Azimut Exploration Inc.

Elmer

Region

James Bay

Size

29,200 Ha

Metals

Au-Ag-Cu-Zn

Target Style

Shear-zone hosted / Intrusion-related Au systems

Stage

Advanced Stage - Target Identified

Operator

AZM

Ownership

100% Azimut

2024 Planned Program

Follow up drilling program

Introduction

The Elmer property is Azimut’s most advanced project. During the maiden 2019 diamond drilling program, the company made a significant gold discovery at the Patwon Gold Zone. The main highlight was a drill hole returning 102.5 m grading 3.15 g/t Au, including 10.1 g/t Au over 20.5 m. Subsequent drilling programs have expanded the zone and confirmed the potential for other significant mineralization on the property.

The property is located 5 km west of the Billy-Diamond Highway and 60 km from Eastmain, a Cree community on the east coast of James Bay. The property provides a controlling position over a 35-km-long gold corridor known as the Elmer Trend in an underexplored greenstone belt, considered highly prospective for shear-zone hosted and intrusion-related gold deposits.

Azimut has diligently advanced the project and the Patwon Zone has now been outlined over a strike length of nearly 600 m, to a minimum vertical depth of 860 m, with an average estimated true width of 35 m.

The results of an initial mineral resource estimate for the Patwon Zone completed in 2023 returned 311,200 oz Au in the indicated category and 513,900 oz Au in the inferred category (PR November 21, 2023). It confirms the quality of the gold mineralization in the Patwon Zone and supports additional exploration to further expand the mineral inventory. Two objectives have been defined for the upcoming drilling program, which is scheduled to commence in early 2024:

Expand the Patwon Gold Zone, which remains open near surface along strike, using shallow drill holes from surface down to a vertical depth of 300 metres; and
Follow up on significant gold-bearing zones along shear zones directly on strike or subparallel to Patwon. The main drill-ready target zones have a cumulative strike length of 20.5 kilometres.

Exploration activities have taken place on the Elmer property and its vicinity since the 1980s after the discovery of high-grade Au-Ag-Cu-Zn showings. Most historical prospects are located within an ENE-WSW corridor 12 km long by up to 3 km wide.

2018-2019: Early Success

Azimut first sampled the Patwon Zone in October 2018, which quickly delivered substantial surface gold results. Over the 2018-2019 exploration seasons, Azimut completed:

Detailed prospecting (354 grab samples, including 90 collected from the Patwon Zone), with 14 samples yielding grades above 5 g/t Au including 54.6 g/t Au, 25.6 g/t Au, 20.7 g/t Au.
Channel sampling totalling 332 samples for 303.18 m, including 279 samples for 252.41 m from Patwon, defining a wide gold-bearing envelope with best composite grades of 9.52 g/t Au over 7.1 m (Elm-11), 36.3 g/t Au over 2.0 m (Elm-10) and 22.1 g/t Au over 2.95 m (Elm-9)

(see PRs of July 16, 2019; September 19, 2019; and October 22, 2019)

Based on this early success, an initial 1,000 m maiden drill program was completed in late 2019 with the first four holes displaying mineralization, including native gold grains in each hole.

2019-2020: Drilling Discovery

On January 14, 2020, Azimut announced a substantial drilling discovery during the maiden drilling program on Patwon (996 m of oriented core in 7 holes). This first program returned frequent high-grade intervals and visible gold in all seven holes with a best result of 102.0 m interval grading 3.12 g/t Au, including 10.1 g/t Au over 20.5 m (hole ELM19-002).

A follow-up program (34 holes for 7,401 m) was completed over the 2020 season, confirming the discovery of a consistent steeply dipping gold-bearing zone traced over a strike length of 500 m to a depth of 250 m with true widths up to 80 m.

2021: Validation Program

The Phase 3 program (30 holes for 10,101 m), completed between March to June 2021, continued to confirm the quality of the gold zone with Hole ELM21-086 returning 24.04 g/t Au over 18.0 m (from 254 m to 272 m), including 38.7 g/t Au over 9.0 m. These new results further confirmed the robustness and strong growth potential of the Patwon Zone (see PRs dated May 19, 2021, June 22, 2021, July 20, 2021, November 04, 2021).

At the end of this program, the mineralized body was defined over a strike length of 520 m and a minimum depth of 450 m.

2022/2023: Patwon Delineation Program

The 2022 diamond drilling program was designed to further expand the Patwon Zone and to assess additional targets in proximity to this zone.

Based on the results, Azimut has attained one of the program’s initial goals. Patwon has now been outlined along a strike length of 600 m, from surface to a depth of 860 m, with an average estimated true width of 35 m and a dip of 70° to 75° to the north. This zone remains open at depth and probably along strike. The results included numerous wide mineralized intercepts in multiple holes and many intervals carrying visible gold. The deepest results may indicate a slight change of the mineralized body axis, which appears to shift to the east at depth. A new subparallel zone was identified about 300 m north of the main Patwon Zone (PR of January 17, 2023). It is marked by a prominent interval grading 82.1 g/t Au, 87.0 g/t Ag and 124.5 g/t Te over 0.5 m in hole ELM22-177. Another intercept from this zone returned 33.9 g/t Au, 40.8 g/t Ag and 58.1 g/t Te over 0.5 m from hole ELM22-134.

The complete results of this phase have been incorporated into an initial mineral resource estimate that will be supported by a technical report compliant with National Instrument 43-101. This report is being prepared by InnovExplo, a highly regarded Val-d’Or-based consulting company in geology and mine engineering.

A complete list of results is provided in the PR of June 29, 2023 and on the following webpage: Elmer Drilling Data.

2022: Property-wide Exploration Drilling Phase

The property covers a 35-km-long highly prospective greenstone belt that remains largely underexplored, with a significant additional discovery potential that can be supported by surface work. Azimut has initiated a property-wide exploration drilling program targeting 12 sectors located along strike and subparallel to Patwon. These targets have been defined following the systematic collection of data including:

507 reverse circulation (“RC”) holes for 6,681 m of drilling;
IP and high resolution heliborne magnetic surveys;
Prospecting and till sampling; and
Complete geological and structural reinterpretation of the property.

Drilling was completed to follow-up on results over multiple kilometre-long sectors: Gabbro Prospect, 881 Zone and Wolf Prospect (press releases of November 11, 2021 and April 6, 2022). The most salient results from this program include the recognition or confirmation of several gold-bearing sectors:

Patwon East: A 1.5-kilometre-long gold-bearing area encountered in 11 mineralized holes along the eastern strike extension of the Patwon Zone. Best intercepts include 1.35 g/t Au over 8.87 m, including 15.30 g/t Au over 0.57 m, in hole ELM22-225 and 122.0 g/t Au over 0.5 m in hole ELM21-088.
Gabbro: A gold-bearing shear-related zone at least 1.3 kilometres long, confirmed by drilling about 400 metres south of the Patwon Zone.
Patwon West and Wolf: Two areas with encouraging drilling results that remain largely underexplored.

(see PR dated June 29, 2023)

On January 4, 2024, Azimut filed on SEDAR+ an independent Technical Report prepared in accordance with National Instrument 43-101 for the Patwon Gold Zone on its 100% owned Elmer Property in the Eeyou Istchee James Bay region of Quebec, Canada. The Report, titled “Technical Report and Initial Mineral Resource Estimate for the Patwon Deposit, Elmer Property, Quebec, Canada”, is dated January 4, 2024, and supports the disclosure in a press release issued by the Company on November 21, 2023, of an initial mineral resource estimate for the Patwon Gold Zone.

The report is also available here: NI 43-101 Technical Report

The MRE considers three potential mining methods for Patwon and comprises:

Open-pit mineral resources using a 0.55 g/t Au cut-off:
Indicated: 309,200 oz in 4.97 Mt grading 1.93 g/t Au
Inferred: 310,700 oz in 4.21 Mt grading 2.29 g/t Au

Bulk underground mineral resources using a 1.05 g/t Au cut-off:
Inferred: 163,700 oz in 3.49 Mt grading 1.46 g/t Au

Selective underground mineral resources using a 1.90 g/t Au cut-off:
Indicated: 2,000 oz in 0.022 Mt grading 2.83 g/t Au
Inferred: 39,500 oz in 0.52 Mt grading 2.36 g/t Au

Total mineral resources:
Indicated resources: 311,200 oz in 4.99 Mt grading 1.93 g/t Au
Inferred resources: 513,900 oz in 8.22 Mt grading 1.94 g/t Au

The MRE is based on approximately 60,609 m of diamond drill core in 167 holes drilled by Azimut between November 2019 and March 2023.

The MRE confirms the quality of the gold mineralization in the Patwon Zone and supports additional exploration to further expand the mineral inventory. 3D modelling of the gold zone indicates that Patwon remains open along strike and at depth. Incremental drilling at shallow depth along strike could add resources to the initial MRE. Furthermore, a sensitivity analysis indicates low variability of the MRE under various gold price and cut-off grade scenarios, underscoring the robustness of the Patwon Gold Zone.

Patwon Gold Zone – 2023 Mineral Resource Estimate

Patwon Gold Project
Bulk Underground Mineral Resource (at 1.05 g/t Au cut-off)
Category	Tonnes (t)	Grade (g/t Au)	Ounces (oz Au)
Indicated
Inferred	3,496,000	1.46	163,700
Selective Underground Mineral Resource (at 1.9 g/t Au cut-off)
Category	Tonnes (t)	Grade (g/t Au)	Ounces (oz Au)
Indicated	22,000	2.83	2,000
Inferred	520,000	2.36	39,500
Open-Pit Mineral Resource (at 0.55 g/t Au cut-off)
Category	Tonnes (t)	Grade (g/t Au)	Ounces (oz Au)
Indicated	4,972,000	1.93	309,200
Inferred	4,212,000	2.29	310,700
Patwon Gold Project Total Resources
Category	Tonnes (t)	Grade (g/t Au)	Ounces (oz Au)
Indicated	4 994 000	1.93	311,200
Inferred	8,228,000	1.94	513,900

Notes:

These mineral resources are not mineral reserves as they do not have demonstrated economic viability. The MRE follows current CIM Definition Standards (2014) and CIM MRMR Best Practice Guidelines (2019). A technical report titled “Technical Report and Initial Mineral Resource Estimate for the Patwon Deposit, Elmer Property, Quebec, Canada”, and dated January 4, 2024, has been filed on SEDAR+. The results are presented undiluted and are considered to have reasonable prospects for eventual economic extraction (“RPEEE”).
The independent and qualified persons (“QPs”) for the mineral resource estimate, as defined in NI 43-101, are Martin Perron, P.Eng., Chafana Hamed Sako, P.Geo., and Simon Boudreau, P.Eng., all from InnovExplo Inc. The effective date is November 14, 2023.
The estimate encompasses six (6) mineralized domains and one (1) dilution zone developed using LeapFrog Geo and interpolated using LeapFrog Edge.
1.0-m composites were calculated within the mineralized zones using the grade of the adjacent material when assayed or a value of zero when not assayed. High-grade capping on composites (supported by statistical analysis) was set between 15.0 and 40.0 g/t Au for high-grade envelopes, 0.2 and 12.5 g/t Au for lower-grade envelopes, and 1.0 g/t Au for the dilution envelope.
The estimate was completed using a sub-block model in Leapfrog Edge, with a parent block size of 4m x 4m x 4m (X,Y,Z) and a sub-block size of 1m x 1m x 1m (X,Y,Z).
Grade interpolation was obtained by the Inverse Distance Squared (ID2) method using hard boundaries.
Density values of 2.76 to 2.8 g/cm³ were assigned to all mineralized zones.
Mineral resources were classified as Indicated and Inferred. Indicated resources are defined with a minimum of three (3) drill holes in areas where the drill spacing is less than 20 m, and Inferred resources with two (2) drill holes in areas where the drill spacing is less than 40 m and there is reasonable geological and grade continuity.
The MRE is locally pit constrained. The out-pit resources meet the RPEEE requirement by applying constraining volumes to all blocks (combined bulk and selective underground long-hole extraction scenario) using Deswik Mineable Shape Optimizer (DSO).
The RPEEE requirement is satisfied by having cut-off grades based on reasonable parameters for surface and underground extraction scenarios, minimum widths, and constraining volumes. The estimate is presented for potential underground scenarios (realized in Deswik) over a minimum width of 2 m for blocks 20 to 24 m high by 16 to 20 m long at a cut-off grade of 1.05 g/t Au for the bulk long-hole method (BLH) and 1.90 g/t Au for the selective long-hole method (SLH). Cut-off grades reflect the currently defined geometry and dip of the mineralized envelopes. The potential open-pit component (OP) of the 2023 MRE is locally constrained by an optimized surface in GEOVIA Whittle™ using a rounded cut-off grade of 0.55 g/t Au. The surface cut-off grade was calculated using the following parameters: mining cost = CA$3.55/t; mining overburden cost = CA$2.49/t; processing cost = CA$22.00/t; G&A cost = CA$15.60/t; selling costs = CA$5.00/t; gold price = US$1,800/oz; USD/CAD exchange rate = 1.30; overburden slope angle = 30°; bedrock slope angle = 50°; and mill recovery = 94%. The underground MRE was based on two mining methods, the choice of which depends on the width of the mineralization. The underground cut-off grade was calculated using the following parameters: mining cost = CA$35.00/t (bulk long-hole) to CA$95.00/t (selective long-hole); processing cost = CA$22.00/t; G&A cost = CA$15.60/t; selling costs = CA$5.00/t; price = US$1,800/oz; USD/CAD exchange rate = 1.30; and mill recovery = 94%.
Cut-off grades should be re-evaluated in light of future prevailing market conditions (metal prices, exchange rates, mining costs etc.).
The number of metric tons (tonnes) was rounded to the nearest thousand, following the recommendations in NI 43-101. The metal contents are presented in troy ounces (tonnes x grade / 31.10348) rounded to the nearest hundred. Any discrepancies in the totals are due to rounding effects.
The QPs are not aware of any known environmental, permitting, legal, title-related, taxation, socio-political, or marketing issues or any other relevant issue not reported in the Technical Report that could materially affect the Mineral Resources Estimate.

The Elmer property is located in the central region of the La Grande Subprovince (Archean Superior Province). The faulted boundary between the La Grande and Opinaca-Nemiscau subprovinces is 4 km south of the main claim block, and passes through the smaller secondary block. The property is underlain by the Lower Eastmain greenstone belt, composed of a volcano-sedimentary sequence up to 15 km thick. Regional metamorphism reached greenschist to amphibolite facies.

At the property scale, four distinct geological formations compose a volcanic sequence of mafic to felsic tuffs, rhyolite/rhyodacite and basalt, intruded by gabbro and tonalite. All units on the main block are affected by two major shear zones: a Central Fault and a Southern Fault. Secondary structures occur between these major shears, particularly in the property centre, where they are visible on the Patwon outcrop. In the vicinity of these faults, carbonate-chlorite-sericite alteration accompanies pyrite mineralization associated with quartz veins.

Metamorphism on the property primarily reflects greenschist conditions, locally reaching upper amphibolite facies.
Gold is found mainly in volcanic units dominated by felsic tuffs, rhyolite/rhyodacite and basalt, and, to a lesser extent, in felsic intrusives. It is associated with quartz veins and their altered and pyritized wall rocks. Pyrite is the most common sulphide in mineralized areas. Along vein selvages, it is present in cubic form; inside the veins, pyrite is disseminated, semi-massive or in trace quantities. Traces of chalcopyrite and galena have also been identified inside some quartz veins. Native gold has been observed in multiple drill holes on the Patwon discovery.

Key features of the Patwon Zone

Patwon displays remarkable continuity from surface to a minimum vertical depth of 860 m (about 900 m along dip) where it remains open at depth and possibly along strike. The zone has been outlined over a strike length of nearly 600 m, with an average estimated true width of 35 m.
It has a robust and consistent core zone with grade x thickness (“GT”) factors above 50 based on estimated true widths. At Patwon, visible gold in drill core is generally a reliable predictor for GT factors close to or higher than 50.
The zone appears geometrically simple, with no internal complexity due to folding and no cross-cutting barren dykes, potentially creating internal dilution. It is spatially correlated with a vertically dipping felsic intrusion, indicating an excellent possibility for a kilometre-scale vertical extent.
The mineralization is mainly related to three quartz-vein networks and their wall rock alteration haloes, with pyrite as the dominant sulphide, occurring as fine to coarse disseminations, cross-cutting stringers and semi-massive to massive lenses. Visible gold is frequent. Traces of galena, chalcopyrite and molybdenite are also present. Alteration consists of pervasive silica accompanied by sericite, carbonate, chlorite, feldspar, tourmaline and occasional fluorite.
The intensity of quartz veining may be partly controlled by rheologic contrasts between host lithologies (felsic intrusives, felsic volcanics and mafic rocks) within an extensive shear zone.
Patwon is a gold-only system with no deleterious elements, such as arsenic or bismuth. Preliminary metallurgical tests indicate non-refractory free-milling gold mineralization that is potentially easily recoverable by a combination of gravity circuit and conventional cyanide leaching. Combined gold recoveries for gravity and cyanidation reached 94% and 93% for two samples grading 3.92 g/t Au and 2.95 g/t Au, respectively.
The preliminary geometry supports the concept of an initial open pit mining operation. The consistent high-grade component in most holes also suggests the potential for an underground mining component.
Patwon is an orogenic gold system in a 3-km-thick sequence of felsic volcanics with porphyritic intrusions, mafic volcanics, polymictic conglomerates and gabbroic sills. This deposit type has the potential for kilometre-scale vertical extension. One possible geologic analog is the Goldex mine, owned and operated by Agnico Eagle.

Possible analog for the Patwon Zone and potential of the Elmer Trend

Comparing already known deposits with the features of a new discovery is a key step in supporting the exploration hypothesis and envisioning the upside potential of the discovery, even if each deposit is ultimately different. Key features of the Goldex deposit (Agnico Eagle Ltd) are presented for comparison with Patwon. Goldex is a multi-million-ounce gold mine to the west of Val-d’Or. Agnico Eagle’s reserve and resource statement of December 31, 2021, disclosed proven and probable reserves of 19.37 Mt at 1.60 g/t Au for 0.99 Moz of gold, measured and indicated resources of 36.58 Mt at 1.56 g/t Au for 1.84 Moz, and inferred resources of 24.51 Mt at 1.56 g/t Au for 1.23 Moz. The steeply dipping orebody (strike of 450 m, depth of 1.8 km) is hosted in a large tabular felsic intrusion surrounded by volcanic rocks.