Mithril Resources : Exploration & Metallurgy Results - Copalquin District Mexico

ASX ANNOUNCEMENT

18 January 2022

EXPLORATION & METALLURGY RESULTS - COPALQUIN DISTRICT, MEXICO

Highlights

only	• Exceptional metallurgical test work results for El Refugio resource composite with 94% gold &
88% silver recovered to concentrate using only flotation, confirming a simple process route
• AMC Consultants have commenced mining study work for the high-grade maiden resource1 area
investigating open pit and underground mining options
use	• High-grade rock chip samples from workings at Las Brujas, El Peru and Dios Hijos including:
o	49.0g/t gold, 665 g/t silver over 0.65m (Las Brujas)
	o 8.41g/t gold, 158 g/t silver over 0.30m (Las Brujas)
	o 7.93g/t gold, 366 g/t silver over 1.0m (Dios Hijos)
	o 10.4g/t gold, 422 g/t silver over 0.8m (Dios Hijos)
	• Additional drill hole highlights completed in December 2021, subsequent to the maiden mineral
personal	resource estimate
• Mineralisation extension confirmed a further 80 - 160m west of El Refugio
o	6.00m @ 0.84 g/t gold, 117 g/t silver from 177.2m (CDH-101, 160m west)
	o 1.08m @ 0.67 g/t gold, 34.0 g/t silver from 177.92m (CDH-102)
		1.00m @ 1.02 g/t gold, 69.0 g/t silver from 183m (CDH-102)
		2.00m @ 5.57 g/t gold, 162.5 g/t silver from 187.3m (CDH-102)
	o Continued mapping and sampling to develop this target area a further 900m west
	• Further shallow high-grade at El Cometa
	o 4.55m @ 8.29 g/t gold, 138 g/t silver from 28.0m, (CDH-099),including
		1.70m @ 20.2 g/t gold, 298 g/t silver from 28.0m
	• Drilling on eastern sided of El Refugio clavo. Deeper drilling required in this area.
	o 2.00m @ 1.02 g/t gold, 44.0 g/t silver from 353.75m (CDH-095),plus
		1.00m @ 0.72 g/t gold, 32.0 g/t silver from 376.55m, plus
		1.00m @ 4.29 g/t gold, 17.0 g/t silver from 376.55m
For	o 1.00m @ 4.47 g/t gold, 7.00 g/t silver from 327m (CDH-096),plus
	1.00m @ 0.65 g/t gold, 26.0 g/t silver from 342m, plus

1.00m	@ 1.00 g/t gold, 4.00 g/t silver from 366m, plus
1.00m	@ 0.77 g/t gold, 19.0 g/t silver from 370m, plus
2.00m	@ 1.33 g/t gold, 60.0 g/t silver from 374m

o 1.00m @ 1.18 g/t gold, 11.0 g/t silver from 288m (CDH-098),plus 0.50m @ 6.50 g/t gold, 95.0 g/t silver from 299.2m, plus 1.00m @ 3.61 g/t gold, 22.0 g/t silver from 377m

____________

1 Maiden JORC MRE 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*) @ cut-off grade of 2.0 g/t AuEq* - 17 Nov. 2021

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]

Figure 1 - Map view of the El Cometa/El Refugio drilling showing the drill hole traces and the drill results reported in this announcement.

Excellent district mapping and sampling results allow other known targets areas to be assessed and prioritised for drilling in 2022. Our current funded program of up to 3,500m will further drill test La Soledad, the strong gold in soil anomaly at Los Pinos and additional exploration drill holes up to 900m west of the El Refugio resource."

"Building on the excellent high-gradegold and silver maiden resource estimate, the high recoveries of gold and silver from the flotation tests again demonstrates the attractive project metrics for our Copalquin District in Mexico. As our study work progresses to optimise a future development at El Refugio, we continue our exploration efforts to expand the current resource with two drill holes (CDH-101&102) confirming mineralised extension 160m west.

Mithril Resources Ltd (ASX: MTH) (Mithril or the Company) is pleased to release further results from its Copalquin Gold Silver District, Mexico.

Mithril CEO and Managing Director, John Skeet, commented: onlyuse

personalForThe intercepts from the recent deeper drilling on the eastern side of El Refugio show that the vein system is more extensive below the Cometa high-grade area and additional step-out drilling from sections 400 east to section 40 is warranted.

The drill holes CDH-101 and CDH-102 have confirmed that mineralization extends at least 160 meters further west from the limit of the resource model and continues to be open along strike. As was the case with the El Refugio high- grade clavo, deeper drilling is required as we develop our geologic understanding of this western extension of El Refugio.

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use only
Figure 2 - The 70 km2	Copalquin District mining concession area with maiden resource area at El Refugio, drill expansion west and development of
personal	new drill targets at El Peru, Las Brujas and Dios Hijos following strong rock chip sample results.

MAIDEN RESOURCE ESTIMATE - SIMPLE METALLURGY

A metallurgical test work program following the maiden mineral resource estimate (MRE) is being conducted by SGS Laboratories. 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

		Tonnes	Tonnes	Gold	Silver	Gold	Gold	Silver	Gold
		(kt)	(kt)	(g/t)	(g/t)	Equiv.*	(koz)	(koz)	Equiv.*
						(g/t)			(koz)
For	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*

The sample used for the test work is a composite sample from El Refugio crushed drill core. The average grade of the composite is similar to the average grade from the maiden resource estimate. The calculated composite grade from the flotation test work is 4.52 g/t gold and 124 g/t silver.

*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

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Figure 4 - Flotation cumulative recovery curve for silver. Grind size 80% passing 75 microns.

Figure 3 - Flotation cumulative recovery curve for gold. Grind size 80% passing 75 microns.

Flotation test work has been completed using the same reagent scheme determined from the Palmarejo deposit (located in the Sierra Madre Trend and north of the Copalquin District) test work, due to the similarities in geology and mineralogy between Palmarejo and El Refugio at Copalquin.

onlyusepersonalForAdditionally, gravity concentration test work for gold and silver recovery was completed with 59% gold and 24% silver

recovered into a gravity concentrate.

Cyanide leaching test work is currently being conducted on the flotation concentrate and tailings and on the gravity concentrate and tailings. This will give final gold and silver extractions rates for a flotation/cyanide leach flowsheet and a gravity/cyanide leach flowsheet. Results to date indicate that final gold and silver recoveries will be 90-95% using simple and conventional processes greatly enhancing the development opportunity for this first resource area in the Copalquin District.

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ABOUT THE COPALQUIN GOLD SILVER PROJECT

The Copalquin mining district is located in Durango State, Mexico and covers an entire mining district of 70km2 containing several dozen historic gold and silver mines and workings, ten of which had notable production. The district onlyis within the Sierra Madre Gold Silver Trend which extends north-south along the western side of Mexico and hosts

many world-class gold and silver deposits.

Multiple mineralisation events, young intrusives thought to be system-driving heat sources, widespread alteration together with extensive surface vein exposures and dozens of historic mine workings, identify the Copalquin mining district as a major epithermal centre for Gold and Silver.

Mithril Resources is earning 100% interest in the Copalquin District mining concessions via a purchase option
agreement detailed in ASX announcement dated 25 November 2019.
personal use
For	Figure 5 - Copalquin District location map with locations of mining and exploration activity within the state of Durango.

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