Pozo de Nacho (molybdenum-copper; earning 51%)

Pozo de Nacho is located 95 kilometres southeast of Hermosillo on the western edge of the highly mineralised Sierra Madre Occidental region. The district contains several large molybdenum deposits, including the Cumobabi mine (46.5Mt @ 0.2% MoS₂ and the El Creston deposit (177Mt @ 0.13% MoS₂).

Azure completed two drilling programs between September 2006 and September 20007 comprising seven diamond core holes and four RC holes totalling 2,432 metres. Results confirmed the presence of a large, molybdenum-rich zone of mineralisation within an intrusive porphyry system and the surrounding sedimentary sequence.  Significant drill intercepts are presented in Table 1.

A substantial body of molybdenum mineralisation has been intersected over an area of 800 by 250 metres, and from surface to depths in excess of 300 metres. The mineralised zone remains open to the east, west and north.

Mineralisation is present as veins and coarse to fine disseminations of molybdenite (molybdenum sulphide:MoS₂) hosted within strongly altered quartz porphyry and surrounding sediments (sandstones and siltstones).  Chalcopyrite (copper sulphide) mineralisation is present in the drill core, producing modest copper grades. Silver mineralisation is also present in moderate amounts throughout the system.

A large number of assays exceed 0.1%MoS₂ which augers well for delineating higher grade zones of mineralisation with future drilling.

Further confirmation of the extent of the molybdenum mineralisation was recently provided when the Company’s acquisition of historical data revealed that 13 vertical percussion holes were drilled on the Pozo de Nacho property by Canadian company Cominco (a predecessor of Teck Cominco) in 1977. Seven of the 13 Cominco holes were drilled within Azure's principal area of interest to depths of between 58 to 85 metres.

Cominco collected samples at 10 foot (approximately 3.05 metres) intervals and assayed for molybdenum and copper.  Assay results indicate that all seven holes intersected molybdenum mineralisation.

To confirm the validity of the historical drilling results, Azure drilled a diamond core hole (PDN-DD-006) adjacent to two of the historical holes (PCH 01 and PCH 01B). Results from PDN-DD-006 (138.9 metres grading 0.07% MoS₂ from 12.0 to 150.9 metres) confirm the Cominco results, providing confidence in the historical assays and geological interpretation.

Azure has planned follow-up diamond drilling for early 2008 at Pozo de Nacho to define the extent and fully delineate the potentially economic molybdenum mineralisation. In addition, deeper drilling will be undertaken to investigate the porphyry copper potential at depth beneath the molybdenum-rich zone.

Table 1: Significant Drill Intercepts - Pozo de Nacho Project

Hole No	From (m)	To (m)	Interval (m)	Molybdenum Mo (ppm)	Molybdenum MoS2 (%)	Copper  (%)	Silver (ppm)	Comment
PDN-DD-01	254.0	356.8	102.8	294	0.05	0.03	0.9	Hole ended in mineralisation
including	280.0	285.0	5.0	1,382	0.23	0.02	0.8
PDN-DD-03	8.8	133.0	124.2	304	0.05	0.08	3.8
including	119.0	133.0	14.0	859	0.14	0.11	7.3
PDN-DD-04	68.0	251.7	183.7	303	0.05	0.06	1.6	Hole ended in mineralisation
PDN-DD-06	12.0	150.9	138.9	439	0.07	0.06	2.3	Hole ended in mineralisation
PDN-RC-02A	1.5	199.6	198.1	438	0.07	0.04	1.5	Hole ended in mineralisation
including	41.1	61.0	19.9	736	0.12	0.03	1.1

NOTE:   Original samples of “DD” drill holes were all half core
             Original samples of “RC” drill holes were all riffle-split drill cuttings
             Re-assays were conducted on sample pulps from original samples
             Assays were undertaken by ALS-Chemex (Vancouver) using X-Ray Fluorescence method.