported within a conceptual pit shell ; (3) Mineral resources are not Mineral Reserves and
do not have demonstrated economic viability ; (4) Mineral Resources are reported at a cut -off grade of
0.3% copper equivalent for near surface and 0.7% copper equivalent for underground; ( 5) copper and
silver equivalent grades were estimated using US$3.00/lb copper price, US$20.00/oz silver price and
100% recovery using the formulae Cu eq = Cu + (0.009722 x Ag) and Ag eq = Ag + (102.86 x Cu) ; and
(6) numbers may not add due to rounding.
Figure 1: Plan view of Inferred Mineral Resource zones
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Figure 2: Long section showing grade distribution
GROWTH POTENTIAL
Azarga Metals considers that there is strong potential to grow the Mineral Resource at
the Unkur Copper-Silver Project beyond that identified in this maiden Mineral R esource
estimate. The mineralization is open in both directions along strike and further
exploration drilling will aim to extend mineralization along strike. Of key interest for
growth potential is the zone of thicker and higher grade mineralization in the northern
part of the Inferred Mineral Resource area (see Figure 2). The next phase of work will
focus on using geologic and geophysical exploration to target potential extensions of
this higher grade zone. The mineralization also remains open down- dip. In addition to
this Unkur Copper -Silver Project Inferred Mineral Resource area and its potential
extensions, there are numerous additional occurrences of copper -silver mineralization
and geochemical / geophysical anomalies within the Company’s 5,390 hectare Unkur
License.
DETAILS OF MINERAL RESOURCE ESTIMATE DATED 31 MARCH 2017
Details of Mineral Resource estimate dated 31 March 2017
The Mineral Resource estimate was prepared by SRK, under the direction of Robin
Simpson MAIG, an independent Qualified Person as defined by National Instrument 43-
101 (“NI 43-101”). The results are reported in accordance with NI 43- 101 and the 2014
CIM Definition Standards. The Qualified Person visited the Unkur Copper -Silver Project
and SGS Laboratories in Chita during October 2016.
Robin Simpson has approved this written disclosure of the Mineral Resource estimate.
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Data verification
The Qualified Person has verified the database the Mineral Resource estimate is based
on. This verification was done by personal inspection of drill core, drill sites and
trenches during the site visit, and by checking database content against primary data
sources and historical information.
Exploration Information
The estimate is based on 4,580 meters of diamond drilling (from 16 drill -holes) and 186
meters of channel sampling (from four trenches), complet ed during Azarga Metals’
exploration campaign from August 2016 until February 2017.
In the opinion of the Qualified Person, the core and channel samples collected by
Azarga Metals are sufficiently accurate and reliable for use in Mineral Resource
estimation, and there are no material data quality issues related to drilling, sampling,
recovery or other factors.
Intervals identified by Azarga Metals’ geologists as potentially mineralized were
sampled, typically on one meter lengths. The half -core samples from drill core, and
channel samples from trenches, were sent to SGS Laboratories in Chita for analysis of
copper and silver. Standard QA/QC protocols were followed, including analysis of
duplicates and standards and check analyses by ALS Laboratories in Chita. The results
of this QA/QC checking will be presented in the forthcoming Technical Report.
The main identified zone of copper -silver mineralization (Zone 1) is intersected by 13
drill-holes and two trenches. Drill- hole collar and trench locations are tabulated in Table
2 and the mineralized intersections are summarized in Table 3. The locations of these
intersections are shown in Figure 3.
Table 2: Drill-hole collar and trench locations from August 2016 to February 2017
physical exploration program at Unkur Copper-Silver Project
Hole or
trench ID
X
Y
Z (RL m)
Maximum
depth (m)
Starting
dip (deg)
Starting
azimuth
(deg)
AM-020 20595906 6303578 902.7 284.9 -70 249
AM-001 20595871 6303108 929.7 400.5 -69 241
AM-002 20596077 6303227 919.4 520.5 -70 248
AM-003 20595911 6302753 930.5 100.0 -72 242
AM-004 20596093 6302871 935.5 382.9 -70 242
AM-005 20596247 6302510 913.7 160.0 -71 241
AM-006 20596388 6302620 955.1 572.0 -69 221
AM-007 20596411 6302155 927.7 80.0 -70 222
AM-008 20596611 6302365 1,007.8 601.3 -72 228
AM-009 20596725 6301968 983.0 238.0 -69 224
AM-011 20596936 6301672 952.3 178.5 -68 223
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AM-013 20597233 6301394 995.8 100.0 -68 220
AM-015 20597567 6301246 1042.0 201.0 -68 217
AM-017 20596211 6302467 916.1 277.5 -71 230
AM-019 20596639 6301879 938.9 226.7 -69 224
AM-018 20595635 6302977 937.8 256.6 -73 241
TR K601 20596492 6301887 969.1 14.0 0 236
TR K615 20597213 6301311 1,015.4 115.0 0 222
TR K616 20597472 6301143 1,049.5 29.0 0 233
Table 3: Intersections used for estimation(1)
Hole or
trench ID
From
(m)
To
(m)
Length
(m)
Copper
grade (%)
Silver
grade (%)
Copper
equivalent
grade (%)
True
thickness
(m)
Zone 1
AM-020 227.0 241.0 14 0.51 28.44 0.79 10.6
AM-001(2) 82.5 125.5 33 0.83 79.81 1.61 20.1
AM-002 432.5 472.5 40 0.31 12.77 0.44 33.8
AM-003(3) 40.5 77.5 37 0.43 39.63 0.82 26.9
AM-004(4) 319.5 358.5 31 0.44 27.23 0.70 23.7
AM-006 440.5 456.5 16 0.34 11.02 0.45 14.4
AM-007 47.0 60.0 13 0.25 17.12 0.41 10.9
AM-008 352.3 364.3 12 0.24 6.02 0.30 9.9
AM-011 145.5 153.9 8.4 0.92 61.73 1.52 7.3
AM-013 70.0 78.0 8 0.53 22.62 0.75 6.8
AM-015 135.0 145.0 10 0.29 4.55 0.34 8.7
AM-017 189.5 202.5 13 1.28 103.91 2.29 9.8
AM-019 39.0 49.0 10 0.48 12.39 0.60 8.6
TR K615 8.0 17.0 9 0.30 14.03 0.44 6.9
TR K616 18.0 29.0 11 0.41 6.32 0.47 8.1
Zone 2 (N)
AM-001 311.5 346.5 35 0.47 43.49 0.89
AM-019 106.0 119.0 13 0.17 4.99 0.22
Zone 2 (S)
TR K601 0.0 10.0 10 0.73 2.07 0.75
Notes: (1) copper and silver equivalent grades were estimated using US$3.00/lb copper price,
US$20.00/oz silver price and 100% recovery using the formulae Cu eq = Cu + (0.009722 x Ag) and Ag eq
= Ag + (102.86 x Cu) ; (2) minerali zation begins at base of moraine, possibly intersection has been
truncated by glacial erosion – composite excludes barren zone from 104.5 to 114.5; (3) minerali zation
begins at base of moraine, possibly intersection has been truncated by glacial erosion; and (4) composite
excludes barren zone from 335.5 to 343.5.
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Figure 3: Summary of intersections
Section lines for drilling are spaced approximately 300m apart. Where there are two
Zone 1 intersections on the same drill section, the spacing between intersections is
typically 200m to 300m.
Estimation methodology and parameters
A wireframe interpretation of Zone 1 was constructed at a nominal threshold of 0.10 %
copper. Based on the limits of the current sampling coverage, the modelled domain has
a strike length of 3,400 meters northwest-southeast, and a down dip extent of up to 550
meters, but this zone is open down dip and along strike in both directions. The Zone 1
domain generally dips 50 to 60 degree to the east or northeast, and has an average true
thickness of 19 meters.
Approximately parallel to Zone 1, and 100 to 150m southwest, a second zone of
mineralization has been interpreted, from two drill intersections, one trench intersection,
and one outcrop. This second zone is stratigraphically below Zone 1.
The Lower Proterozoic sedimentary rocks that host mineralization are partly covered by
Quaternary moraine. The thickness of the moraine cover over the northern part of the
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mineralization is up to 100 meters . The moraine cover generally is thinner to the south,
and mineralization in the southern part of Zone 1 and Zone 2 can be exposed by
trenching.
Topography was modelled based on drill collar locations, and using additional elevation
information digitized from topographic maps.
Copper and silver grades within the Zone 1 mineralized domain were estimated by 2D
Ordinary Kriging. A single 2D composite was generated for each intersection. The true
thickness assigned to each composite was calculated based on the local orientations of
the drill intersection and the Zone 1 wireframe. No grade capping was applied to either
the samples or the composites. The block size for 2D Kriging was 100 meters north-
south and 100 meters vertically. The results of the estimation were copied into a 3D
block model, with sub-blocking down to 1.5625 meters, in order to achieve a good fit to
the relatively narrow mineralization wireframe.
The copper and silver grades for Zone 2, which contains fewer intersections than Zone
1, were estimated by a simple average of sample grades for the northern and southern
portions.
For the mineralized domains and the host rocks, a dry bulk density value of 2.67t/m 3
was used for converting volumes into tonnages. This factor is the average value of
samples collected by Azarga. A dry bulk density factor of 2.0t/m 3 was assumed for the
moraine material.
The portion of the mineralization model that met the CIM definition of a Mineral
Resource (“…reasonable prospects for eventual economic extraction”) was established
by using NPV Scheduler software to generate a pit shell to constrain reporting of the
near surface resource. The input parameters for the pit shell are shown in T able 4.
Within the pit (the near surface component of the resource), no mineralized blocks have
an estimated grade of less than 0.4% ( copper equivalent), and no further cut -off grade
was applied. Below the pit, a cut -off grade of 0.7% ( copper equivalent) was applied to
define an underground component of the Mineral Resource. This cut -off was estimated
using the same parameters in T able 4, but assuming 20% dilution and an underground
mining production cost of US$20 per tonne.
Table 4: Economic parameters for pit shell
Parameters Units Amount
Geotechnical
- Moraine slope Deg 30
- Bedrock slope Deg 45
Mining factors
- Dilution (at 0 grade) % 5
- Recovery % 95
Processing
- Copper recovery % 90
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- Silver recovery % 90
Operating costs
- Waste mining cost US$/trock 1.20
- Resource mining cost US$/trock 1.50
- Incremental mining cost US$/1m 0.005
- Reference level Z Elevation 1,000
- Processing cost US$/tore 10.00
- G&A US$/tore 2.00
- Royalty, selling cost (Cu) % 8.0
- Royalty, selling cost (Ag) % 6.5
Metal price
- Copper US$/lb 3.00
- Silver US$/oz 20.00
All Mineral Resources were classified as Inferred, based on the intersection spacing
relative to the interpreted continuity and potential complexity of the deposit.
Qualified Person
The Company’s President and Chief Executive Officer, Dorian L. (Dusty) Nicol, B.Sc.
Geo, MA Geo, a Qualified Person as defined by NI 43- 101, has reviewed and approved
the exploration information disclosures contained in this Press Release.
About Azarga Metals Corp.
Azarga Metals is a mineral exploration and development company that owns 60% of the
Unkur Copper-Silver Project in the Zabaikalsky province in eastern Russia.
AZARGA METALS CORP.
"Dusty Nicol"
Dorian L. (Dusty) Nicol, President and CEO
For further information please contact: Doris Meyer, at +1 604 536-2711 ext 6, or visit
www.azargametals.com.
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