Ann: Quarterly Activities and Cash Flow Report, page-4

Thanks for the compliment on maps.

My views on a couple of things you commented on are a bit repetitious .....

Here are two images of OpE. One without the mineralised envelope (March 2018) and the second from this Quarterly announcement.


Note how the different colour pinks (magenta/purple) match the existing geological boundaries of the Arenillas Formation. Also non mineral resource Arenillas is grey.

IMO this is because AVZ have overlain a pink transparency (?mask - don't know the actual photoshop/gis term) over an original geology/DH map. The grey of the Arenillas unit combines with the "pink" mineralised transparency to give magenta and similarly the different colours where it overlays the Candelaria and Revancha.

The mineral resource under the Candelaria Formation will probably be mined UG.

A lot has been said about R&P mining over the last few months regarding Opasura. Are there any other mechanised mining methods which could be used here once any open pit options are exhausted? I can't think of any. Can you? Even if it was at depth some variant of R&P would likely be used for such flat lying deposits ( e.g. potash at 1500-+m in Saskatchewan/UK etc )

[Coal and potash mines use variants of R&P for their flat lying deposits but they wouldn't be economic at Opasura IMO (ore body characteristics/variability and set up costs for low millions of tons vs 10s of millions of tons etc)]

If correct then R&P may be the only mechanised mining method applicable UG for Opasura. So it doesn't matter if it is cheaper than any other method only that it is able to turn Opasura UG into a mine. That is anything (UG) not mineable by open pit is actually ore and not waste.
I suspect well performed R&P will be applicable to some, but not all, currently identified UG resources at Opasura IF THE STUDIES SHOW SUITABLE ECONOMICS.

When I first looked at R&P via google it looked like a very flexible mining method whereby relatively minor variations and faulting could be accommodated, within reason, by various well known methods (Ramps, multiple cuts for thick sequences were among things I remember). As you suggest variants of these may end up being used at Opasura.

Exploration may identify more steeply dipping zones (Mina Blanca section?) and possibly even chimney style (vertical/sub vertical) zones. Mining methods for either of these styles would be different.

Hopefully there is a massive porphyry under Opasura that can be block caved and take AZS away from current prices in the right direction. I'd happily settle for 30% of such a beast at Alacran with Teck.

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After posting yesterday I had some more thoughts about the genesis of Opasura. What is known and how it may lead to improved exploration and modelling.

By no means complete but some of these points could be considered in any model.

• Timing of mineralisation - Pre secondary faulting from what has been shown so far though detailed core logging may show otherwise.
• Post Candelaria/Arenillas/Revancha deposition/formation.
• Strongest on the Arenilla/Revancha contact (so far) but present at multiple levels in all three units.
• Hints that mineralisation decreases in some directions at OpE and W. hence the suggestion of a feeder up the major Arroyo de Campo fault on this image.
• An early plot of mine showed Zn/Pb ratios at OpE appeared to have a local high Zn concentration that Glen Jardine (pers. comm.) confirmed in principle. No idea what this is suggesting about deposit generation but this and the variability of Ag in the deposit would be something of at least academic interest.
• There is often an overlap between academic and mining/economic interests that can be a win win for both.
• Research into similar deposits locally and worldwide may give some clues as well. Another line to pursue. Santa Eulalia/San Felipe/Plomosa come to mind easily.