Mithril Resources : MINING CONCEPTS STUDY COMPLETED - COPALQUIN

ASX ANNOUNCEMENT

1 March 2022

MINING CONCEPTS STUDY COMPLETED - COPALQUIN DISTRICT, MEXICO

Highlights

• Mining concepts study completed following the excellent high-grade maiden resource estimate

only	delivered in November 2021 and the recently announced metallurgical test work
• The conceptual exploration access - mine design indicates El Refugio-La Soledad has the
potential as an underground project utilising common contemporary mechanised mining
use
methods suited to narrow to moderate mining widths
• Early underground access initially for exploration drilling is considered as part of longer-term
mining development
• Outcomes of the study will aid design of the future drilling at El Refugio to advance resource
classification and resource expansion
	• Drilling, mapping and geochemical sampling are progressing in the district, and we await
	laboratory assay results for this work
	____________

Mithril Resources Ltd (ASX: MTH) (Mithril or the Company) is pleased to release details on the recently completed mining concepts study from its Copalquin Gold Silver District, Mexico.

Mithril CEO and Managing Director, John Skeet, commented:

personal	"The positive outcome of the conceptual mining study by AMC Consulting is an important step in the advancement
of our work in the Copalquin district. The study and the recently reported high metallurgical recoveries are positive
steps towards development in the district for production of gold and silver from high-grade resources. Exploration
	drilling, mapping and geochemical programs are in progress, and we look forward to reporting this work in the
	near future."
CONCEPTUAL EXPLORATION ACCESS - MINING DESIGN
For

AMC Consultants has completed a mining concepts design study for the El Refugio-La Soledad maiden JORC mineral resource estimate. The high-grade maiden MRE released 17 November 2021 is given below.

• 2,416,000 tonnes @ 4.80 g/t gold, 141 g/t silver for 373,000 oz gold plus 10,953,000 oz silver (Total 529,000 oz AuEq*) using a cut-off grade of 2.0 g/t AuEq*
• 28.6% of the resource tonnage is classified as indicated

DIRECTORS	MITHRIL RESOURCES LIMITED	REGISTERED OFFICE
John Skeet - Managing Director & CEO	ACN: 099 883 922	Level 4
Garry Thomas - Non Executive Director	ASX: MTH	100 Albert Road
Stephen Layton - Non Executive Director		South Melbourne VIC 3204
Claire Newstead-Sinclair - Company Secretary		T: [phone]
	www.mithrilresources.com.au	E: [e-mail]

			Tonnes	Tonnes	Gold	Silver	Gold	Gold	Silver	Gold
			(kt)	(kt)	(g/t)	(g/t)	Equiv.*	(koz)	(koz)	Equiv.*
							(g/t)			(koz)
only		El Refugio	Indicated	691	5.43	114.2	7.06	121	2,538	157
		Inferred	1,447	4.63	137.1	6.59	215	6,377	307
	La Soledad	Indicated	-	-	-	-	-	-	-
			Inferred	278	4.12	228.2	7.38	37	2,037	66
		Total	Indicated	691	5.43	114.2	7.06	121	2,538	157
			Inferred	1,725	4.55	151.7	6.72	252	8,414	372
			TOTAL	2,416	4.80	141	6.81	373	10,953	529
			Table 1- Mineral resource estimate El Refugio - La Soledad using a cut-off grade of 2.0 g/t AuEq*

*AuEq. = gold equivalent calculated using and gold:silver price ratio of 70:1. That is, 70 g/t silver = 1 g/t gold. The metal prices used to determine the 70:1 ratio are the cumulative average prices for 2021: gold USD1,798.34 and silver: USD25.32 (actual is 71:1) from kitco.com

useThe study considered open pit potential and various underground mining techniques. The positioning of the underground mine development was also assessed.

The study work shows that there is some open pit potential requiring further drilling work to better define near s rface high-grade material at El Cometa. The most likely scenario from the study indicates that the resource would be most effectively mined by underground methods.

For the underground mining, the preferred mining method recommended is mechanised Avoca bench (a variant personalof long hole open stope benching with rockfill) using a bottom-up extraction sequence as shown in the schematic

below. For

Figure 1 - Schematic of modified Avoca mining method

www.mithrilresources.com.au

Geotechnical

Some geotechnical logging of exploration holes has been undertaken and historical workings are present. AMC
notes that rock mass conditions indicate "good" to "very good" rock but can generally be categorised as "fair" until
recommended geotechnical assessment work has been undertaken. AMC has recommended geotechnical work,
only
which includes geotechnical logging of existing drill core on site, geotechnical diamond core drilling, structural
modelling and structure confirmation drilling (to coincide with resource infill drilling) to be completed prior to
further mining study work.
Preferred conceptual exploration access - mine design
The preferred conceptual exploration access - mine design was constructed, and sequence animated based on:
•	Twin mine area accesses from twin southern adits connected to a valley-to-valley exploration access
	developed in the footwall of the El Refugio orebody. A separate eastern adit exploration access is
	developed in the footwall of the Soledad orebodies with maximum access gradient reduced to 1:8,
•	Primary infrastructure developed off the exploration access, with primary infrastructure positioned within
	the footwall.
•	Mine access layout based on Avoca benching with rockfill.
use•	Mine design to avoid ventilation raises to surface, provide a cost-efficientflow-through primary
personalFor	ventilation circuit as soon as possible and provide emergency secondary egress as soon as possible
within the mine plan.

Figure 2 provides an isometric view of the mechanised Avoca bench with rockfill mine design.

Figure 2 - Isometric view of the conceptual mine plan for El Refugio-La Soledad

www.mithrilresources.com.au

For personal use only

Figure 3 - Plan view of the conceptual mine plan using the maiden MRE for El Refugio-La Soledad

Table 2 - Conceptual mine design inventory El Refugio - La Soledad using a cut-off

grade of 3.0 g/t AuEq*. The concept inventory is not a resource or a reserve.

Table 3 - Conceptual mine design development physicals

www.mithrilresources.com.au

Maximum re-use of development for other activities is assumed when a level is depleted. For example, stockpiles are used for mobile sub-station or mobile skid-mounted pumps or magazine or materials storage. The design makes notional allowances for miscellaneous infrastructure such as pump station sumps at the end of each decline leg and stripping of the backs above the raise bore machine position. At this time there is no allowance for additional development for underground drilling sites located off primary infrastructure routes.

onlyAMC Study Recommendations

If ongoing exploration drilling identifies significant additional near surface mineralisation adjacent to the current u derstanding of the El Refugio mineral resources, then Mithril should consider re-assessing the project for open pit mining potential.

The key recommendations for the next phase of data collection include:

use		• Assess where infill and extensional drilling is required to upgrade Inferred Mineral Resources and
	unclassified mineralisation.
	• Once target areas are identified, assess what can be achieved more cost effectively from an
	underground drilling platform, taking into consideration ease of access, timing, drilling accuracy and
	usage of hole wedging methods.
	• Undertake a geotechnical data collection programme which will be critical to better understand mine
		design parameters like potential stope and pillar sizes, development offsets to stoping voids, mine
		modifying factors (overbreak), open pit wall angles and the impact of these on the project economics.
AMC makes the following underground planning recommendations:
personal	• Undertake next-study-level geotechnical assessments to understand the geotechnical constraints to
	establish the largest practical unsupported spans to maximise extraction (less rib and sill pillars) and/or to
		improve development efficiency via taller level intervals. This requires careful balancing of the development
		efficiency against the plan dilution.
	• Critically assess inclusion of incremental stoping resources.
	• Obtain indicative contractor rates to conduct the conceptualised project works, confirm the processing cost
		and assumed site administration costs, to then confirm project viability accounting for capital estimates.
		There may be opportunities to rent the infrastructure, with the contractor to take on these items as part of
		their rates or to enter into other contracting agreements.
	• Identify local contractors with small profile equipment to ascertain the smallest on-lode sill development
		profile possible with trackless equipment, and based on this, re-assess the impact of on-lode sill
For		development dilution on the inventory head grade.
• Enquire about acquiring specialist narrow vein equipment.
•	If a suitable narrow vein development jumbo cannot be sourced, investigate the option to use traditional

handheld airleg miners for the on-lode sill drive development and then use mechanised production drilling for the stope production.

• Conduct next stage mine plan optimisation potentially using a combination of mining methods to address narrow versus wider lode areas, waste rock availability, delaying of capital development using a top-down extraction sequence in selected areas, etc.

• Conduct ventilation simulation analysis to e diesel dilution volumes and fan pressure requirements and required airway sizes to practically balance operating costs against capital costs.

www.mithrilresources.com.au