Criteria

JORC Code explanation

Commentary

Sampling

techniques

Nature and quality of sampling (eg cut channels, random

chips, or specific specialised industry standard measurement tools appropriate to the minerals under investigation, such as down hole gamma sondes, or handheld XRF instruments, etc). These examples should not be taken as limiting the broad meaning of sampling.

Include reference to measures taken to ensure sample representivity and the appropriate calibration of any measurement tools or systems used.

Aspects of the determination of mineralisation that are Material to the Public Report. In cases where 'industry standard' work has been done this would be relatively simple (eg 'reverse circulation drilling was used to obtain 1 m samples from which 3 kg was pulverised to produce a 30

g charge for fire assay'). In other cases more explanation

may be required, such as where there is coarse gold that has inherent sampling problems. Unusual commodities or mineralisation types (eg submarine nodules) may warrant disclosure of detailed information.

The airborne magnetic survey was carried out over

295 km² and consisted of approximately 1085 line km of varying lengths flown north-south at a spacing of

300m and in part 150m. East-West tie lines were flown every 3km.

The magnetic survey equipment was fully calibrated and daily tests were carried out to ensure data quality.

This release has no reference to drilling, sampling, assays or mineralisation.

Drilling

techniques

Drill type (eg core, reverse circulation, open-hole hammer,

rotary air blast, auger, Bangka, sonic, etc) and details (eg core diameter, triple or standard tube, depth of diamond tails, face-sampling bit or other type, whether core is

oriented and if so, by what method, etc).

This release has no reference to drilling, sampling,

assays or mineralisation.

Drill sample

recovery

Method of recording and assessing core and chip sample

recoveries and results assessed.

Measures taken to maximise sample recovery and ensure representative nature of the samples.

Whether a relationship exists between sample recovery and grade and whether sample bias may have occurred due to preferential loss/gain of fine/coarse material.

This release has no reference to drilling, sampling,

assays or mineralisation.

Logging

Whether core and chip samples have been geologically and

geotechnically logged to a level of detail to support appropriate Mineral Resource estimation, mining studies and metallurgical studies.

Whether logging is qualitative or quantitative in nature. Core (or costean, channel, etc) photography.

The total length and percentage of the relevant intersections logged.

This release has no reference to drilling, sampling,

assays or mineralisation.

Sub-sampling

techniques and sample preparation

If core, whether cut or sawn and whether quarter, half or

all core taken.

If non-core, whether riffled, tube sampled, rotary split, etc and whether sampled wet or dry.

For all sample types, the nature, quality and appropriateness of the sample preparation technique.

Quality control procedures adopted for all sub-sampling stages to maximise representivity of samples.

Measures taken to ensure that the sampling is representative of the in situ material collected, including for instance results for field duplicate/second-half sampling.

Whether sample sizes are appropriate to the grain size of the material being sampled.

This release has no reference to drilling, sampling,

assays or mineralisation.

Quality of assay

data and laboratory tests

The nature, quality and appropriateness of the assaying

and laboratory procedures used and whether the technique is considered partial or total.

For geophysical tools, spectrometers, handheld XRF instruments, etc, the parameters used in determining the analysis including instrument make and model, reading times, calibrations factors applied and their derivation, etc.

Nature of quality control procedures adopted (eg standards, blanks, duplicates, external laboratory checks) and whether acceptable levels of accuracy (ie lack of bias) and precision have been established.

This release has no reference to drilling, sampling,

assays or mineralisation.

Roving Magnetometer: Model: Scintrex CS-2

Sensitivity: Less than 0.01 nT Sample Interval: 0.1 seconds Measurement Range: 100-1,000,000 nT

Mount: (towed bird 30m below helicopter)

Mean Terrain Clearance: Aircraft (helicopter at 60m) Sensors: Magnetometer (30m above terrain or obstacles)

Aircraft Type/Manufacturer: Bell/Textron 206B Type of Fuel: Jet-B

Survey Speed: (nominally 110 km/hr)

Approximate Data Sample Spacing: Magnetic Field

5m or less

The base station setup was as follows: Model: Scintrex SM2

Sensitivity: Less than 0.1 nT Sample Interval: 5 seconds or less

Recording: Digital

Synchronization: Correlation with airborne magnetometer. Time stamped with time accurate to within 0.005 seconds.

The survey was done from May 1 2001 to May 5 2001

The magnetic survey equipment was fully calibrated and daily tests were carried out to ensure data quality.

GPS: Ashtech Z-Surveyor differential GPS base station and rover with post processing.

Verification of

sampling and assaying

The verification of significant intersections by either

independent or alternative company personnel. The use of twinned holes.

Documentation of primary data, data entry procedures, data verification, data storage (physical and electronic) protocols.

Discuss any adjustment to assay data.

This release has no reference to drilling, sampling,

assays or mineralisation.

All primary data was recorded digitally and sent in electronic format to the geophysical supervisor.

Location of data

points

Accuracy and quality of surveys used to locate drill holes

(collar and down-hole surveys), trenches, mine workings and other locations used in Mineral Resource estimation.

Specification of the grid system used.

Quality and adequacy of topographic control.

This release has no reference to drilling, sampling,

assays or mineralisation.

The grid system used is NAD27 CONUS UTM Zone

12 for easting, northing and RL.

Topographic data was obtained during the magnetic survey using the GPS.

Data spacing and

distribution

Data spacing for reporting of Exploration Results.

Whether the data spacing and distribution is sufficient to establish the degree of geological and grade continuity appropriate for the Mineral Resource and Ore Reserve estimation procedure(s) and classifications applied.

Whether sample compositing has been applied.

Line spacing was 300m and reading spacing was 5m

or less. Infill spacing of 150m was done in the south central part of the survey area

This release has no reference to drilling, sampling, assays or mineralisation.

Orientation of

data in relation to geological structure

Whether the orientation of sampling achieves unbiased

sampling of possible structures and the extent to which this is known, considering the deposit type.

If the relationship between the drilling orientation and the orientation of key mineralised structures is considered to have introduced a sampling bias, this should be assessed and reported if material.

This release has no reference to drilling, sampling,

assays or mineralisation.

This release has no reference to drilling, sampling, assays or mineralisation.

Sample security

The measures taken to ensure sample security.

This release has no reference to drilling, sampling,

assays or mineralisation.

Audits or reviews

The results of any audits or reviews of sampling techniques

and data.

All digital data was quality assured by the geophysical

supervisor, Mr. John Currie.

Criteria

JORC Code explanation

Commentary

Mineral tenement

and land tenure status

Type, reference name/number, location and ownership

including agreements or material issues with third parties such as joint ventures, partnerships, overriding royalties, native title interests, historical sites, wilderness or national park and environmental settings.

The security of the tenure held at the time of reporting along with any known impediments to obtaining a licence to operate in the area.

The Alacrán Project comprises 22 mineral concessions

100% owned by Minera Teck SA de CV, a subsidiary of Teck Resources Limited.

Azure Minerals has an Option to acquire 100% ownership of these concessions by spending US$5 million over four years, subject to Teck having a one- off right to buy back up to 65% ownership.

A 2% Net Smelter Royalty is held by Grupo Mexico. The tenements are secure and are in good standing.

There are no known impediments to obtaining a licence to operate in the area.

Exploration done

by other parties

Acknowledgment and appraisal of exploration by other

parties.

The project area has a history of industrial-scale

commercial mining and small-scale artisanal mining dating back to the early 20th century, which ended shortly after the start of the Mexican Revolution in

1910. After the Revolution ended in the 1920's, the

property was explored intermittently.

The Anaconda Copper Mining Company is known to have done some exploration, including drilling, on the property prior to the late 1960's. Data relating to this work has been located but has yet to be reviewed.

Between 1969 and the early 1980's, the Consejo de Recursos Minerales (Mexican Geological Survey) carried out occasional exploration programs, including drilling 6 holes in 1970 and undertaking geophysical surveys over the Palo Seco and La Morita prospects in

1981.

Grupo Mexico acquired the project after the CRM completed their drilling. Grupo Mexico drilled an additional 26 holes on the project in two phases. The first phase was done in 1991 (24 holes) and the second phase was done in 1997 and 1998 (two holes).

Minera Teck S.A. de C.V., a Mexican subsidiary of Teck Resources Limited acquired the property in 2013 and undertook limited surface exploration.

Azure Minerals acquired the rights to the project in December 2014 through its fully owned Mexican subsidiary company Minera Piedra Azul SA de CV.

Geology

Deposit type, geological setting and style of mineralisation.

Various styles of mineralisation occur on the property.

Intermediate sulphidation epithermal veins and

stockworks host silver, lead, zinc, copper and gold in Cretaceous volcaniclastic rocks (the La Morita, Palo Seco and Alacrán mines).

Secondary copper oxide and chalcocite mineralisation occur in volcanic rocks.

Primary copper mineralization is hosted in porphyry rocks.

Drill hole

information

A summary of all information material to the

understanding of the exploration results including a tabulation of the following information for all Material drill holes:

 easting and northing of the drill hole collar

 elevation or RL (Reduced Level - elevation above sea level in metres) of the drill hole collar

 dip and azimuth of the hole

 down hole length and interception depth

 hole length.

If the exclusion of this information is justified on the basis that the information is not Material and this exclusion does not detract from the understanding of the report, the Competent Person should clearly explain why this is the case.

This release has no reference to drilling, sampling,

assays or mineralisation

Data aggregation

methods

In reporting Exploration Results, weighting averaging

techniques, maximum and/or minimum grade truncations (eg cutting of high grades) and cut-off grades are usually Material and should be stated.

Where aggregate intercepts incorporate short lengths of high grade results and longer lengths of low grade results, the procedure used for such aggregation should be stated and some typical examples of such aggregations should be shown in detail.

The assumptions used for any reporting of metal equivalent values should be clearly stated.

This release has no reference to drilling, sampling,

assays or mineralisation.

Relationship

between mineralisation widths and intercept lengths

These relationships are particularly important in the

reporting of Exploration Results. If the geometry of the mineralisation with respect to the drill hole angle is known, its nature should be reported. If it is not known and only

the down hole lengths are reported, there should be a clear statement to this effect (e.g. 'down hole length, true width not known').

This release has no reference to drilling, sampling,

assays or mineralisation.

Diagrams

Appropriate maps and sections (with scales) and

tabulations of intercepts should be included for any significant discovery being reported. These should include, but not be limited to a plan view of drill hole collar locations and appropriate sectional views.

This release has no reference to drilling, sampling,

assays or mineralisation.

Balanced

reporting

Where comprehensive reporting of all Exploration Results

is not practicable, representative reporting of both low and high grades and/or widths should be practiced to avoid misleading reporting of Exploration Results.

This release has no reference to drilling, sampling,

assays or mineralisation.

Other substantive

exploration data

Other exploration data, if meaningful and material, should

be reported including (but not limited to): geological observations; geophysical survey results; geochemical survey results; bulk samples - size and method of treatment; metallurgical test results; bulk density, groundwater, geotechnical and rock characteristics; potential deleterious or contaminating substances.

This announcement makes no reference to previous

exploration results.

Further work

The nature and scale of planned further work (e.g. tests for

lateral extensions or depth extensions or large-scale step- out drilling).

Diagrams clearly highlighting the areas of possible extensions, including the main geological interpretations and future drilling areas, provided this information is not commercially sensitive

Further work will include LiDAR and orthophoto overflights, Induced Polarization/Resistivity geophysics, mapping, sampling and drilling.