Azucar Minerals (TSX-V: AMZ) CEO Morgan Poliquin on Drilling Progress in the Norte Zone at the El Cobre Project in Mexico

Gerardo Del Real: This is Gerardo Del Real with Resource Stock Digest. Joining me today is the President and CEO of Azucar Minerals. Mr. Morgan Poliquin. Morgan, how are you? I understand you have quite a bit of snow to work through.

Morgan Poliquin: Yes, I'm great. Thank you very much. Gerardo and you?

Gerardo Del Real: It's interesting times we talked a bit off air about the resurgence in COVID cases around the world that includes the U.S. that includes Mexico. You had some good news here recently, where you announced the resumption of drilling at the El Cobre, Copper Gold Project in Mexico. I will caution, of course, as I'm sure you will, that it's a fluid situation because of COVID. Obviously, I'm excited to see the drill bit turning again. I want to talk about the target and where you are resuming the turning of that drill bit. But I do want to caution that, obviously, things are unfolding in real time, and it could be that you only get X amount of drilling. Let's hope that's not the case. Let's hope that things stay stable and that we're able to see a proper drill testing of the Primo Zone, which I understand is where the drill bit has picked up.

Morgan Poliquin: Yes. Well, thank you very much for that. It is a fluid situation and, obviously, the health and safety of our communities and our workers are the top thing. So we're taking it day-by-day, as I think everyone in the world is as things shift and change. But that being said, we got underway drilling since we shut down. We shut down probably near the end of a hole that we wanted to go a little deeper in this Hole-108, so, which is in the Primo Zone. We have a lot that we want to contemplate there. We got some really good results there in some of our first drilling. It seems like we haven't been able to find exactly how it's oriented or the source of it.

So we have a few holes that we'd like to do in that area to really figure that out. But again, the Primo Zone is one of many targets on the project, as I hope people who have been following understand. So it's kind of a blessing and a curse to have lots and lots of targets, because you've got a very discreet, easy one target project, is easier to plan around. But we've got lots of targets, which is of course in the end a very exciting proposition. But it's obviously always a logistical contemplation of which you hit first and how you go about it.

Gerardo Del Real: As far as prioritizing which targets you drill first, what is the approach moving forward? Assuming that the COVID situation remains stable? Obviously you just announced a very, very robust resource from the Norte Zone. Do you plan on expanding on that zone while simultaneously exploring for new zones, and new mineralization in existing zones? Or how do you mix and match that?

Morgan Poliquin: Well, that's the excellent question that I don't think I have an excellent short answer for. Because in different times in pre-COVID times, you might contemplate having two or three drills doing different things at the same time. At this point in time, I don't think that's something we're contemplating. We're having a small approach. Out of our cautious approach, an appropriate approach, I think, to health and safety. So, we have to do one thing at a time what that means with one drill. We're thinking about after 108 could be the next holes in the Primo Zone, but we also have some targets.

You mentioned expanding the Norte Zone, and we have something called the Porvenir Zone. Which we think is an exciting target that hasn't had a lot of drilling recently. But has some real potential from the pastoral results there. Then we have deeper targets that we'd like to explore in various parts of the property as well. So there's a lot on the go. I think, the truth is we're kind of prioritizing it right now and we're taking it day-by-day. We hope to keep updating people more regularly now that we've got underway.

Gerardo Del Real: Do you want to provide a brief overview for the newer speculators in the space that are perhaps looking for leverage to a rising copper price, which is currently right around the $320 a pound level? Also of course the leverage of the current gold price, which lists even after this consolidation, we're sitting here flirting with $1,900 at $1,887. Obviously the Norte Zone and the resource you've recently announced provides leverage to both copper and gold. You of course have excellent, excellent infrastructure at the project. Maybe just a brief overview on that resource?

Morgan Poliquin: Yeah, that would be great. Thank you for the opportunity. So the Norte Zone is the first resource we've reported on the El Cobre project, the first copper gold porphyry. Really it's gold is the dominant in terms of value. It's more than 50% of the value. These are gold copper porphyry systems, and they come right up to surface. They're exposed at surface in some cases. In other cases we're seeking a deeper, deeper portions of the system. But that is the key aspect you mentioned is the infrastructure is porphyry systems are generally speaking, large tonnage, lower grade, they're the dominant source of copper in the world, molybdenum. I think, more than three quarters of the world's gold, if I'm not mistaken, come from porphyry systems around the world.

So these are a class of deposits that are very exciting because they have long mine life. People look for them wherever they can find them. In our case, we're sort of less than 10 kilometers from a power plant, from a highway system where 200, 300 meters sort of thing above sea level. We're not 5,000 meters above sea level, like where some of these are developed in the Andes, and near ports, and a major infrastructure. So for a large tonnage, generally these are higher upfront capital porphyry systems in general terms. You want to find them in areas that are permissive for development.

So we've got numerous targets on the property is the other side of things. We feel that the past focus of this sort of region has been more on the gold side of things in nearby projects and properties. So, we've really since 2013, been able to sort of focus on the El Cobre side of things and made our discovery of the Norte Zone. There was some past drilling, but what we consider to be the real defining moment was in 2016, I believe... time flies here. Where we put a hole through there and really define the potential of the Norte Zone.

Then obviously a new company was formed around that discovery. We really have focused on that for a couple of years. A large Australian company came in as a major shareholder of that new company, Newcrest. They focus on these types of porphyry systems around the world. So the last few years of being really sort of getting to the resource stage in the Norte Zone. Now I think what we need to do is get back to our knitting. Which is hopefully finding some of the sniffs around in this five kilometers of porphyry potential we've defined, following up some of the sniffs. Also some of the zones, we also, we have some initial holes into, refocusing. So it's a challenging situation, especially in COVID to have so many targets. But we've got some good ideas of how to focus and we'll be letting people know what those ideas are.

Gerardo Del Real: Morgan, thank you for the update. It's great to see the drill bit turning. I hope that remains the case. Stay safe, stay healthy. I sense of course that between Almadex, Almaden, and Azucar, you and I will likely be chatting sooner rather than later.

Morgan Poliquin: Really appreciate the opportunity. Yeah. Same to you and your listeners. Stay safe, take care. Thanks.

Gerardo Del Real: Thank you, Morgan.