Arizona Mining (TSX:AZ) wishes to address an article published by The Global Mining Observer on Sunday, December 11, 2016 regarding the Company’s Hermosa Project in Santa Cruz County, Arizona, which the Company believes is misleading. The Company is issuing this statement to provide its shareholders and the market with accurate information.
|Arizona Mining (TSX:AZ) wishes to address an article published by The Global Mining Observer on Sunday, December 11, 2016 regarding the Company’s Hermosa Project in Santa Cruz County, Arizona, which the Company believes is misleading. The Company is issuing this statement to provide its shareholders and the market with accurate information.
First, the article appeared to infer that the Taylor deposit was a re-named version of the Central Deposit. There are, in fact, two distinct deposits at the Hermosa project − the Taylor zinc-lead-silver sulfide deposit and the Central deposit, which is a manganese-silver oxide deposit. The article implies these deposits are one and the same, which is incorrect.
The metallurgical testwork on the Taylor Deposit was conducted by Resource Development Inc. (RDi) and has returned excellent results to date which were initially published in a January 7, 2016 press release, subsequently on February 1, 2016 with the maiden resource calculation, and reiterated by RDi within the Technical Report released on November 29, 2016. These results concluded that the deposit could produce two concentrates: a lead concentrate which grades 75.1% lead, 804 grams per ton silver,1.1% zinc and contains 0.1% manganese, and a zinc concentrate which grades 56.3% zinc, 0.3% lead, 144 grams per ton silver and contains 1.3% manganese.
The Technical Report states: “The concentrates had no deleterious elements. These results indicate that the conventional process flowsheet and simple reagent suite will produce marketable grade lead-zinc concentrate.” It further concluded that “based on the encouraging results in the scoping study, the Company should proceed with pre-feasibility level testwork.” As a follow-on step and to further refine the metallurgical process, the Company will conduct further flotation work, particularly on cleaner flotation, in an effort to reduce the manganese in the zinc concentrate.
Second, as referred to above, the Technical Report noted that the zinc concentrate composite analysed contained 1.3% manganese, which is referred to in the Global Mining Observer article as making the deposit unworkable and/or unsaleable. As noted above, the Technical Report states that the Taylor Deposit will produce marketable grade lead-zinc concentrates. To quantify further, the penalties for a zinc concentrate containing 1.3% manganese are estimated to be $12 per dry metric tonne versus the zinc concentrate value of over $1,100 per dry metric tonne at a $1.00 per pound zinc price. This equates to approximately 1% of the concentrate value and is therefore immaterial.
Based on our experience to date with the consultants involved in the scoping study and the preliminary economic assessment, the Company has heard nothing to indicate that concentrates from the Taylor Deposit would not be saleable. To the contrary, given the high grade of the zinc concentrates, we expect they will be sought after.
Arizona Mining CEO Jim Gowans commented, “In all studies to date, everything has pointed to a very saleable, high grade zinc concentrate. Additional metallurgical testing is underway to further improve our results. In my previous experience, I encountered a similar situation involving concentrates with comparable levels of magnesium oxide which we were able to significantly reduce by simply installing froth washing on the final stage of the zinc cleaners. We will be looking into this methodology for our zinc concentrates produced from the Taylor deposit.”
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The metallurgical results in the November, 29, 2016 technical report have been undertaken by Deepak Malhotra of Resource Development Inc. (RDi). Mr. Malhotra is a qualified person as defined by National Instrument 43-101 (NI 43-101) and a registered member in good standing of the Association of Society of Mining, Metallurgy and Exploration Inc. (SME) (License # 2006420RM). Mr. Malhotra has worked as a Metallurgist/Mineral Economist for 43 years since graduating from the Colorado School of Mines.
About Arizona Mining
Arizona Mining Inc. is a Canadian mineral exploration and development company focused on the exploration and development of its 100% owned Hermosa Project located in Santa Cruz County, Arizona. The Taylor Deposit, a zinc-lead-silver carbonate replacement deposit, has a resource of 31.1 million tons in the Indicated Mineral Resource category grading 10.9% zinc equivalent (“ZnEq”) and 82.7 million tons in the Inferred Mineral Resource category grading 11.1% ZnEq both utilizing a 4% ZnEq cutoff grade calculated in accordance with NI 43-101 guidelines (refer to the Company’s news release dated October 31, 2016). 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’s other project on the Hermosa property is the Central Deposit, a silver-manganese manto oxide project.
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Cautionary Note Regarding Forward-Looking Information
Certain information contained in this press release constitutes forward-looking statements. All statements, other than statements of historical facts, are forward looking statements including statements with respect to the Company’s intentions for its Hermosa Project in Arizona, including, without limitation, performing additional drilling and metallurgical testwork on the Taylor Deposit. Forward-looking statements are often, but not always, identified by the use of words such as may, will, seek, anticipate, believe, plan, estimate, budget, schedule, forecast, project, expect, intend, or similar expressions.
The forward-looking statements are based on a number of assumptions which, while considered reasonable by Arizona Mining, are subject to risks and uncertainties. In addition to the assumptions herein, these assumptions include the assumptions described in Arizona Mining’s management’s discussion and analysis for the year ended December 31, 2015 (“MD&A”). Arizona Mining cautions readers that forward-looking statements involve and are subject to known and unknown risks, uncertainties and other factors which may cause actual results, performance or achievements to differ materially from those expressed in or implied by such forward-looking statements and forward-looking statements are not guarantees of future results, performance or achievement. These risks, uncertainties and factors include general business, economic, competitive, political, regulatory and social uncertainties; actual results of exploration activities and economic evaluations; fluctuations in currency exchange rates; changes in project parameters; changes in costs, including labour, infrastructure, operating and production costs; future prices of zinc, lead, silver and other minerals; variations of mineral grade or recovery rates; operating or technical difficulties in connection with exploration, development or mining activities, including the failure of plant, equipment or processes to operate as anticipated; delays in completion of exploration, development or construction activities; changes in government legislation and regulation; the ability to maintain and renew existing licenses and permits or obtain required licenses and permits in a timely manner; the ability to obtain financing on acceptable terms in a timely manner; contests over title to properties; employee relations and shortages of skilled personnel and contractors; the speculative nature of, and the risks involved in, the exploration, development and mining business; and the factors discussed in the section entitled “Risks and Uncertainties” in the MD&A.
Although Arizona Mining has attempted to identify important risks, uncertainties and other factors that could cause actual performance, achievements, actions, events, results or conditions to differ materially from those expressed in or implied by the forward-looking information, there may be other risks, uncertainties and other factors that cause performance, achievements, actions, events, results or conditions to differ from those anticipated, estimated or intended. Unless otherwise indicated, forward-looking statements contained herein are as of the date hereof and Arizona Mining disclaims any obligation to update any forward-looking statements, whether as a result of new information, future events or results or otherwise, except as required by applicable law.
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