Azimut Exploration: KGHM Funds Nickel Hunt & Weighs Gold Asset Options

• Azimut Exploration is a Quebec-based exploration company with a portfolio focused on gold, antimony, nickel, copper, and lithium
• President and CEO Jean-Marc Lulin has an extensive international geology background and is dedicated to making significant discoveries
• Azimut mitigates exploration risk by diversifying across commodities, selecting quality targets, and utilizing partnerships
• Key projects include Elmer (gold resource), Wabamisk (antimony-gold discovery), Kukamas (nickel-copper-PGE partnership with KGHM) and Galinée (Lithium)
• Azimut aims to create shareholder value through discoveries while minimizing share dilution and strategically monetizing assets

Azimut Exploration (TSXV: AZM) is an established Quebec-based exploration company with a multi-faceted strategy to create shareholder value through significant mineral discoveries. Under the leadership of geologist and President & CEO Jean-Marc Lulin, Azimut has built a diversified portfolio targeting gold, antimony, nickel, copper, PGEs, and lithium across the highly prospective Nunavik region of northern Quebec.

The company's approach centers on mitigating exploration risk by conducting systematic project generation to identify high-quality, underexplored targets and diversifying its commodity exposure. Azimut leverages both partnerships and self-funded exploration to advance projects, aiming to optimize chances for discovery while minimizing share dilution.

A Track Record of Exploration Success

Over its 38-year history, Azimut has established a track record of exploration success. The company has generated a robust project pipeline through its proprietary targeting methodology and has attracted major partners including KGHM, Newmont, and Hecla Mining.

A key tenet of Azimut's approach is mitigating the inherent risk in mineral exploration by maintaining a diversified project portfolio across commodities and using partnerships to fund work. As Lulin explains,

For us, the best way we have chosen is to look for different commodities to build a strong portfolio based on the recognition of good targets at the scale of Quebec and advance those targets the best way we can, either alone or through partnerships.

This strategy has allowed Azimut to make multiple discoveries and advance projects while averaging only 2.2 million shares issued per year over the past 38 years, one of the lowest dilution rates for a junior explorer.

Interview with CEO Jean-Marc Lulin

Generating Projects & Attracting Partners

All of Azimut's projects are generated in-house through systematic data processing to identify high-quality targets in Quebec. Once a project is acquired, Azimut may seek a partner to option it or advance it independently. To date, the company has signed 38 option agreements with 19 companies.

We generate all the projects which are in the Azimut portfolio, This is the product of the way we generate targets through systematic data processing at the scale of Quebec. This is one of the core expertises we have.

Elmer Gold Project

Azimut's flagship Elmer project hosts a significant near-surface gold resource of over 300,000 indicated ounces and over 500,000 inferred ounces at around 2.0 g/t Au. Lulin believes there is "great exploration potential" to further expand this resource and ultimately "monetize the discovery."

We still believe that Elmer is offering a great exploration potential and that we can increase the resource base. The key point is we need to drill much more at Elmer and this is a possibility for us at this point in time to attract a quality partner. The decision is not already taken, but it's a possibility.

Wabamisk Antimony-Gold Discovery

A new discovery that has Azimut particularly excited is Wabamisk, an antimony-gold system where a 5,000m drill program is underway. Lulin believes Wabamisk could emerge as a top priority for the company in future.

At current time we are progressing with the maiden program. What we foresee is to find a gold-rich zone deeper. At current time we're doing very shallow drilling, but classically for antimony-gold deposits you have better gold grade deeper and high-grade antimony at shallow depth.

Kukamas Nickel-Copper-PGE Joint Venture

Another key project is the Kukamas nickel-copper-PGE project, currently under option to Polish miner KGHM. Initial drilling in late 2024 returned promising nickel-copper-PGE-gold values from a style of mineralization called "Kambalda" common in Western Australia. KGHM can earn a 70% interest by delivering a preliminary economic assessment.

The project is fully funded by KGHM and they have the option to earn up to 70% by delivering a PEA. For us there is no downside. We try to deliver the best results through our exploration work and much more outstanding results will be delivered on that project.

Lithium Potential

In addition to its main metals of interest, Azimut sees potential in lithium after identifying a large target on the Wabamisk property last year. While Lulin acknowledges the market is not currently ascribing much value to lithium, he believes that could change.

We may deal with a true outstanding large-scale target at surface with, in our view, an outstanding open-pit potential and with a low cost. We may be in the position to delineate a significant resource.

Positioned for Discovery with a Strong Treasury

Azimut is well-funded to aggressively explore its key projects, with approximately C$11 million in working capital as of Q4 2024. Importantly, the company maintains one of the lowest share dilution rates among junior explorers, issuing just 2.2 million shares per year on average since inception.

We really control the share dilution rate. That way if we are making a discovery, the value of such discovery will be reflected in the share price.

With several active drill programs planned for 2025 and a strong financial position, Azimut is poised to deliver potential high-impact exploration catalysts in the near-term. Any major discovery success could be a game-changer for the company.

The Investment Thesis for Azimut Exploration:

• Proven track record of exploration success and ability to attract major partners
• Diversified, high-quality project portfolio in mining-friendly Quebec
• Potential for near-term discovery with several active drill programs in 2025
• Well-funded (C$11M in working capital) with one of the lowest share dilution rates in the industry
• Multiple options to create shareholder value - making discoveries, JVs, spinning out assets
• Downside risk mitigated by Elmer resource (over 800Koz Au total) and partner-funded exploration
• Attractive valuation with significant upside potential on discovery success
• Consider establishing a starter position ahead of upcoming 2025 exploration catalysts

Macro Thematic Analysis:

The global shift towards electrification and decarbonization is driving strong demand for key battery metals like nickel, copper, and lithium. Concerns around security of supply, especially from geopolitically stable mining jurisdictions, will likely maintain upward pressure on prices and incentivize new discoveries.

Quebec is ideally positioned to emerge as a major supplier of critical minerals for the green economy. The province boasts immense mineral potential, a mining-friendly policy regime, and proximity to major auto manufacturing hubs in North America. Companies that can successfully discover and develop new battery metal deposits in Quebec stand to benefit from this macro backdrop.

Beyond the green energy metals, ongoing economic uncertainty and geopolitical tensions should be supportive of gold prices in the medium-term. Azimut's gold-focused projects like Elmer and Wabamisk provide leverage to this macro thematic as well. As such, Azimut is well-positioned to capitalize on both the electrification and precious metal macro narratives in the years ahead.