Azarga Metals Increases Inferred Resource FOR Unkur with Updated Mineral Resource Estimate
AZARGA METALS CORP.
UNIT 1 – 15782 MARINE DRIVE, WHITE ROCK, B.C. V4B 1E6, CANADA
www.azargametals.com
FOR IMMEDIATE RELEASE
27 March 2018 TSX-V: AZR
AZARGA METALS INCREASES INFERRED RESOURCE FOR UNKUR WITH
UPDATED MINERAL RESOURCE ESTIMATE
AZARGA METALS CORP. ("Azarga Metals" or the “ Company”) (TSX-V:AZR)
announces an updated Mineral Resource estimate for its Unkur Copper-Silver Project in
the Zabaikalsky administrative r egion of eastern Russia. The estimate is an Inferred
Mineral Resource of 62 million tonnes at 0.53 % copper and 38.6g/t silver ,
containing 328,600 tonnes (724 million pounds) of copper and 76.8 million troy
ounces of silver. This equates to copper equivalent grade of 0.90%, assuming a copper
price of US$3.00/lb, silver price of US$20/oz and 100% recovery for copper and silver.
The upated Mineral Resource estimate represents an increase of approximately 20
million tonnes (ie, 47%) in the size of the Inferred Resource, compared to the Company’s
maiden NI 43-101 Resource estimate (see the Company’s news release dated April 4,
2017), with both copper and silver grades having increased marginally. The increase in
tonnage, as compared to the Company’s maiden Resource estimate, was caused by two
factors. Firstly, as a result of a recent detailed review of the geology and s tyle of
mineralization of Unkur by Azarga Metals and Tetra Tech staff, a less restrictive approach
has been deemed appropriate to the physical constraints applied to the three dimensional
geological model of the deposit thereby including some mineralized z ones that were
previously excluded in the estimation of the maiden Resource. Secondly, the current work
on the preliminary economic assessment (“PEA”) for Unkur has provided a more detailed
understanding of the possible operating options for Unkur and asso ciated costs, and
Tetra Tech considers that there is a reasonable expectation of economic viability of some
material that was excluded from the maiden Resource based on a hypothetical open -pit
design. This material has now been included into the updated Mineral Resource estimate.
The updated Mineral R esource estimate was independently prepared by Tetra Tech
Mining and Minerals (“Tetra Tech”), in accordance with National Instrument 43-101 (“NI
43-101”).
“We are encouraged by the results of this Mineral Resource update at Unkur”, said
Dorian L. (Dusty) Nicol, the Company’s President and CEO. “This expanded Resource
bodes well for the outcome of the ongoing PEA, which is on track for completion
in the next two months. Significantly, much of the higher grade copper and silver
Page 2
mineralization is near -surface and we believe has a good likelihood for being
considered open -pitable. The upcoming PEA will assess the mineralization
potentially recoverable by open -pit methods. The mineralization remains open in
multiple directions, and we therefore believe that the project has potential to grow
significantly with additional exploration. This further validates our belief that Unkur
has the potential to be a globally significant copper-silver deposit.”
A Technical Report covering the updated Mineral R esource estimate will be filed on
SEDAR within 45 days of this news release. The Technical Report will be joint-authored
by Tetra Tech and by SRK Consulting (Russia) Ltd. (“ SRK”), who prepared the maiden
NI 43-101 Resource estimate published in April 2017.
SUMMARY
An Inferred Mineral Resource was estimated based on two geologically distinct
structures, named Zone 1 and Zone 2 . Zone 1 is the stratigraphically upper zone of
mineralization and Zone 2 is the stratigraphically lower zone . The wireframes were built
along strike beyond the influence of the data to assist with target generation, and the
Resource was constrained by a hard boundary, informed by the search distance, p ost-
estimation.
Resource Estimation Assumptions and Methods
Key Assumptions used to estimate the Mineral Resources are:
▪ The Mineral Resource has been estimated with dimensional block models of: 25m
25m 20m (x, y, z), with minimum sub-block dimensions of 5m 5m 10m (x, y, z).
▪ The estimate was constrained to the mineralised zone using wireframe solid models.
▪ Grade estimates were based on 1m composited assay data.
▪ The interpolation of the metal grades w as undertaken using inverse distance
weighting.
▪ In order to demonstrate that the deposit has reasonable prospects for economic
extraction, a cut-off grade of 0.3% copper equivalent has been applied for Resources.
▪ The copper equivalency formula is Cu Eqv. = ((Cu % US$3.00 22.04) + (Ag g/t
US$20 0.0321)) ÷ US$3.00 ÷ 22.04:
o Cu price US$3.00/lb
o Cu recovery 100%.
o Ag price US$20/oz.
o Ag recovery 100%.
The revised Unkur Mineral Resource is presented in Table 1.
Table 1: Resource Statement for Unkur at 0.3% Cu equivalent cut-off grade
Page 3
Class Tonnes Density
Copper
grade
(%)
Silver
grade
(g/t)
Copper
equivalent
grade (%)
Copper
metal
(t)*1
Silver
metal (ozt)
Inferred 62,000,000 2.67 0.53 38.60 0.90 328,600 76,881,000
Notes: The effective date of the Resources is March 16 2018. Mineral Resources that are not mineral
Reserves do not have demonstrated economic viability. The estimate of mineral Resources may be
materially affected by environmental, permitting, legal, title, taxa tion, socio -political, marketing, or other
relevant issues. Numbers may not sum due to rounding.
*1 328,600t Cu = 724,234,400lbs
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 Mineral Resource 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 interpreted
Mineralised area.
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 / g eophysical anomalies within the Company’s 5,390
hectare Unkur License.
DETAILS OF MINERAL RESOURCE ESTIMATE DATED 16 MARCH 2018
Details of Mineral Resource estimate dated 16 March 2018
The updated Mineral Resource estimate update was prepared by Tetra Tech, under the
direction of Mr. Joe Hirst B.Sc., M.Sc. EurGeol (European Geologist) CGeol (Chartered
Geologist) . Mr. Hirst is a Resource Geologist at Tetra Tech, and an independent Qualified
Person as defined by NI 43-101. The results are reported in acc ordance with NI 43-101
and the 2014 CIM Definition Standards.
A site visit to the Unkur Copper -Silver Project and to SGS Laboaratories in Chita was
performed during October 2016 by the Qualified Person for SRK, who prepared the
maiden NI 43 -101 Resource estimate, and who will co -author the Technical Report on
the Resource estimate update.
Mr. Hirst has reviewed the technical and scientific information in this press release relating
to the Mineral Resource estimates and has approved the use of the information contained
herein.
Page 4
Data verification
SRK’s 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), completed during Azarga Metals’ first
exploration campaign from August 2016 until February 2017.
In the opinion of the Qualified Person for SRK, 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 qua lity 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 a re summarized in Table 3. The locations of these
intersections are shown in Figure 1.
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
Page 5
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.
Page 6
Figure 1: 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 the mineralized z ones was constructed at a variable
threshold of approximately 0.10% copper equivalent based on a rolling average grade
threshold. Based on the limits of the current sampling coverage, the resultant Inferred
mineralisation has been constrained to a strike length of 2.6 kilometers northwest-
southeast, and a maximum down dip extent of up to 5 30 meters below surface. It is
considered that the mineralised zones are open down dip and along strike in both
directions. The Zones generally dip 50 to 60 degree to the east or northeast, and have an
average true thickness of 19 meters.
Page 7
Figure 2: Wireframe Interpretation
Source: Tetra Tech.
Scale: Major grid interval 2,500m.
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
mineralization is up to 100 meters . The moraine cover lessens to the south , and
mineralization in the south 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 mineralized domain were estimated by Inverse
Distance Weighting using 1m composite samples . Grade capping was applied to the
composites at 2% Cu and 80g/t Ag as a low number of high grade samples are over
represented in the generally small dataset . The parent cell size was 25 meters in the X
and Y dimensions and 20 meters vertically, with subcelling to a minimum of 5 5 10m.
The grade was estimated into the parent cell, with 3 points of descritisation in each
dimension.
Page 8
Figure 3: Isometric View of Cu Eqv. Grade distribution (looking sw)
Source: Tetra Tech. Absent values represent wireframe volume. Estimate constrained by search.
Scale: Easting major grid interval 1250m.
For the mineralized domains and the host rocks, a dry bulk density value of 2.67 g/cm3
was used for converting volumes into tonnages. This factor is the average value of
samples collected by Azarga. A dry bulk density factor of 1.8g/cm3 was assumed for the
moraine material.
All mineral Resources were classified as Inferred, based on the data spacing, geological,
and grade continuity assumptions.
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 100% of the
Unkur Copper-Silver Project in the Zabaikalsky province in eastern Russia.
On 23 March 2018, the Company issued the remaining 5,250,000 Consideration Shares
(see NR 19 March 2018) having received TSX Venture Exchange clearance of a personal
information form for one of the vendors who now owns more than 10% of the outstanding
shares of Azarga Metals and has become a reporting insider.
AZARGA METALS CORP.
"Dusty Nicol"
Dorian L. (Dusty) Nicol, President and CEO