Azco Provides Update of Its Activities.

Business Editors

GLENDALE, Ariz.--(BUSINESS WIRE)--Aug. 5, 2003

Azco Mining Inc. (OTCBB: AZMN), an industrial minerals company focused on the development of its wholly owned Black Canyon Mica Project, today provided the following update of its activities.

On July 24, 2003, Azco Mining Inc. ("the company") began trading on the OTCBB under the new symbol AZMN.OB after voluntarily de-listing its stock on the American Stock Exchange ("Amex"). Previously the company had received notification from the Amex that its stock had fallen below the Amex's continued listing requirements.

In June 2003, the company filled its first commercial order for its engineered mica-filled plastic pellet product. This order followed a program of testing and commercial trials that began in mid-2002 and was carried out jointly with the customer. The product is used in the automotive industry. Testing of the company's plastic pellet products for other applications also is being discussed with the same customer. The company has sufficient mica in inventory to be able to fill orders for the foreseeable future. However, its ability to fill such orders will depend on the company obtaining additional financing as described below.

Beginning in 2001, the company also has supplied its high-quality mica to the cosmetic industry, and recently received additional orders. Its ability to fill those orders also will depend on obtaining additional financing as described below.

Since acquiring the Black Canyon Mica Project in 1999, the company has established mining and processing facilities at the mine site north of Phoenix and in Glendale, Ariz., and has obtained the permits required to begin operations. These facilities are capable of operating but at a throughput rate less than full planned capacity. To date, the company has expended over $16 million on the Black Canyon Mica Project.

In 2002, the project operated for several months on a test basis and achieved limited production and commercial sales. This operation was successful in achieving two important objectives. First, it demonstrated the facilities are capable of producing the planned range of products. Second, it validated the high quality and market acceptability of the company's two main product lines, namely high-end wet-ground mica, targeted for high-value applications in the plastics and cosmetics industries, and feldspathic sand, to be sold into the growing Phoenix construction and recreational markets. The company sold all of the feldspathic sand it produced in 2002, and sold some of the mica while retaining a portion in inventory.

Operations were curtailed in November 2002, pending the availability of additional capital needed to upgrade and expand the mining and processing facilities and to provide working capital. These expansions are required in order to achieve the higher throughput necessary for sustained economic operation.

During 2003 the company has been exploring sources of financing that would provide the additional capital needed for plant expansion and for other corporate purposes. However, a commitment for the required financing has not been obtained to date. Although the company continues to be engaged in discussions with several groups who have expressed a potential interest in investing in the company or in a joint-venture arrangement in the Black Canyon Project, the timing, amount and terms of any such financing are uncertain.

As has been disclosed in the company's quarterly filings on Form 10Q and other filings with the Securities and Exchange Commission, the company is in need of funding and if the financing required is not obtained on a timely basis, there is significant doubt as to the company's ability to continue as a going concern.

In an effort to more accurately reflect the carrying value of its long-lived assets, the company reduced the carrying value of its long-lived assets by $3,291,773 in the quarter ended March 31, 2003. Should adequate financing on terms acceptable to the company not be arranged within the near future, it is likely that the company will need to, once again, reassess the carrying value of its long-lived assets for a possible additional write-down of these assets. There is no assurance that the company can obtain such financing.

The information contained herein regarding risks and uncertainties, which may differ materially from those set forth in these statements, in addition to the economic, competitive, governmental, technological and other factors, constitutes a "forward-looking statement" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, the Private Securities Litigation Reform Act of 1995 and is subject to the safe harbors created thereby. While the company believes that the assumptions underlying such forward-looking information are reasonable, any of the assumptions could prove inaccurate and, therefore, there can be no assurance that the forward-looking information will prove to be accurate. Accordingly, there may be differences between the actual results and the predicted results, and actual results may be materially higher or lower than those indicated in the forward-looking information contained herein. Further, the company assumes no obligation to update or otherwise publicly revise the forward-looking information disclosed herein to reflect circumstances existing after the date hereof.