Azure Minerals : Nickel-Copper Sulphides Intersected at Second Andover Prospect

ASX RELEASE

22 January 2021

NICKEL-COPPER SULPHIDES INTERSECTED AT

SECOND ANDOVER PROSPECT

Three drill holes intersect shallow Ni-Cu mineralisation at VC-23 target

Azure Minerals Limited (ASX: AZS) ("Azure" or "the Company") is pleased to report that nickel and copper sulphide mineralisation has been observed in each of the first three diamond core holes (ANDD0009, ANDD0010 and ANDD0011) drilled at the VC-23 target ("VC-23") on the Andover Ni-Cu Project (60% Azure / 40% Creasy Group).

HIGHLIGHTS:

• VC-23comprises a high-order, yet separate and distinct group of surface fixed loop (FLTEM) and downhole (DHTEM) electromagnetic conductor plates located 3km northeast of the VC-07 conductor
• Ni-Cusulphide mineralisation was intersected at shallow depths in the first three holes drilled at VC-23; fourth hole ANDD0012 is in progress
• Bands of massive sulphides in holes ANDD0009 and ANDD0011 host nickel and copper sulphide mineralisation, confirmed by pXRF and verified by Azure's on-site geologists
• Downhole electromagnetic (DHTEM) surveying of VC-23 drill holes will commence shortly
• At VC-07, mineral resource drilling is continuing on the 1,050m-long and +200m-deep main conductor with hole ANDD0008 nearing the target zone

Commenting on Azure's latest drilling success at Andover, Managing Director, Mr. Tony Rovira said:

"This is a very exciting result for Azure and highlights the potential of Andover to host multiple nickel- copper sulphide deposits.

"EM surveying has identified numerous conductors indicative of bedrock-hosted sulphide mineralisation and, geologically, Andover does not appear to have any physical characteristics that may generate false positives. Importantly, wherever we have drilled an EM conductor at Andover we have intersected nickel-copper sulphide mineralisation and this 100% hit-rate has continued with the successful drilling of the new targets at VC-23.

"While most of our drilling in 2021 will be focused on delivering a JORC mineral resource for the VC- 07 conductor several other significant, high-priority conductor targets have been identified and drilling of these will be tested concurrently."

1. Level 1, 34 Colin Street, West Perth, Western Australia, 6005 T [phone] | F [phone]

ABN 46 106 346 918 | ASX AZS

www.azureminerals.com.au

Photo 1: ANDD0009 - Semi-massive to massive Ni-Cu sulphides @ 73.0m - 73.7m

Photo 2: ANDD0011 - Semi-massive to massive Ni-Cu sulphides @ 33.1m - 33.8m

1. Level 1, 34 Colin Street, West Perth, Western Australia, 6005 T [phone] | F [phone]

ABN 46 106 346 918 | ASX AZS

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PROJECT OVERVIEW

Regional Targets

Based on FLTEM and DHTEM surveying, 10 first and second-order priority electromagnetic conductor anomalies have been identified within the Andover project area (see Figure 1). Additional detailed FLTEM surveys were completed over several of these anomalies, providing specific targets for follow-up drilling.

Figure 1: Andover Ni-Cu Project - plan showing identified geophysical (FLTEM / DHTEM) targets

VC-23

The first of the high priority targets to be tested in the regional diamond drilling program is VC-23, which comprises several discrete conductor plates identified by both FLTEM and DHTEM surveying. The VC-23 prospect was initially tested by the Creasy Group in 2018 with two Reverse Circulation (RC) drill holes. ADRC005 failed to intersect its target and ADRC006 intersected three zones of nickel-copper sulphide mineralisation associated with an EM conductor, including (ASX: 17 July 2020):

• 2m @ 2.10% Ni and 0.44% Cu from 15m downhole; and
• 6m @ 0.45% Ni and 0.39% Cu from 22m downhole: and
• 6m @ 0.31% Ni and 0.55% Cu from 34m downhole.

Azure's diamond drilling campaign on VC-23 is in progress (see Figure 2) and three holes (ANDD0009, 0010 and 0011) have been completed for 345.4m (see Figures 3 and 4). A fourth hole, ANDD0012, is in progress.

Sulphide mineralisation, comprising pentlandite, chalcopyrite and pyrrhotite, was observed in the three completed holes in various forms, including banded massive, semi-massive, matrix and disseminated sulphides hosted in gabbro and similar mafic rocks. Testing of the drill core by hand-held pXRF indicates the presence of high nickel grades within the massive sulphide bands.

1. Level 1, 34 Colin Street, West Perth, Western Australia, 6005 T [phone] | F [phone]

ABN 46 106 346 918 | ASX AZS

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ANDD0009 targeted shallow, coincident FLTEM and DHTEM conductor plates, intersecting several zones of massive and matrix nickel-copper sulphides proximal to the geophysical anomalies, within an overall 8.6m- wide mineralised envelope commencing at 65.8m down-hole, including:

• 1.2m of massive Ni-Cu sulphides from 65.8m; and
• 0.9m of matrix to semi-massiveNi-Cu sulphides from 69.5m; and
• 0.7m of semi-massive to massive Ni-Cu sulphides from 73.0m (see Photo 1).

Figure 2: Diamond drilling hole ANDD0009 at VC-23 on 13 January 2021

ANDD0010 intersected two broad zones of disseminated nickel-copper sulphide mineralisation approximately 40m to the south of hole ADRC006 completed by the Creasy Group in 2018, including:

• 6.0m of disseminated Ni-Cu sulphides from 61.3m; and
• 10.8m of disseminated Ni-Cu sulphides from 73.2m.

ANDD0011 intersected 3.1m of weathered iron-nickel-copper-rich rocks from 4.1m downhole, which are interpreted to represent semi-oxidised sulphides. Another two narrow zones of partially oxidised nickel- copper sulphides were intersected at the base of this zone:

• 3.1m of iron-nickel-copper gossan (completely weathered) from 4.1m and;
• 0.2m of massive Ni-Cu sulphides (partially oxidised sulphides) from 7.5m and;
• 0.2m of massive Ni-Cu sulphides (partially oxidised sulphides) from 8.3m.

Further down-hole in ANDD0011, and coincident with the modelled EM conductor plates, two zones of massive and matrix to semi-massivenickel-copper sulphides were intersected. This was immediately followed by a broad zone of disseminated and blebby sulphide mineralisation, including;

• 1.3m of massive Ni-Cu sulphides from 32.7m (see Photo 2); and
• 1.7m of matrix to semi-massiveNi-Cu sulphides from 36.7m; and
• 21.4m of disseminated and blebby sulphides from 36.7m.

1. Level 1, 34 Colin Street, West Perth, Western Australia, 6005 T [phone] | F [phone]

ABN 46 106 346 918 | ASX AZS

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