Arizona Mining (AZ-T) March 21, '16 is pleased to announce it has entered into a term sheet with Osisko Gold Royalties (OR-T) for a 1% net smelter royalty on any lead/zinc/silver sulfide ores mined from its Hermosa Project for proceeds of $10.0 million. In addition, Osisko and certain of its insiders will subscribe for a total of 9.99 million units (each a "Unit") at a price of $0.56 per Unit, calculated using the five day volume weighted average share price, for gross proceeds of $5.59 million. Each Unit consists of one common share and one half of one common share purchase warrant. Each whole common share purchase warrant is convertible into one common share of the Company at a price of $0.75 for a period of 18 months from closing.
Proceeds from the financings when combined with the Company's recent private placement for $2.8 million will be primarily used for an aggressive drill campaign on the Taylor Deposit and for general working capital purposes. The royalty is subject to negotiation of a definitive agreement. Closing of the private placement is subject to regulatory approval.
Jim Gowans, Arizona Mining's President and CEO commented "the drilling to-date that comprises the current resource on the Taylor Deposit only tests a small portion of the prospective terrain as defined by geology, geophysics and historic drilling. This drill program will give us a much better idea of the size and grade potential of the deposit. We have two drills currently on-site and expect to add an additional three."
About Arizona Mining
Arizona Mining Inc. is a Canadian mineral exploration and development company focused on the exploration and development of its 80% owned Hermosa Project located in Santa Cruz County, Arizona. The Company has entered into a letter of intent to acquire the remaining 20% interest in the Hermosa Project, which is subject to shareholder approval. The Taylor Deposit, a lead-zinc-silver carbonate replacement deposit, has a resource of 39.4 million tonnes in the Inferred Mineral Resource category grading 11% zinc equivalent ("ZnEq") utilizing a 6% ZnEq cutoff grade calculated in accordance with NI 43-101 guidelines. The Taylor Deposit remains open to the north, west and south over land controlled by the Company and will be aggressively drilled to test the limits of the resource. The Company recently completed metallurgical test work on drill core from the Taylor Deposit that projects overall recoveries of 92.9% Pb; 85.5% Zn and 91% Ag using industry standard froth flotation processing technology. The Company's other project on the Hermosa property is the Central Deposit, a silver-manganese manto oxide development project that has a prefeasibility study completed in December 2013. |
