Ann: General Meeting Presentation, page-2

Present at meeting Peter Ingram, Tony Rovira (Mexican consul to WA now if I heard correctly), Glenn Jardine, Brett Dickson and some 10 or so attendees.

Tony's presentation was given using today's PPT announcement and questions were invited as he went through it.

Nothing really new - just a few extra details here and there amongst a wealth of information.

OPASURA:
With the drilling completed assays for some 100 of the 160 holes are now to hand.  More come in every few days and some official sections will be presented in due course - Block model stage was mentioned so perhaps not for another month or so.
TR and GJ are very positive that open pit and UG room and pillar mining can be done successfully.
No real surprise but this was my rough interpretation for the location of Open Pit?s in the eastern zone.  The western margin of the larger pit is probably fault bounded.
Will probably post a little more about Opasura East tomorrow.

The main mineralisation occurs just above the Arenillas/Revancha rhyolite contact and for the time being a 4m thickness is considered average.  There are thickness/grade variations,  faults and local rolls/"gentle" dips which should not impact too much on mechanised mining.

At present first pass UG recoveries are expected to be 85% and appropriate retreat mining should increase this to near the historical 95% from the UG workings.

Work Schedule from presentation


Paraphrasing some quotes from TR today.
"Should be some good news coming out soon on Opasura"
"Mine capex OPS "relatively low";
"Similar mines in Mexico are profitable"

Metallurgy good and investigations ongoing for DMS and possible XRay sorting to reduce the amount of material to go through the mill.

As a general rule holes were terminated after penetrating a few meters into the Revancha Rhyolite.  In simplistic terms this means the Arenillas/Revancha contact is near end of hole as I assumed for some previously posted sections.

Access has apparently been an issue for the Opasura tenements with an agreement only recently being made with a local rancher to do work on the western part.

Candelaria is a vein silver related deposit kept on the back burner / low priority for the time being.

The Revancha Rhyolite has traces of copper and molybdenum mineralisation which may be examined in the future as it suggests the possibility of an underlying intrusive - geophysics/deep drilling a long time off?

SARA ALICIA
TR comment
"waiting for results/Sexy project"

Drilling designed to test to some 50-60m from surface.
Apparently one of only 3 Co/Au deposits in the world - BC, Morocco and SA to TR's knowledge - so quite unusual and the others are related to Ultramafics but SA (limestone/skarn) is not!
Ongoing metallurgical work - so far mineralisation is in massive sulphides with no Cu or Ni noted.
Results .... next few weeks so patience.
With drilling success some "deep seeking geophysics" may be applied to SA to test for underlying porphyry anomalies.

20K hectare Surrounding tenements lapsed and reverted to the government.  There is a procedure to release land back to industry but according to TR this has stalled and there is no indication when it may become available.  This is not just the Sara Alicia area.  He mentioned something about Alacran  as well as possibly a more systemic tenement issue in Mexico at the moment.  Add on upcoming Presidential elections in 6 months plus up to a year as the new government finds it feet the wait for specific tenements to be released may be slow.

ALACRAN
Teck's internal processes will take as long as they will take.  Frustrating for AZS and SHs but  apparently QAQC has to meet strict standards which can't be expedited...  Not too different to reporting of the Rio work at Promontorio.


I asked a question about how widespread MDP/LB mineralisation is.  TRs comment was that the NW area appears to be higher in the stratigraphy - perhaps some up faulting/horst structure - where as to the south and east the copper targets are in areas of deeper erosion.

Very significant drilling expected to take place in the second half of 2018.

Simplistically AZS's view is that Teck will be results driven on Alacran.  That is lack of success will probably mean the exploration budget will be cut and tenements revert to AZS with possibly some negotiations depending on % earned. Hopefully some decent Cu will turn up in which case AZS ends up with 35% and the choices that come to fund their portion of a large mine.

FINANCE
$8.5M in the kitty should be enough to see through this year.

1/3rd of shares held outside Australia is considered a positive by the company.

Didn't ask about and no comment on TSX listing.

Revenue:  Some 1600 small companies on the ASX many in the same situation as AZS - Hoping to become cash positive.   Single out any of them and arguments will be somewhat similar to AZS's situation as to why it hasn't happened yet - paraphrased comment from someone at the meeting today.  Echoed my personal view on the issue.

Overall the board sound happy about Opasura and look forward to the PEA later this year which will start to put some preliminary numbers on the spreadsheets that could lead to revenue in a reasonable time frame.