Azucar Minerals (TSX-V: AMZ) CEO Morgan Poliquin on Initial Resource Estimate for 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 (TSX-V: AMZ)(OTC: AXDDF), Dr. Morgan Poliquin. Morgan, it's been a bit, how are you?

Morgan Poliquin: I'm excellent. Thank you so much. How are you, Gerardo?

Gerardo Del Real: I am well, thank you for asking. Busy, as you can imagine, and excited about the news that you published on September the 29th. You announced an initial resource estimate – and this is important – just for the Norte Zone at the El Cobre project in Veracruz, Mexico. I think it took most people by surprise. I know it took a lot of people by surprise because I had several email and call me. 

Let me provide a brief overview. You outlined 1.2 million ounces gold equivalent in the indicated category and 1.4 million ounces in the inferred category. I would love for you to get into the details of it because there are quite a few important details that I think bode well for the future of the project.

Morgan Poliquin: Thank you very much, really appreciate this opportunity as always. I've championed this project for a long time. This part of the project, the Norte Zone, is not the first area where we found porphyry mineralization. For new listeners, this is we think a district-scale target. What we mean by that is we have alteration, the rocks that indicate that a porphyry system and related hopefully mineralization like at the Norte Zone. 

We found that over 4 to 5 kilometers. There's multiple targets in there. We drilled a number of them and the Norte is certainly the most advanced. It's the first to have a porphyry gold-copper resource on it here, as we're speaking to. But this is one of many targets on the project.

Our geologic view, as we've mentioned before, is that we're near the top of the porphyry environment. What I mean by that is that we think that porphyry mineralization, the alteration, the character of the rocks indicates that we're not at the bottom of where you would find porphyry mineralization in terms of depth. We think there's a lot to explore beneath us. We've obviously been focused on a number of targets all at once, as well as trying to advance the Norte, which we have done now, to a maiden resource statement. There's lot to do over a really big area and we think there continues to be a lot to do in terms of exploration. Hopefully that's a good introduction for people.

Gerardo Del Real: Excellent, excellent. Let's get into the details of the resource. The indicated category outlined 1.2 million ounces, as I mentioned, of gold equivalent. That breaks down with 47.2 million tonnes grading 0.77 grams per tonne gold equivalent, or 0.49 grams per tonne gold and 0.21% copper. That's the indicated grade. I want to make sure that we emphasize the infrastructure and why this project could very well be very economic with those grades. Can you speak to the infrastructure?

Morgan Poliquin: Yeah, that's an important consideration on any porphyry project anywhere in the world, I think. Obviously porphyries are, generally speaking, big tonnage projects. They tend to be larger size and lower in grade, although that's not always the case of course. But infrastructure is very important when you're thinking about that type of project. There are many in the Andes high up and there many in northern British Columbia. The thresholds are obviously higher the further you are away from power and roads and access to services, et cetera. In this case, we're in Veracruz State, we are just about 60 kilometers away I think by highway, most of the way, from Veracruz Port, which is the largest port in Mexico, I believe. Services and all that sort of stuff is close by.

On the project itself, the Pan-American Highway is very close to the project, as well as a big power plant within 10 kilometers of this infrastructure, and all the other things that go with that, like gas lines and things. In terms of power, which is a key aspect of developing mining projects, we have incredible infrastructure really. The other side of that is also the geography. We're not very high above sea level. You hear of projects being developed at 20,000 feet or 5,000 meters or whatever sometimes in the Andes. We're just a couple of hundred meters, 200 meters roughly, above sea level. This is a project that is blessed with a very good infrastructure.

Gerardo Del Real: You mention in the release that the project is looked at as possibly an open pit mineable project. Can you speak to that?

Morgan Poliquin: Obviously, our independent consultants have reviewed the potential. Any resource has to be reviewed with respect to how you could develop it. Obviously the term is kind of floated, a pit over this. Obviously the Norte Zone comes to surface and basically the drilling has basically traced it. We found it with soil samples that had high copper and gold originally, is how it was found by one of our work programs that was done with one of our previous partners. 

Look, this has got near-surface potential and we see that across the project itself. We think that there is the potential for deeper targets. We've been chasing them and we've had results that are indicative of deeper porphyry mineralization as well. But this has got near-surface potential and so does some of the other zones on the project. As I say, there's a lot going on in this project and it's a kind of an explorationist's dream. But there is a lot going on and a lot of targets to prioritize at any one time.

Gerardo Del Real: You have a market cap, a tiny one I should add, of approximately $14 million Canadian. I believe your cash position is over a third of that right now. Is that accurate, Morgan?

Morgan Poliquin: Yeah. I haven't got an up to the date share price here to confirm that. Obviously, we hope that people will really start to recognize, with this maiden resource, what potential we have on this project. This is the only project in the company and we're very focused on it. We think, at this stage of exploration, it would be really hard to find a project with this kind of potential to explore. I really like this project and always have and I think hopefully people, with the resource we've just put out on Norte, will start to see why I like it a little bit more tangibly, in a bit more of a concrete way obviously.

Gerardo Del Real: You have gold, you have copper, you have the cash to continue exploring. What comes next?

Morgan Poliquin: Right now we are looking at how we're going to balance the two things that I've alluded to. One is continuing to develop and de-risk and explore the already known targets. Those merit their own work programs, I believe. But at the same time, we think that there are still untested areas of the property. This is a very, very large footprint and there is what we call hydrothermal alteration, where the hot fluids that have brought in the copper and the gold in the porphyry environment have affected the rock over quite a large area. We're excited about that big footprint and we think there could be things that we as yet to haven't found.

How you balance those two things, with some of the targets that are already where we've identified mineralization with the blue sky, that's what we're working on right now in the wake of reporting the resource. We hope that we'll be able to inform our shareholders on our plans going forward. Obviously we've had a COVID year and as we reported, already we've got our health and safety protocols in place and we're planning a work as we speak.

Gerardo Del Real: In 2018, the stock traded near the $2 level. I believe if you keep being successful with the drill bit and continue to add pounds of copper and ounces of gold, we could very well be headed to another round trip. Morgan, anything else you'd like to add?

Morgan Poliquin: I think we've covered it really well. I really appreciate the opportunity to speak to your subscribers. Thank you very much, Gerardo.

Gerardo Del Real: Looking forward to having you on more frequently, Morgan.

Morgan Poliquin: Very good. Thank you so much.

Gerardo Del Real: Thank you.