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Unkur Technical Report (October 2018)

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Unkur Technical Report (October 2018) Report to: Azarga Metals Corp. Technical Report and Preliminary Economic Assessment for the Unkur Copper-Silver Project, Kodar-Udokan, Russian Federation Document No. 782-SWIN03024AA_R_001B Report to: AZARGA MINERALS CORP. TECHNICAL REPORT AND PRELIMINARY ECONOMIC ASSESSMENT FOR THE UNKUR COPPER-SILVER PROJECT, KODAR-UDOKAN, RUSSIAN FEDERATION EFFECTIVE DATE: 30TH AUGUST 2018 Prepared by Joseph Hirst, BSc (Hons), MSc, CGeol, EurGeol, FGS Robin Simpson, MAIG Eur Ing Andrew Carter, BSc, CEng, MIMMM, MSAIMM, SME Matthew Randall, BSc (Hons), PhD, CEng, MIMMM SH/vc UK Registration No. 06328315 Coffey Geotechnics Ltd., 1 Northfield Road, Reading Berks, RG1 8AH, UK Trading as Tetra Tech Mining and Minerals, from 2 Apple Walk, Kembrey Park, Swindon, SN2 8BL, UK Tel: +44 (0) 1793 512305 www.tetratech.com TABLE OF CONTENTS 1.0 SUMMARY ........................................................................................................ 1-1 1.1 INTRODUCTION ...................................................................................................... 1-1 1.2 PROPERTY DESCRIPTION ........................................................................................ 1-2 1.2.1 MINERAL TENURE .................................................................................. 1-2 1.3 ACCESSIBILITY, CLIMATE, LOCAL RESOURCE, INFRASTRUCTURE AND PHYSIOGRAPHY .... 1-3 1.4 HISTORY ............................................................................................................... 1-3 1.5 GEOLOGICAL SETTING AND MINERALISATION ............................................................ 1-4 1.6 DEPOSIT TYPE ....................................................................................................... 1-4 1.7 EXPLORATION ........................................................................................................ 1-4 1.8 DRILLING .............................................................................................................. 1-5 1.9 SAMPLE PREPARATION AND ANALYSES .................................................................... 1-5 1.10 DATA VERIFICATION................................................................................................ 1-6 1.11 MINERAL PROCESSING AND METALLURGICAL TESTING .............................................. 1-6 1.12 MINERAL RESOURCE ESTIMATES ............................................................................. 1-6 1.13 MINING METHODS ................................................................................................. 1-7 1.14 RECOVERY METHODS ............................................................................................. 1-8 1.15 PROJECT INFRASTRUCTURE ..................................................................................... 1-8 1.16 ENVIRONMENTAL STUDIES, PERMITTING AND SOCIAL OR COMMUNITY IMPACT ............. 1-9 1.17 CAPITAL AND OPERATING COST ESTIMATES ........................................................... 1-11 1.17.1 CAPITAL COST ESTIMATE ...................................................................... 1-11 1.17.2 OPERATING COST ESTIMATE ................................................................. 1-12 1.18 ECONOMIC ANALYSIS .......................................................................................... 1-12 1.19 RECOMMENDATIONS ........................................................................................... 1-16 2.0 INTRODUCTION ................................................................................................ 2-1 2.1 QUALIFIED PERSONS .............................................................................................. 2-1 2.1 SOURCES OF INFORMATION .................................................................................... 2-2 2.2 UNITS OF MEASUREMENT AND CURRENCY ............................................................... 2-2 3.0 RELIANCE ON OTHER EXPERTS ....................................................................... 3-1 4.0 PROPERTY DESCRIPTION AND LOCATION ...................................................... 4-1 4.1 LOCATION ............................................................................................................. 4-1 4.2 DESCRIPTION ........................................................................................................ 4-1 4.3 PERMIT ACQUISITION AND LEGISLATIVE REQUIREMENTS ............................................ 4-3 4.4 ROYALTIES, RIGHTS, PAYMENTS AND AGREEMENTS .................................................. 4-4 4.4.1 EXPLORATION FEES ................................................................................ 4-4 4.4.2 ROYALTIES ............................................................................................ 4-4 4.4.3 ENVIRONMENTAL LIABILITIES ................................................................... 4-4 4.4.4 PERMITS REQUIRED FOR THE PROPOSED WORK ....................................... 4-4 i 782-SWIN03024AA_R_001B 4.5 SURFACE RIGHTS AND LEGAL ACCESS ..................................................................... 4-5 4.6 OBLIGATIONS TO VENDOR ....................................................................................... 4-6 4.7 PERMITS............................................................................................................... 4-7 4.8 OTHER FACTORS OR RISKS ..................................................................................... 4-7 5.0 ACCESSIBILITY, CLIMATE, LOCAL RESOURCES, INFRASTRUCTURE AND PHYSIOGRAPHY................................................................................................ 5-1 5.1 ACCESSIBILITY ....................................................................................................... 5-1 5.2 LOCAL RESOURCES AND INFRASTRUCTURE ............................................................... 5-1 5.3 CLIMATE ............................................................................................................... 5-1 5.4 PHYSIOGRAPHY ..................................................................................................... 5-2 5.5 SEISMICITY ........................................................................................................... 5-2 5.6 VEGETATION .......................................................................................................... 5-3 6.0 HISTORY ........................................................................................................... 6-1 6.1 EXPLORATION HISTORY .......................................................................................... 6-1 6.1.1 GENERAL EXPLORATION HISTORY TO 2016 .............................................. 6-1 6.1.2 THE 1969-1971 CAMPAIGN ................................................................. 6-1 6.1.3 THE 1975-1978 CAMPAIGN ................................................................. 6-2 6.2 DRILLING .............................................................................................................. 6-3 6.3 SAMPLE PREPARATION AND ANALYSES .................................................................... 6-4 6.3.1 QUALITY CONTROL PROGRAMS ................................................................ 6-5 6.4 GEOPHYSICAL SURVEYS ......................................................................................... 6-5 6.5 HISTORICAL RESOURCE ESTIMATES ......................................................................... 6-7 6.5.1 HISTORICAL NON-COMPLIANT RESOURCE ESTIMATES ................................ 6-7 6.5.2 THE 1972 ESTIMATE ............................................................................. 6-8 6.5.3 THE 1979 ESTIMATE ............................................................................. 6-8 6.5.4 THE 1988 ESTIMATE ............................................................................. 6-9 6.5.5 THE 2014 ESTIMATE ............................................................................. 6-9 6.5.6 HISTORICAL NI 43-101 COMPLIANT RESOURCE ESTIMATE ..................... 6-10 7.0 GEOLOGICAL SETTING AND MINERALISATION ............................................... 7-1 7.1 REGIONAL GEOLOGY .............................................................................................. 7-1 7.2 LOCAL GEOLOGY.................................................................................................... 7-1 7.3 PROPERTY GEOLOGY .............................................................................................. 7-4 7.3.1 UDOKAN SERIES FORMATIONS ................................................................ 7-4 7.3.2 STRUCTURE ........................................................................................... 7-4 7.3.3 INTRUSIVE ROCKS .................................................................................. 7-5 7.3.4 QUATERNARY COVER .............................................................................. 7-5 7.4 MINERALIZATION ................................................................................................... 7-7 8.0 DEPOSIT TYPES ................................................................................................ 8-1 9.0 EXPLORATION .................................................................................................. 9-1 9.1 CHANNEL SAMPLING OF TRENCHES AND OUTCROPS ................................................. 9-1 9.2 GROUND MAGNETIC SURVEY .................................................................................. 9-1 10.0 DRILLING .......................................................................................................
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