Earn-In On The Afla Cu/Zn Project Consolidates The Palma VMS Belt

Alvo Minerals Limited (ASX: ALV) (“Alvo” or the “Company”) is pleased to announce the signing of a binding agreement to earn-in to the highly prospective Alfa Project (“Afla”), consolidating the broader Palma Volcanogenic Massive Sulphide (VMS) belt. The Afla Project is located adjacent to Alvo’s Palma Project and covers a strategic southern portion of the target host rocks of the VMS sequence.

HIGHLIGHTS

• Binding agreement to earn-in to the Afla Cu/Zn Project, consolidating the southern portion of the highly prospective Palma VMS belt
• The Afla Project was partially covered by a VTEM survey, and multiple conductors have been identified which appear similar to conductors that host significant VMS mineralisation at Palma
• The Brazilian Geological Survey (CPRM) conducted regional stream sediment sampling and soils sampling across the area highlighting several highly anomalous prospects
• Earn-in transaction has no upfront cash payments and will utilise Alvo’s existing exploration team to deliver the 1,000m of diamond drilling within 18 months of the agreement to earn the initial 60% of the project
• Ability to earn up to 100% of the project dependant on additional exploration and contract milestones

Alvo has the team, the tools and expertise to conduct a cost-effective exploration program across the Afla Project.

Rob Smakman, Alvo’s Managing Director commented on the Afla Project:

"We have secured the Afla Project due to its prospectivity and strategic location. It’s a significant area that increases our control over the VMS district, an enviable land package for a junior anywhere in the world and we are confident that integrating exploration at Afla with our existing CY2023 plans will be seamless. Field work on the ground will start immediately, focussed on the already identified targets. We will continue our systematic approach to prioritisation of the multiple greenfields targets to the point of being drill-ready.

“We have built an expert in-house team that is motivated and focussed on making new discoveries. We have leading edge in-house exploration tools available and continue to enhance our knowledge of the typical type and style of mineralisation in the district. We are really excited that we will be integrating the Afla Project into our exploration plans.”

Afla Cu/Zn Project

Alvo has signed a binding deal with AFLA INVESTIMENTOS E PARTICIPAÇÕES LTDA, (“Afla Investimentos”) a Brazilian company with interests in gold and limestone mining, agriculture, and real estate. The Afla Project includes 5 granted exploration licenses covering a total area of 9,758Ha (98km²), located adjacent to both Alvo’s Palma VMS Project and Alvo’s Ni/Cu/PGE Project at Cana Brava (see Figure 1). The Project is considered predominantly prospective for VMS style (Cu, Zn, Pb, Ag, Au) mineralisation.

Figure 1: Regional geology and tenement holdings for Alvo's Palma project area - Afla Project area in red hash.

Prior to Afla Investimentos taking control of the project in 2018, the area was explored by the Brazilian subsidiary of BHP (Colorado Exploration circa 1980’s), Glencore (early 2000’s) and Nexa in 2008. No historical data from these companies is currently available, however a recent due diligence field visit noted historical drill-core believed to be from when BHP was exploring the area.

Alvo is pursuing the historical information which may exist in the Mines Department, however there is no guarantee that this information will be available.

The Geological survey of Brazil (CPRM) completed a regional Stream Sediment survey which covered the Afla Project ground and indicated anomalous catchments of Cu, Zn and Pb. The CPRM also completed several soil sampling and mapping traverses also confirming anomalous Cu and Zn.

In 2008, Votorantim Exploration (now Nexa) flew a VTEM survey covering most of the Afla ground. This is the same survey that covers much of the Palma project and the source of multiple conductive targets currently being followed up by the Alvo exploration team. Alvo’s consultants have highlighted 5 individual conductors on the Afla ground that warrant follow up (see Figure 1).

The work by the CPRM and the VTEM survey is a great starting point for Alvo’s exploration strategy.

Integrating Afla into the Palma Regional Exploration Strategy

Alvo is undertaking an extensive regional exploration program across the Palma project which covers over 780km² (including the Afla Project increases this tenure to ~875 km²) of contiguous and highly prospective ground in a known VMS district. The district has been largely unexplored for over 30 years since the first discovery in the 1970s and presents an extraordinary opportunity to make new discoveries by applying modern and systematic exploration techniques.

VMS deposits typically occur in clusters, where multiple deposits are located in similar geological districts. These districts can host a number of VMS deposits that range in size from less than 1Mt to exceeding 100Mt.

Exploration work is underway across multiple prospects with the aim of advancing prospects to drill-ready status. Field activities including geological mapping, soil sampling, Auger drilling (“Auger”), Induced Polarisation Surveys (“IP”) and Fixed Loop electromagnetic surveys (“FLEM”) are underway. These activities are being undertaken concurrently within the district on various prospects identified by the Company from historical work completed to date.

Importantly, the Company’s key equipment purchases allow for flexible, fast and efficient exploration which is significantly less expensive than typical contracted exploration as the only material expense is labour and maintenance.

The Afla project areas have been integrated into the Palma project plan and exploration will proceed across the new areas according to the current schedule in place. Alvo expects that the time required to complete the earn- in is sufficient assuming the first pass exploration is successful.

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