Azure Minerals Limited ABN 46 106 346 918 Level 1, 30 Richardson Street West Perth WA 6005 Tel: +61 8 9481 2555 Fax: +61 8 9485 1290 Email: tony@azureminerals.com.au www.azureminerals.com.au

ACTIVITies REPORT For the period ended 31 March 2008

Azure Minerals (ASX: AZS) is an explorer and developer of precious and base metals projects in Mexico. The Company is currently exploring in the richly mineralised Sierra Madre Occidental mineral province of northern Mexico and has recently expanded its activities to other mining districts in Mexico. Drilling has intersected very promising mineralisation in a variety of commodities including silver, zinc, lead, molybdenum, copper and gold. Azure’s project portfolio in Mexico is comprised of eight 100%-owned properties and 13 properties held in joint venture with TSX-V listed Geoinformatics Exploration Inc (TSX-V: GXL), where Azure has earned an initial 51% interest. The entire project portfolio now covers an impressive area of 186,200 hectares (1,862 km2). Azure aims to become an independent minerals producer in Mexico through exploration success and selective project acquisition. The Company has an ongoing program of regional exploration, target identification and tenement staking to acquire 100%-owned projects throughout Mexico. In addition, Azure is continuing to evaluate opportunities for the acquisition of advanced stage exploration and development projects through joint venture or outright purchase.

Quarterly Overview The Board of Azure Minerals (ASX: AZS, “Azure”) is pleased to announce their quarterly report for the quarter ended 31 March 2008. Highlights for the quarter include: Exploration • Inaugural drilling campaign at Los Chinos highly successful, with the discovery of

extensive zinc-rich polymetallic mineralisation with wide intercepts and high grades.

• Results from Los Chinos indicate a large mineralisation system with the potential to host significant deposits of polymetallic mineralisation.

• Surface geophysical surveys completed on two exploration properties.

• Review of Pozo de Nacho data confirms the potential to host a bulk tonnage molybdenum deposit. Further diamond drilling and an initial Mineral Resource estimation are expected to be completed by the 4th quarter of 2008.

Corporate • Completion of expenditure earn-in obligations on Geoinformatics joint venture

properties, with Azure now holding a 51% interest in all 13 projects.

• Successful $2 million capital raising, with half from a North American institutional investor.

Azure’s Executive Chairman, Mr Tony Rovira, said that the Company was particularly pleased to have now earned a full 51% interest in the 13 joint venture properties. “We have now confirmed our presence in Mexico by completing our earn-in requirements to this great portfolio of projects ahead of schedule. This demonstrates our commitment to a rapid pace of exploration in Mexico, as we quickly develop and advance our project portfolio,” said Mr Rovira. “Through the joint venture with Geoinformatics, we have developed an excellent portfolio of prospective properties which have progressed markedly since we began exploration. We expect that further drilling will lead to the first Mineral Resource for the portfolio at Pozo de Nacho, and we are also very excited by the potential of the mineralisation system we have discovered at Los Chinos. We look forward to continuing the development of the joint venture portfolio and its excellent exploration opportunities.” “The joint venture properties are complemented by our growing portfolio of 100% owned properties, acquired through our ongoing target identification and acquisition program,” continued Mr Rovira. “We are still on the hunt for outstanding projects, particularly those that are at an advanced stage. Mexico offers us a wealth of opportunities in this area.”

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Mexico Azure successfully completed the first ever drilling campaign at Los Chinos during the quarter, with excellent results. Extensive zinc-rich base and precious metal mineralisation has been intersected, with all holes drilled identifying mineralisation. Geophysical surveys were carried out on the Los Chinos and El Carnero properties utilising the NSAMT technique. NSAMT (Natural Source Audio-Frequency Magneto-Telluric) is a resistivity technique which can detect relatively weak conductors, in particular zones of sphalerite-rich sulphide mineralisation, to depths of up to 700 metres below surface. Data from the geophysical surveys is currently being modelled and interpreted. This interpretation in conjunction with detailed assessment of previous drilling results will provide initial drill targeting at El Carnero and the next generation of drill targets at Los Chinos. Meanwhile Azure plans to recommence drilling at Pozo de Nacho in the forthcoming quarter. Azure’s ongoing target evaluation and project acquisition program continued during the quarter, resulting in Azure staking two additional properties. San Eduardo, located in the north of Sonora, is a 231.5km2 property prospective for silver, lead, zinc and copper mineralisation. Las Viboras, located in the state of Coahuila in central Mexico, is a 135.8km2 property prospective for silver, lead and zinc mineralisation. Azure’s Mexican Projects

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Projects

Los Chinos (Joint Venture – Azure 51%) Zinc – Lead – Silver During the quarter, Azure completed a 12 hole diamond drilling program at Los Chinos, for 1,561m of drilling. In a very successful result, the program intersected extensive zinc-rich polymetallic mineralisation with wide intercepts and high grades (see Tables 1 and 2). All of the holes drilled were mineralised. Silver, lead, gold and copper credits are also present, occasionally in very high grades. Highlights from the drilling include: • LCH-DD-001 3m @ 1.5% lead, 355g/t silver & 2.4g/t gold from 2 metres

• LCH-DD-003 3m @ 4.2% zinc from 70 metres • LCH-DD-005 4m @ 2.2% zinc, 236g/t silver, 1.0% copper & 0.7g/t gold from 4m • LCH-DD-007 5m @ 5.6% zinc from 51 metres & 2 m @ 155g/t silver from 61 metres

within a broader zone of 20m @ 1.9% zinc from 47 metres

• LCH-DD-008 4m @ 7.1% zinc from 18 metres within a broader zone of 13m @ 2.7% zinc from 16 metres

• LCH-DD-009 14m @ 1.5% zinc from 8 metres within a broader zone of 62.5m @ 0.6% zinc from 5 metres

• LCH-DD-010 22m @ 1.4% zinc from 3 metres

within a broader zone of 41m @ 1.0% zinc from 3 metres This is the first ever drilling program at Los Chinos, and the excellent results have given Azure great confidence in the potential of the polymetallic system discovered. The multiple mineralised horizons present at the property indicate a large mineralisation system with the potential to host significant polymetallic sulphide deposits. Drilling tested several of the numerous gossan and breccia zones exposed in the north-western part of the Los Chinos property. These zones represent the near-surface weathered expression of polymetallic sulphide bodies, where mineralisation consisting of base metal sulphides has selectively replaced susceptible horizons within the volcano-sedimentary sequence. Due to the oxidation and remobilisation of base metals during the weathering process, the deeper intercepts contain higher grades of zinc and lead because of the presence of primary sulphides (sphalerite and galena). Data from the geophysical survey is currently being modelled and interpreted. Initial results have identified strong anomalies within the mineralised system. This interpretation in conjunction with detailed assessment of the diamond drilling results will provide the next generation of drill targets at Los Chinos.

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Pozo de Nacho (Joint Venture – Azure 51%) Molybdenum Previous drilling by Azure at Pozo de Nacho has discovered a substantial body of molybdenum mineralisation hosted by an intrusive porphyry and surrounding sediments. Work during the quarter focused on a review of previous exploration results to establish the work programs necessary to produce an initial Mineral Resource estimation, which is now planned to be completed by the 4th quarter of 2008. A third phase of drilling is expected to commence during the June quarter, and will target higher grade zones, along strike and depth extensions. To date molybdenum mineralisation has been intersected over an area of 600m x 250m and from surface to depths in excess of 300m. The mineralised zone remains open to north and west, and at depth, with most drill holes ending within mineralisation. The mineralisation is present as veins and coarse to fine disseminations of molybdenite hosted within strongly altered quartz porphyry and the surrounding sediments. Modest copper and silver grades occur throughout the mineralised system. La Providencia (100% Azure) Silver – Lead – Zinc Reconnaissance surface exploration by Azure at La Providencia returned high grades of zinc (up to 45.4%), lead, silver, copper and gold from rock chip and dump sampling within an area containing numerous historical mine workings. These old workings exploited high grade zones of base metal-rich, carbonate replacement style mineralisation manifested as breccias and veins. Azure completed a four hole diamond drilling program at La Providencia in late 2007 to test for mineralisation beneath and around the most significant of the historical mine workings. Zones of visually distinctive alteration were observed in the drill core, however assays received from the program showed only modest mineralisation, with no significant results to report. Given the success of the initial drilling at Los Chinos, and the more advanced work including the pending resource calculations at Pozo de Nacho, Azure has determined that La Providencia will remain a lower priority exploration property, whilst exploration results to date are further reviewed.

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Corporate Activity Azure holds 13 properties in Sonora in joint venture with Geoinformatics Exploration Inc (TSX-V: GXL). Following the completion of Los Chinos drilling campaign, Azure has met its earn-in expenditure obligation of $US4 million, and is entitled to a 51% interest in the 13 properties. Following the earn-in, Geoinformatics will now determine if it wishes to contribute to further exploration expenditure through the joint venture in order to maintain its interest. A decision by Geoinformatics is expected shortly. Azure also successfully raised $2 million during the quarter, to continue the Mexican exploration activities. Azure has continued to attract North American support, with $1 million of the raising committed by a North American institutional investor. The North American capital markets remain a key priority in providing long term support for the company’s growth objectives. Participation in Azure from this leading North American institutional investor is particularly pleasing, indicating their confidence in our programs and potential for success, and positions the Company well for further inroads in this market. The Company’s share registrar also changed during the quarter. The share register is now maintained by Computershare Investor Services, Level 2, 45 St Georges Terrace, Perth WA 6000. Shareholders can contact Computershare on 1300 557 010 with any share registry related queries.

-ENDS-

For further information, please contact: Tony Rovira Shane Murphy Executive Chairman Porter Novelli Azure Minerals +61 8 9386 1233 +61 8 9481 2555 +61 (0)420 945 291 or visit www.azureminerals.com.au

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TABLE 1: SIGNIFICANT DRILL INTERCEPTS – LOS CHINOS PROJECT

DRILL HOLE

FROM (m)

TO (m)

INTERVAL (m)

SILVER (g/t Ag)

ZINC (%)

LEAD (%)

COMMENTS

LCH-DD-001 0.0 11.0 11.0 126 0.37 0.60 Previously reported including 2.0 5.0 3.0 355 0.38 1.54 Incl: 3m @ 2.39g/t Au

LCH-DD-002 41.0 46.0 5.0 28 1.04 0.53 129.0 131.0 2.0 20 1.52 0.25

LCH-DD-003 13.0 34.0 21.0 26 0.62 0.32 Wide zone of anomalous zinc & lead

including 26.0 31.0 5.0 55 1.54 0.66 Incl: 5m @ 0.18g/t Au 70.0 73.0 3.0 14 4.23 0.38

LCH-DD-004 No Significant Intercepts LCH-DD-005 0.0 8.0 8.0 146 1.48 0.57 Incl: 8m @ 0.41g/t Au

including 4.0 8.0 4.0 236 2.17 0.77 Incl: 4m @ 1.00% Cu & 4m @ 0.69g/t Au

LCH-DD-006 0.0 78.0 78.0 NSV 0.24 NSV Wide zone of anomalous zinc

LCH-DD-007 47.0 67.0 20.0 37 1.94 0.61 including 51.0 56.0 5.0 18 5.61 0.99 “ 52.0 54.0 2.0 13 9.65 1.43 Incl: 1m @ 11.20% Zn “ 61.0 66.0 5.0 78 1.28 0.35 Incl: 2m @ 155g/t Ag

& 5m @ 0.23g/t Au 6.0 67.0 61.0 18 0.78 0.31 Wide zone of

anomalous zinc & lead LCH-DD-008 16.0 36.0 20.0 17 1.86 0.47

including 16.0 29.0 13.0 17 2.69 0.51 Incl: 13m @ 0.13g/t Au “ 18.0 22.0 4.0 17 7.13 0.66 Incl: 1m @ 14.15% Zn 0.0 64.0 64.0 8 0.74 0.21 Wide zone of

anomalous zinc & lead LCH-DD-009 8.0 22.0 14.0 23 1.53 1.16 Incl: 1m @ 5.80% Zn

& 1m @ 7.92% Pb 5.0 67.3 62.3 8 0.58 0.33 Wide zone of

anomalous zinc & lead LCH-DD-010 3.0 25.0 22.0 20 1.40 0.96

3.0 44.0 41.0 13 0.97 0.57 Wide zone of anomalous zinc & lead

LCH-DD-011 0.0 28.0 28.0 11 0.30 0.49 Wide zone of anomalous zinc & lead

LCH-DD-012 0.0 18.0 18.0 61 0.39 0.50 Incl: 18m @ 0.67g/t Au 55.0 59.0 4.0 52 0.26 1.52

Samples were all sawn half core. Sample preparation was undertaken by ALS-Chemex (Hermosillo) and analysed by ALS-Chemex (Vancouver) using 4 acid digest / ICP-AES (for silver and base metals) and fire assay / AAS (for gold) methods. All mineralised intervals are length-weighted and are reported as downhole lengths – true widths are not yet known. NSV = No Significant Value.

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TABLE 2: DRILL HOLE DETAILS – LOS CHINOS PROJECT Hole No North

(mN) East (mE)

RL (mASL)

Dip Azimuth Hole Length (m)

LCH-DD-001 3 293 972 548 539 742 -60o 150o 79.3 LCH-DD-002 3 293 927 548 485 743 -60o 150o 178.0 LCH-DD-003 3 293 979 548 450 752 -60o 150o 169.75 LCH-DD-004 3 294 220 548 780 745 -60o 120o 110.5 LCH-DD-005 3 294 065 548 660 770 -60o 060o 84.85 LCH-DD-006 3 293 927 548 794 745 -60o 140o 108.0 LCH-DD-007 3 293 923 548 702 736 -60o 135o 100.15 LCH-DD-008 3 294 310 548 569 751 -60o 340o 67.15 LCH-DD-009 3 294 329 546 980 737 -60o 330o 147.95 LCH-DD-010 3 294 323 547 111 757 -60o 360o 152.55 LCH-DD-011 3 293 990 548 795 761 -60o 150o 159.75 LCH-DD-012 3 293 960 548 681 760 -60o 135o 203.45

Information in these documents that relates to Exploration Results is based on information compiled by Mr Pat Manouge, who is a Member of The Australasian Institute of Mining and Metallurgy. Mr Manouge is a full-time employee of Azure Minerals Limited. Mr Manouge has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2004 Edition of the “Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves”. Mr Manouge consents to the inclusion in the documents of the matters based on his information in the form and context in which it appears.