Azucar Minerals (TSX-V: AMZ) CEO Morgan Poliquin on Latest High-Grade Results & Continuing Exploration Drilling at the El Cobre Porphyry Copper-Gold Project

March 25, 2019

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Gerardo Del Real: This is Gerardo Del Real with Resource Stock Digest. Joining me today is the President and CEO of Azucar Minerals (TSX-V: AMZ)(OTC: AXDDF), Dr. Morgan Poliquin. Morgan, how are you?

Morgan Poliquin: I'm excellent, thank you. And you?

Gerardo Del Real: Fantastic, fantastic. Thank you for coming on. The last time we spoke we got a little bit into a deep dive as far as exploration and how obviously you want to hit with every drill hole, not every drill hole is going to hit. You just put some news out a couple of days ago and it was good news. You hit 64.5 meters of 1.10 grams per tonne gold and 0.40% copper. That's within a longer intercept of 253 meters of 0.72 grams per tonne gold and 0.30% copper.

How is the understanding of the system evolving and what do we have to look forward to the rest of the year, Morgan?

Morgan Poliquin: Well, all the drill holes that we put into these various zones to date, I think, have given us the framework to interpret how to follow them up and they were all important in that. These gold-rich porphyry systems aren't, in some cases, sort of massive blobs that you can't miss. In fact, they can be fairly discrete, a couple hundred meters across, sometimes the higher grade ones. Understanding which way things are trending using things like metal ratios and just simply where copper is increasing, you need the data to be able to do that and obviously everyone would love to drill into the heart of it right from the get-go.

That rarely happens, so we've got multiple targets over 5 kilometers. Like I say, I think we have the data now and we think there may be more porphyries to discover that we haven't yet discovered. We've got alteration and all kinds of indicators of that, of other places to drill to look for something brand new. But with the ones we understand, we now have the drilling in place to really start to explore it aggressively and in a more focused way.

It's going to be a really exciting year for us. We've got, obviously, the treasury and the ability and the background, as I say, this background drilling to be able to do that.

Gerardo Del Real: Well, you also have what looks like a better gold space for sure, but the base metals have rebounded well recently, also. Copper flirting with $3 a pound here as we speak. Azucar has a market cap of $27 million. Obviously, you believe you already have a discovery there at Norte, one that is growing. But you have multiple porphyry centers over a 5-kilometer strike, Morgan. Where are drills turning today?

Morgan Poliquin: Well, we continue to have a drill at Norte. This hole that we're speaking about today, I didn't mention earlier, it didn't quite go where we wanted it to go. We think that the zones are open to depth and we interpret that we're at the top of this system. So we think that if there are higher grades, they're likely to be at depth. Of course, we know around the world that high-grade porphyries are being mined underground by many of the larger copper-gold companies. That's a target there.

We also think it could be open in other directions. We've got one drill currently at Norte. We've got one drill right at this moment in what we call the Villa Rica Zone where we made a discovery a year and a half ago, I think, some very high-grade copper at surface. We think we now better understand how to follow those grades up. Right now we've got a drill working on some of those new target areas that I mentioned that are potential for possible future discovery. We've kind of got one drill running around wildcatting, looking for something new, and we'll have two drills focused, I think, on those two targets. Of course, we have the ability to increase the number of drills as well. But for the foreseeable future, three drills on the project.

Gerardo Del Real: Excellent. We've talked in the past about the importance of drilling in various directions, obviously, even if it's closely spaced to get a better idea of which way these trends are headed, right? And it seems like, just reading from the language in recent press releases, it seems like something's happened in the past several months that's really allowed you to understand the multiple targets in a much clearer way. Would I be accurate in saying that, Morgan? And if so, can you explain what was that step change moment that happened?

Morgan Poliquin: These are big alteration zones in terms of the scale of the system. Unfortunately for explorationists, they're fairly discrete areas in the middle of these big exciting alteration zones that the deposits actually occupy. A good example of that is actually, as listeners may know, Newcrest is a shareholder of Azucar and their discovery of one of these sorts of things called Ridgeway, just outside of their Cadia pit there, was a deep discovery. My understanding is you can be 50 meters away from basically plus-gram gold – I forget the exact resource but it was more than 2 grams gold and 0.7 copper. It was a nice block cave mine that you can be 50 meters away and not know it's there.

You have to be looking for those alteration trends and metal distribution trends. We know we're close because we had surface outcrop that was really exciting, but we don't know which way these things are trending. They can be adjusted. They can start to dip because of structure. Once you're on them, I think you're on them. We know we're close but we're not on the prize just yet. So we needed to drill a number of holes to look for those trends and to understand them so we can follow up. And that's, I think, been very successful in telling us in which way to go.

Gerardo Del Real: Excellent. Morgan, look forward to having you back on. I get the feeling we're going to have a lot of news flow this year.

Morgan Poliquin: I think that's true. Thank you very much. Really appreciate it.

Gerardo Del Real: Thanks again, Morgan.

Morgan Poliquin: Take care. Bye.

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