Marg

The Marg Project is an undeveloped volcanogenic massive sulphide ("VMS") deposit located in the Mayo Mining District in Central Yukon, approximately 40 kilometres east of Keno City (which itself is approximately 465 kilometres by road north of Whitehorse). The Marg Project claims are located within the First Nation of the Nacho Nyak Dun ("FNNND") traditional territory.

In 2022 the Company will focus on an initial work program with the aim to enhance the value of the Marg Project, including:

• Advancing metallurgical and mineralogical work – The Company believes that more appropriate and extensive metallurgical and mineralogical test work could deliver improved economic outcomes. The issue of lack of relevant metallurgical and mineralogical test work presented itself in the historic August 2016 PEA with lower than typical recoveries assumed for similar mineralization styles (including very low assumed recoveries into concentrate for gold or silver).

• Analysis and interpretation of 2006 VTEM data (and surface geochemistry) – The Company's analysis and interpretation of the VTEM Airborne ElectroMagnetic ("AEM") surveys completed in 2006 over high-priority felsic volcanics have not yet been adequately followed up with detailed additional ground geophysical surveys, soil sampling, geological mapping and/or drilling.

• Modern soil surveys have also outlined a number of excellent, untested, semi-coincident Ag-Pb-Hg-Ba-Mn-Sb-Tl anomalies ("VMS signature") locally coincident with untested strong VTEM AEM anomalies lying within highly prospective felsic volcanics. As a consequence, there remains considerable exploration upside with the potential to significantly expand the known base and precious metal inventory on the property.

• Analysis of the geological setting of the Marg VMS deposit along with its coincident AEM geophysical and surface geochemical attributes suggest strong potential for additional VMS deposits to occur at regular intervals along strike, especially in an area referred to as the Jane Mineral Occurrence (Yukon Minfile_ID #13663 – located 7 kilometres along strike to the southwest of Marg – see Figure 1).

• Mineralized Envelope extension and exploration – Azarga Metals believes there is strong potential to materially add to mineralization at the project. Firstly, at Marg itself, deeper drilling is recommended to explore the down-plunge, relatively sparsely drill-tested continuation of two massive sulphide lenses that constitute the bulk of the known Marg mineral resource. Secondly, proposed drilling within three target boxes located immediately northwest of the Marg deposit will be focused on coincident exceptionally strong Ag-Tl-Pb-Cu-Ba in soil anomalies, VTEM AEM conductors and a prospective rhyolite - black shale contact (possibly representing an assumed fold-repeated Marg VMS Horizon with similar geological-geophysical-geochemical attributes), all located within a few hundreds of metres northwest of the historic Marg deposit.

• Initial meetings with the FNNND resulted in a mutual understanding to work together to develop a comprehensive engagement plan, based on Azarga Metals goals and objectives in the spirit of respect, transparency, and partnership. The plan will provide a framework for prioritizing business and training opportunities by Azarga Metals for FNNND individuals, groups and those entities owned by and/or affiliated to FNNND.

The most recent NI43-101 Mineral Resource estimate for Marg was completed by Mining Plus Canada Consulting Ltd. ("Mining Plus") in 2016 and incorporated into a Preliminary Economic Assessment ("PEA") for the project (note: the PEA title is "Revere Development Corp, Marg Project Preliminary Economic Assessment, Technical Report, Yukon Canada" and is dated 31 August 2016).

Table 1 – 31 August 2016 NI43-101 total Historic Mineral Resource estimate for Marg Project at a 0.5% copper equivalent cut-off (combining high-grade and low-grade zones)¹

Note: 1. Where CuEq% was calculated = Cu% + 0.28 Pb% + 0.32 Zn% + 0.39 Au g/t + 0.0055 Ag g/t, which was assessed based on the following metal price and recovery assumptions: Cu price of 2.5 US$/lb and recovery of 80% (96.5% payable); Pb price of 0.8 US$/lb and recovery of 70% (95% payable); Zn price of 0.8 US$/lb and recovery of 90% (85% payable); Au price of 1100 US$/oz and recovery of 50% (90% payable); and Ag price of 16 US$/oz and recovery of 50% (90% payable).

The mineral resource estimate in the 2016 PEA was prepared in accordance with NI 43-101 standards and is considered by Azarga management to have a high degree of reliability, however, the resource has not been verified by Azarga and is considered historical in nature. A qualified person representing Azarga has not done sufficient work to classify the historical estimate as a current mineral resource and Azarga is not treating it as a current mineral resource.

The Marg deposit was first identified in 1965 by strong regional stream sediment geochemical anomalies detected as part of a Geological Survey of Canada study. Since then, Marg has been developed into a sizeable VMS deposit. To this effect, the potential for discovering an analogous VMS deposit seems quite reasonable in the Jane Area (7 kilometres to the southwest) where somewhat similar surface geochemical anomalies (namely Ag in soil and/or stream sediment anomalies) are present within favourable host rocks.