Arizona Metals announces $25 million bought deal financing
Arizona Metals Corp. [AMC-TSXV] has announced details of a $25 million bought deal financing and said proceeds are earmarked for exploration at the company’s Kay Mine project and Sugarloaf Peak property. Both are located in Arizona.
The company said it has entered into an agreement with an underwriting syndicate which has agreed to purchase 14.7 million shares for $1.70 per share.
The underwriters have been granted an over-allotment option to purchase up to an additional 2.2 million common shares. That option can be exercised at any time on or prior to 30 days after the offering closes. If the option is fully exercised, gross proceeds of the offering would increase to $28.7 million.
On Tuesday, the shares eased 0.5% or $0.01 to $1.96 and trade in a 52-week range of $2.68 and $1.40.
Arizona Metals recently deferred a plan to seek shareholder approval for the creation and spin-off of two new companies to shareholders, one of which would own the company’s Sugarloaf Peak Gold Project. The other would have owned a newly-created net smelter return royalty on the company’s Kay Mine Volcanogenic Massive Sulphide (VMS) copper-gold project.
The move followed the appointment in May, 2024, of Duncan Middlemiss as President and CEO, and Jacques Perron as Chair of the Board. More recently the company said it is no longer planning to pursue to proposed spin-out.
The Kay Mine is Arizona Metals’ flagship asset. It is a VMS deposit located in an area where mining activity dates back before 1900. Previous operators include Exxon Minerals which held the property from 1972-74.
As reported by Exxon Minerals in 1982, the property contains a historic resource of 5.8 million tons, grading 2.8 g/t gold, 2.2% copper, 3.03% zinc, 55 g/t silver. The bulk of the historic estimate defined by Exxon lies at a depth of 150 metres to 450 metres.
In a press release on December 2, 2024, the company announced drill results from the Kay2 Zone, which is located approximately 100 metres north of the previously drilled mineralization at the Kay deposit.
The company said the new drilling results will likely be included in an upcoming mineral resource estimate, which is expected to be released in the first half of 2025. “Currently, we have two rigs testing this new extension with plans to drill 6,300 metres at Kay2 and Kay in the first quarter of 2025,” Middlemiss said.
Arizona’s Sugarloaf Peak Gold project is a near-surface open pit target located on 4,400 acres of BLM claims in La Paz County, Arizona, about 8.0 kilometres from the town of Quartzsite. It contains a historic resource of 1.5 million ounces grading 0.5 g/t gold to a depth of 70 metres.
The deposit is open for expansion in all directions and recent metallurgical testing has demonstrated the potential for excellent recoveries in both oxide and sulphide mineralization.