Azimut Exploration (TSXV:AZM) - High-Grade Gold & Antimony Discoveries Drive Development Pivot

Key Concepts

• Prospect Generator: A company that identifies and generates mineral exploration projects, then farms them out to larger companies in exchange for equity, carried interest, or upfront payments.
• Development Company: A company focused on advancing discovered mineral deposits through the resource definition and preliminary economic assessment (PEA) stages.
• Nickel-Copper-PGE Discovery: A mineral deposit containing nickel, copper, and Platinum Group Elements (PGEs), such as platinum and palladium.
• Antimony-Gold Deposit: A mineral deposit where antimony and gold are the primary valuable commodities.
• Visible Gold (VG): Gold that is visible to the naked eye in rock samples.
• Preliminary Economic Assessment (PEA): An early-stage study that assesses the economic viability of a mineral project.
• Scoping Study: A preliminary technical and economic assessment of a project, typically conducted before a PEA.
• Ultramafic Flows: Layers of ultramafic rock, which are igneous rocks rich in magnesium and iron, often associated with nickel deposits.
• Kambalda Type Nickel Deposit: A specific style of nickel deposit found in Western Australia, characterized by high grades and association with ultramafic rocks.
• VMS (Volcanogenic Massive Sulfide) Deposit: A type of hydrothermal mineral deposit formed on the seafloor, often containing copper, zinc, gold, and silver.
• IP Anomalies (Induced Polarization): Geophysical anomalies detected through electrical resistivity surveys, which can indicate the presence of mineralized zones.
• Chargeability and Resistivity: Geophysical parameters measured in IP surveys, indicating the ability of rock to store electrical charge and its resistance to electrical current, respectively.
• Metallurgical Test Work: Laboratory tests to determine the amenability of a mineral deposit to processing and recovery of valuable metals.
• Cutoff Grade: The minimum grade of ore that can be economically mined and processed.
• First Nations: Indigenous peoples of Canada.
• CRE (Conseil de la Première Nation Abitibiwinni): A First Nation council in Quebec.

Azimut Exploration: Evolution and Project Portfolio

Azimut Exploration, led by President and CEO Jean-Marc Marula, is transitioning from a pure prospect generator to a development company. With 40 years of global experience in mineral exploration, Marula emphasizes the company's focus on Quebec and its strategy of generating and advancing projects to discovery. The company is now evolving to advance its most promising discoveries towards the resource and Preliminary Economic Assessment (PEA) stages.

Kukamas Project (Nickel-Copper-PGE)

• Partnership: Azimut is partnered with KGHM on the Kukamas project, where they have made a significant nickel-copper-PGE discovery.
• Discovery Details: The discovery is characterized by high grades, with assays up to 19.6% nickel and 15 g/ton platinum and palladium, along with other PGEs. The deposit is described as "wide open" and advancing well.
• Geological Understanding: Key progress includes identifying seven separate ultramafic flows, indicating a Kambalda-type nickel deposit, which is unique for Quebec. The potential for additional zones along strike, at depth, and around the discovered area is high.
• Exploration Progress: A 4,000-meter drill program with 14 additional holes has been completed, with assays pending. Azimut is also exploring for potential gold-rich massive sulfide systems within the 40-kilometer-long, largely underexplored property.
• Earn-in Agreement: KGHM has spent approximately $5 million to earn a 50% interest and has the option to earn an additional 20% by delivering a PEA, a process expected to take two to three years. Azimut may remain the operator.
• Future Plans: KGHM is reviewing a significant new drill program proposal.

Wabamisk Gold Project

Azimut is advancing several gold discoveries within the Wabamisk project, notably the 14 Zone and the Rosa Zone.

14 Zone (Antimony-Gold)

• Discovery Driver: The 14 Zone is driven by a large, regional-scale antimony anomaly in lake bottom sediments.
• Initial Discovery: Azimut initially identified a small antimony prospect (2.7% antimony). Upon regaining 100% ownership, they began exploring and discovered a new showing with 25% antimony, a tenfold increase.
• System Size and Mineralization: The system is extensive, with a confirmed strike length of at least 1.8 kilometers, open to the west and east, and completely open at depth. Mineralization has been tested down to 250 meters and remains strongly mineralized. The system is wide and continuous, with mineralized envelopes up to 50 meters thick, and likely contains higher-grade shoots (above 1% antimony).
• Drilling: Approximately 12,000 meters of drilling in 86 holes have been completed.
• Antimony and Gold Potential: Azimut is actively exploring for both antimony and gold. They are investigating the potential for a deeper, gold-rich zone, a pattern observed in other antimony mines where gold grades increase with depth below antimony-rich zones. While significant gold grades have been found at surface, sparse high-grade gold is currently related to antimony grades.
• Metallurgical Work: Metallurgical test work is underway with SGS, with preliminary results being encouraging.
• Permitting and Environmental: Azimut has a good relationship with First Nations and is not concerned about permitting or environmental considerations in Quebec.
• Future Plans (2026): Further drilling is planned to define the size of the antimony deposit and to explore for the vertical zonation of gold.

Rosa Zone (Gold)

• New Discovery: The Rosa Zone is a recent discovery, with the first recorded exploration in the area dating back to 1935. Azimut's work began last year with a grab sample returning 1.3 g/ton gold.
• Outcropping Mineralization: The discovery is an outcropping, strongly mineralized, gold-bearing zone with abundant visible gold (VG). This was a surprise, as 11 other companies had previously explored the area without recognizing this zone.
• Strike Length and Correlation: A 200-meter strike of almost continuous outcrops with VG has been identified, with an additional 100 meters of strike extension further east, defining a 300-meter strike of high-grade gold outcrops. This zone strongly correlates with IP anomalies (chargeability and resistivity) that extend for 1.4 kilometers, with a 700-meter section of defined gold-bearing outcropping prospects within this IP target.
• Drilling Results: Drilling has yielded coherent results with surface observations. Assay results are pending and expected within the next few weeks, which will be crucial for planning the next drill program.
• Gold Controls and Trends: Visible gold is related to quartz veining, including quartz networks, shear veins, and extensional veins. The amount of VG is unusual, and fine gold is also present. The gold is associated with meta-sediments, suggesting a good system for pervasive mineralization. A second sub-parallel gold trend is also being observed.
• Future Plans (2026): The company aims to accelerate towards defining a resource, driven by expected good results. Expansion of the zone along strike and at depth is a priority, as the system's thickness is not fully defined. VG has been observed outside of IP anomalies, potentially related to a wider zone with strong resistivity.

Elmer and Pwan Projects (Gold)

• Development Focus: Azimut is moving towards development or partnership on these projects.
• Scoping Study: A scoping study for Elmer is well advanced. The existing resource was defined using a gold price of $1,800/oz.
• Resource Expansion Potential: Azimut has acquired additional claims further west, providing new ideas for extending the Pwan project. They believe there is significant potential to incrementally expand the existing gold-bearing resource at Elmer by adding holes along strike, as the resource is not limited by barren holes.
• Additional Targets: Additional targets have been defined along strike at Elmer, which may correspond to gold, copper, and silver targets further west and east.
• Strategy: Azimut sees Elmer as a classical case of a gold resource in the Val-d'Or area, where additional drilling can significantly change the perception of a previously underestimated resource.
• Partnerships: Ano and Center are mentioned as strategic partners.
• Future Plans: A drill program for Elmer and Pwan will be defined early next year. Azimut plans to advance projects rationally and systematically, with the ability to accelerate if needed.

Company Evolution and Strategy

• Transition to Development: Azimut is shifting from a pure prospect generator to a more focused developer, aiming to advance its discoveries to the PEA and potentially pre-feasibility study stages.
• Portfolio Simplification: The company is in the process of simplifying its business by reducing its project portfolio to focus on two to three key discoveries.
• Partnerships: Azimut continues to work with strong partners like KGHM, Rio Tinto, and Squamish, benefiting from their funding and expertise with no downside risk for Azimut.
• 100% Owned Projects: The company is advancing its 100% owned gold projects, aiming to retain them for future development.
• Market Expectations: The market is looking for Azimut to demonstrate its ability to move multiple projects through development with the right models for each.
• Team and Experience: Azimut is confident in its team's experience in advancing projects and its ability to manage multiple initiatives.
• Financial Position: The company has sufficient cash reserves to fund its planned activities.

Conclusion

Azimut Exploration is undergoing a strategic transformation, moving from a prospect generator to a development-focused company. With a portfolio of promising discoveries in Quebec, including the Kukamas nickel-copper-PGE project and the 14 Zone and Rosa Zone gold projects, Azimut is well-positioned to create shareholder value. The company's strategy involves focusing on its best discoveries, leveraging strong partnerships, and systematically advancing projects through the development pipeline. The upcoming assay results and planned drilling programs are key catalysts for demonstrating the potential of these assets.