Toronto-based Arizona Metals (TSXV: AMC; US-OTC: AZMCF) has entered into an agreement with a syndicate of underwriters, led by Stifel GMP and Clarus Securities, to raise $15 million. The funds are expected to allow the Arizona-focused explorer to triple its Kay Mine phase 2 expansion drill program that is ongoing to 75,000 metres, from 25,000 metres.
The underwriters have agreed to purchase 7.15 million special warrants at $2.10 each, on a bought deal private placement basis with the option to purchase up to an additional 1.1 million warrants before 48 hours of the deal closing.
Each special warrant would allow the holder to receive one unit, made up of one share and half of a warrant. Closing is expected around Apr. 22.
“This financing will allow us to triple the planned drilling at the Kay Mine phase 2 expansion program from 25,000 metres to 75,000 metres,” Marc Pais, the company’s CEO, said in a release. “We can now accelerate the testing of numerous satellite targets on strike and to the west of the Kay Mine, previously identified using a combination of structural mapping, helicopter electromagnetic (VTEM) surveys, borehole electromagnetic surveys (BHEM), and soil and rock geochemical sampling.”
Pais added that a recent gravity survey has helped the company refine its drill targets and identified new untested prospects.
After adding a second rig to the site in February, Arizona Metals is now scheduling for two more drills and expects to provide the details of the larger program in an upcoming news release.
Kay Mine, in Yavapai County, lies in an established mining district with 60 past-producing operations within a 150-km radius. A historical reserve estimate for Kay defined 6.4 million tons grading 2.2% copper, 3.03% zinc, 55 grams silver per tonne and 2.81 grams gold per tonne at the volcanogenic massive sulphide deposit.
Dipping mineralization has been defined from a depth of 60 metres down to at least 900 metres and over 320 metres of strike; it remains open on strike and at depth.
Based on a November 2020 metallurgical review, Arizona Metals sees potential for Kay Mine to produce copper and zinc concentrates with gold and silver credits.
Notable intercepts from first-phase drilling, completed in August, include 43.1 metres of 3.94% copper-equivalent; 38.4 metres of 2.9% copper-equivalent; and 39.9 metres of 3.4% copper-equivalent.