Azure Minerals

Azure Minerals Limited (ASX: AZS) is a mineral exploration Company operating in the world renowned Sierra Madre Occidental mining province in northern and central Mexico. This highly mineralised region remains relatively under-explored.

The Company is currently focused on developing its two significant project areas; the Promontorio Copper Project and the El Tecolote District. These key areas of focus provide an opportunity to increase the Company’s existing resource base, as Azure heads towards becoming an independent minerals producer.

Azure Minerals, through its wholly-owned Mexican subsidiary Minera Piedra Azul SA de CV, has implemented a continuous program of regional exploration, target identification and project acquisition in order to acquire 100% owned properties prospective for the discovery and development of precious and base metal deposits. The effectiveness of this program is enhanced by the presence of Azure's exploration and administration office in Hermosillo, the capital of Sonora.

Promontorio

Promontorio Central (Azure has the right to acquire 100%)

Promontorio Regional (Azure 100%)

The Promontorio Project contains a high grade copper-gold-silver deposit hosted in veins of massive and semi-massive sulphides, with significant additional exploration potential to expand the resource along strike to the north and south, as well as at depth.

The high grade deposit has a JORC Code resource of 502Kt @ 4.7% Copper, 2.1g/t Gold & 99g/t Silver, containing 23,400 tonnes of copper, 34,000 ounces of gold and 1,600,000 ounces of silver. There is excellent potential to significantly expand the resource through further drilling along strike and at depth. Metallurgical testwork demonstrates that through a simple crushing, grinding and flotation process, a very high grade concentrate can be produced, of 39.5% Copper, 9.6g/t Gold and 773g/t Silver. Furthermore, economic evaluation at current metals prices indicates that Promontorio can be developed and operated at a significant profit, with the high grade of the mineralisation providing strong positive margins over operating costs.

During 2011 Azure completed a diamond drilling program testing both extensions of the Promontorio deposit and also the nearby Cascada gold prospect. The program yielded a number of positive outcomes with the Promontorio strike length being doubled to 400m and a new high grade copper-gold bearing vein located to the west of the existing resource.

At Cascada, a new bulk tonnage gold-silver zone has been identified with one drill hole intersecting 137m @ 0.42g/t Gold & 6g/t Silver. Mineralisation remains open at depth and along strike, with a surface expression over a 700m strike length and with widths up to 40m.

El Tecolote District Joint Venture (Azure 100% - JOGMEC earning up to 70%)

Azure has 100% ownership of a 625km² strategic tenement holding in the El Tecolote District located in Sonora State, Mexico. The area comprises three adjoining properties: El Tecolote, La Tortuga and San Eduardo which are prospective for porphyry hosted copper and skarn copper-zinc-silver deposits.

Azure has entered into two joint venture (JV) agreements with the Japanese Government organisation Japan Oil, Gas and Metals National Corporation (JOGMEC) covering the La Tortuga and El Tecolote projects. The La Tortuga JV, which was established in 2008, provides JOGMEC with the right to earn a 51% interest by sole funding US$3 million expenditure over a four year period. The El Tecolote JV, established in 2011, gives JOGMEC the opportunity to earn a 70% interest in the project by sole funding US$13 million over a six year period.

El Tecolote

Situated between Azure’s San Eduardo and La Tortuga project areas, El Tecolote is a 178km² property containing abundant evidence of base metal mineralisation with potential for both porphyry copper and skarn copper-zinc-silver deposits.

The intensive 2011 exploration program, funded by JOGMEC with a $1.5 million budget, includes numerous geophysical surveys (airborne VTEM, aeromagnetics, ground magnetics and IP), mapping, sampling and drilling. This work identified several high priority targets, including the Reyna del Cobre (skarn), extensions of the El Tecolote Mine (skarn), and several nearby porphyry copper prospects, which are being tested by a 2,000-3,000 metre diamond drilling program.

Reyna del Cobre (translated as ‘Copper Queen’) was discovered by Azure in early 2011 when drilling intersected multiple skarn zones containing massive sulphide copper-zinc mineralisation with strong gold grades up to 2.3 g/t Au. Best mineralised intercepts included:

• 11.0m @ 1.3% Copper, 3.0% Zinc, 7.1 g/t Silver, 17.2 g/t Indium & 32% Iron from 72.0m

• 4.0m @ 1.2% Copper, 4.6% Zinc, 3.8g/t Silver, 20.8 g/t Indium & 19% Iron from 54.0m

Drilling commenced at Reyna del Cobre with the first hole targeting the mineralised structure at a depth of approximately 120-150m below surface.

The El Tecolote Mine, a significant mining and processing venture operated by Grupo Mexico, Mexico’s largest mining company, produced 1.4 million tonnes @ 1.9% copper, 7.0% zinc and 47 g/t silver. It closed in 1984 due to low commodity prices, with unmined copper and zinc mineralisation remaining around the old mine workings. Azure’s exploration has identified likely strike and depth extensions and possible repetitions, which will be drill tested as part of the current program.

An impressive porphyry copper target has been developed to the south of the mine, where strong IP and geochemical anomalies are present along with surface occurrences of alteration, quartz veining and copper oxide mineralisation within a quartz-feldspar porphyry. This prospect will also be drilled in the current program.

La Tortuga

The La Tortuga Project, consisting of Azure’s 100% owned La Tortuga and Los Nidos properties, covers 213km². Since forming the JV in 2008, JOGMEC has funded approximately US$1.9 million of exploration expenditure and has committed to additional work for 2012.

During the 2010-11 financial year, the JV completed the drilling of six diamond drill holes totalling 1,815m which tested several separate targets identified by anomalous surface geochemistry and geophysical (IP and aeromagnetic) surveys. Zones of altered and quartz veined porphyry were intersected returning anomalous grades of copper.

San Eduardo

San Eduardo is a 234km² property wholly owned by Azure, prospective for porphyry-hosted copper and skarn copper-zinc mineralisation and adjoins the western boundary of the El Tecolote project.

During the course of the 2010/11 financial year, exploration was undertaken on San Eduardo through a JV with Australian copper mining company, OZ Minerals Ltd. Exploration activities comprised geological mapping, surface geochemical sampling, and numerous geophysical surveys (airborne and ground magnetics, radiometrics, and IP). From this work, a porphyry copper target was identified and tested by drilling one 600m deep diamond drill hole. This drill hole intersected wide zones of strongly altered and quartz veined porphyry containing substantial quantities of pyrite, with minor amounts of copper oxide and copper sulphide mineralisation.

Following this work, OZ Minerals elected to withdraw from the San Eduardo JV. During their time involved in the project, Oz Minerals contributed US$700,000 and the large amount of technical data collected through this expenditure highlighted the extensive prospectivity of San Eduardo with numerous porphyry copper and skarn copper-zinc targets identified. These targets remain untested to date and follow-up exploration is continuing.

San Francisco (Azure has right to acquire 100%)

Azure has an option to acquire 100% ownership of the San Francisco Manganese Project, located in the central Mexican state of Jalisco. The agreement provides the Company with exclusivity to undertake a full technical and commercial evaluation.

After acquiring the deposit, the Company reported a maiden JORC compliant inferred mineral resource estimate of 1,045,000 tonnes @ 30% Mn for 312,000 tonnes of contained manganese. Resource expansion drilling has also been undertaken, in conjunction with additional feasibility studies.

The project area has a recent production history, significant upside potential and is located close to key infrastructure.

Pozo de Nacho

Pozo de Nacho contains a substantial body of molybdenum mineralisation hosted within an intrusive porphyry system and surrounding sediments. Azure has drilled mineralisation over an area of 800m x 250m from surface to depths in excess of 300m. The mineralised system remains open-ended in most directions. An IP and resistivity survey of the property was completed in late 2010 with several strong anomalies identified. The Company is contemplating various strategies to advance this property further.

Estacion Llano (Azure 100%)

This 24km² property covers the interpreted western extension of the mineralised system which hosts the >1.3 million ounce San Francisco Gold Mine (owned by Timmins Gold Corp and currently producing at a rate of 100,000 oz gold per annum). Drilling undertaken by Timmins has in fact confirmed that the mineralised system extends towards Azure’s property.

To date, Azure’s exploration has consisted of ground magnetics and soil sampling. Positively, the ground magnetic survey identified a continuation of the highly magnetic rock sequence that hosts the San Francisco Mine and the soil sampling returned gold anomalism coincident with the magnetic high. These interpreted extensions of the San Francisco mineralised system will be the focus of further exploration.

Anthony Paul Rovira - Executive Chairman
B.Sc. Flinders University, B.Sc. (Hons) Flinders University, MAusIMM, MAICD

Tony Rovira is the Executive Chairman of Azure Minerals Limited. He has 25 years technical and management experience in the mining industry, as an exploration and mining geologist, and as a company administrator at Board level. Since graduating from Flinders University in South Australia in 1983, Tony has worked for companies both large and small, including BHP, Sons of Gwalia, Barrack Mines, Zapopan, Pegasus Gold and Jubilee Mines.

From 1997-2003 Tony was the General Manager Exploration with Jubilee Mines, during which time he led the team that discovered and developed the world class Cosmos and Cosmos Deeps massive nickel sulphide deposits. In the year 2000, the Association of Mining and Exploration Companies awarded Tony the Prospector of the Year Award for the discovery of the Cosmos deposit. Tony is responsible for the management of all Azure Minerals' activities, including exploration, project generation and acquisition, and implementation of strategies set by the board.

Dr Wolf Martinick - Non-Executive Director
B.Sc, Ph.D, FAusIMM

Dr Wolf Martinick is a Fellow of the AusIMM, a founding director of the Perth-based consultancy MBS Environmental Pty Ltd and is Chairman of Weatherly International Limited, a company listed on the London AIM stock exchange.  He was a founding Director of Basin Minerals Limited, an ASX-listed mineral exploration company which discovered a world-class mineral sands project in Victoria, Australia.

Dr Martinick has been involved with mineral exploration and mining projects around the world, especially in Australasia, Africa, China, India, Eastern Europe and parts of the former Soviet Union.  He has participated in numerous due diligence studies on mining projects on behalf of international financial institutions and mineral resource companies for a variety of transactions, including listings on international stock exchanges, mergers and debt financing.

In recent years, Dr Martinick has been active in identifying and investigating mineral projects and prospects, especially in emerging economies.

John Walter Saleeba - Non-Executive Director
BCom, LLB, CPA, FAICD

After being admitted as a legal practitioner in 1977, Mr. Saleeba worked with the law firm, Robinson Cox , becoming a partner in 1980. The firm subsequently joined a national partnership of Clayton Utz where he was a partner until retiring in 2003.  Mr. Saleeba is currently Chairman of RER Group Limited and VDM Group Limited.  He has held directorships with Skywest Limited, Centrepoint Alliance Limited,  Burtway Limited, Floreat Close Limited and a number of other companies, covering a wide range of business activities.  Mr. Saleeba has a Bachelor of Laws and a Bachelor of Commerce degree from the University of Western Australia, is a member of the Australian Society of Accountants and a Fellow of the Australian Institute of Company Directors.

Mr Brett Douglas Dickson - Company Secretary & Chief Financial Officer
BBus, CPA

Mr Dickson has over 20 years experience in the financial management of companies, principally companies in early stage development of its resource or product, and offers broad financial management skills. He has been Chief Financial Officer for a number of successful resource companies listed on the ASX.  He has had close involvement with the financing and development of a number of greenfield resources projects, including the Mt Horner and Blina oilfields, the Beharra Gas field, the Nimbus silver-zinc deposit, and the Dongara Mineral Sands deposit.

Mr Dickson is a Certified Practicing Accountant with a Bachelors degree in Economics from Curtin University.

SHARE STRUCTURE:
(Current at 12 May 2011)