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BLM Greenlights New Drill Pads at Arizona Metals Corp.’s (TSX: AMC) (OTCQX: AZMCF) Kay Mine Project, Company Readies for 94,000 Meters of Drilling
November 23, 2022

BLM Greenlights New Drill Pads at Arizona Metals Corp.’s (TSX: AMC) (OTCQX: AZMCF) Kay Mine Project, Company Readies for 94,000 Meters of Drilling

  • Arizona is one of the most attractive mining jurisdictions in the world and hands down the biggest producer of copper in the U.S.
  • Arizona Metals’ flagship project, Kay Mine, is surrounded by 60 past producing underground VMS copper-gold-zinc-silver mines
  • 72,000 meters have been drilled to date in Phases 1 and 2 at Kay Mine, to prove historic resource estimates and with CDN$60 million in the bank, Arizona Metals is ready to complete Phase 2 and initiate Phase 3 drilling now that Bureau of Land Management (“BLM”) has approved drill pads

Arizona is the United States’ largest producer of copper without question, as the state was responsible for 71% of the country’s copper production in 2021. Looking ahead, there are clear signs that Arizona will continue to dominate a market expected to see increasing demand owing to the rise of electric vehicles. In its bid to add its name to Arizona’s rich mining history, Arizona Metals (TSX: AMC) (OTCQX: AZMCF) hit a big milestone at the end of October that paves the way for resources and reserves at its expansive project north of Phoenix.

Laden with copper, gold and other metals, Arizona is ranked 2nd out of 77 jurisdictions for investment attractiveness by the venerable Fraser Institute. It is not without reason that the state is a host to mines and projects owned by some of the most recognizable names in the mining business, such as Rio Tinto, Freeport, and Hudbay.

Arizona Metals has two projects, Kay Mine and Sugarloaf Peak, in prolific mining districts, both of which have substantial historic resources that the company is aiming to bring current and expand upon. Kay Mine is the flagship project in Yavapai County, covering 1,300 acres on a combination of patented and Bureau of Land Management (“BLM”) claims. The project is 100% owned by Arizona Metals, not subject to any royalties, and is surrounded by 60 past producing underground VMS (Volcanogenic Massive Sulphide) copper-gold-zinc-silver mines.

VMS deposits are known to be rich in metals and often found in clusters. Glencore’s Kidd Mine just north of Timmins, Ontario, Canada is the posterchild for the potential of VMS deposits. It has been producing for 56 years and has turned out over 9 million tonnes of zinc (“Zn”), 3.4 million tonnes of copper (“Cu”), and 12,000 tonnes of silver (“Ag”). It is the deepest base metal mine in the world, with mining activities ongoing at 9,600 feet (nearing 2 miles) below surface. Arizona Metals’ Kay Mine Deposit is unique in that it is a gold-rich VMS deposit; there are very few of these left in the world that are not currently in production or owned by major producers.

About an hour to the north of Kay Mine, Phelps Dodge’s United Verde Mine produced 30 million tonnes at 5% Cu from an open pit and 4 million tonnes at 10% Cu from underground mining. About an hour to the southeast of Kay, is Rio Tinto’s vaunted Resolution Mine that is estimated to produce up to 40 billion pounds of copper over 40 years when it comes online.

Kay Mine has an historic resource estimate* of 5.8 million tonnes at 2.8 grams per tonne (g/t) gold (“Au”), 2.2% Cu, 3.03% Zn, and 55 g/t Ag, according to work completed by Exxon Minerals in 1982.

In a Phase 1 drill program, Arizona Metals spent CDN$25 million drilling 72,000 meters across 2-1/2 years to better understand the Kay Mine deposit. The drilling returned a spate of positive data, including intercepts of 43.1m grading 3.94% CuEq (copper equivalent), including 15.2m of 6.7% CuEq, from a depth of 341m and 38.4m grading 2.9% CuEq, incl. 12.5m of 6.0% CuEq, from a depth of 385m. The Au-Zn Discovery Zone hit 93.3m grading 8.3 g/t AuEq (gold equivalent), including a sub-interval of 17.5m grading 29.6 g/t AuEq. About 200m below this, drilling intersected another copper-rich zone of 125.3 m at 3.2% CuEq. Grades and widths of this magnitude have typically only been encountered historically in world-class deposits and mines. All equivalent calculations are after assumed mining recoveries.

The exploration work has shown Kay Mine to be a steeply dipping VMS deposit defined from a depth of 60 meters to at least 900 meters. Mineralization remains open for expansion on strike and at depth.

Particularly compelling is the fact that drilling to date has only explored about 3% of the prospective mineral horizon. That is about to change, as Arizona Metals has now received permit approval from the Arizona BLM for two new drill pads, located approximately 1,200 meters west of the Kay Mine deposit.

Arizona Metals is fully funded with approximately CDN$60 million in cash at the end of the first half of the year as it continues its Phase 2 and initiates its Phase 3 drill programs that will continue to test high priority targets at Kay, as well as the 97% of the untested horizon. The company has earmarked CDN$27 million to drill 18,000 meters in the Phase 2 programs, followed by ~76,000 meters in a Phase 3 drilling program focusing on its Central and Western targets in the search for new discoveries within the vicinity of the known deposit.

Construction of the drill road for the Central target (located 500 meters west of the Kay Mine deposit) is complete. Road construction for the Western target will begin upon confirmation of BLM acceptance of the company’s posted bond by year end with drilling to commence in Q1 2023.

Since the company was listed in 2019, equity research analysts at the Bank of Montreal, Scotiabank, National Bank, Stifel, Clarus Securities, Beacon Securities and Agentis Capital have published reports on Arizona Metals with 12-month target prices ranging from CDN$$6.50 to $10.50 per share.

* The historic estimate at the Kay Mine was reported by Exxon Minerals in 1982. The historic estimate has not been verified as a current mineral resource. None of the key assumptions, parameters, and methods used to prepare the historic estimate were reported, and no resource categories were used. Significant data compilation, re- drilling and data verification may be required by a “qualified person” (as defined in National Instrument 43-101 – Standards of Disclosure for Mineral Projects) before the historic estimate can be verified and upgraded to be a current mineral resource. A qualified person has not done sufficient work to classify it as a current mineral resource, and Arizona Metals is not treating the historic estimate as a current mineral resource.

Full Disclosure: Arizona Metals Corp. is an Investor Brand Network marketing client.

For more information, visit the company’s website at www.ArizonaMetalsCorp.com.

NOTE TO INVESTORS: The latest news and updates relating to AZMCF are available in the company’s newsroom at https://ibn.fm/AZMCF

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