Arizona Mining Releases Robust PEA: 42% After-Tax IRR, 1.7 Year Payback

Arizona Mining ( TSX:AZ) is pleased to announce results from its Preliminary Economic Assessment (“PEA”) and a mineral resource update for its Taylor zinc-lead-silver sulfide deposit located on the 100%-owned Hermosa Project in Arizona. Based on current projections, the Company is targeting first production from a proposed 10,000 ton per day (“tpd”) operation in 2020.
Highlights (in US$)1
 Substantial NPV 8% of $1.26 billion
 Robust after-tax IRR of 42%
 Initial capex of $457 million
 Short 1.7 year payback
 Total operating costs of $48/ton
 19 year mine life based on conservative 60.8 million tons of ore production
“We are extremely pleased by the robust economics shown in the PEA for the Taylor deposit,” said Jim Gowans, President and CEO. “In addition, the resource has been significantly upgraded and has tremendous potential to expand further, recoveries have improved, and we continue to see keen, ongoing interest in our future concentrate from smelters and other potential offtake groups.”
Mr. Gowans added: “The project has been approved to progress to the feasibility stage and we expect to complete this work, initiate state permitting for operations on our patented land and break ground on the tailings facility by the end of 2017. Our permitting efforts are underpinned by strong existing local and state support built on early and extensive engagement.“
“With relatively low capex and a very robust IRR, our goal will be to fund the project with little to no equity. In light of the project’s strong cash flow, we should be able to attract significant conventional debt ($250-$300 million), offtake financing ($75-$150 million) and a silver stream ($200-$350 million). We will minimize equity dilution wherever we can to benefit all shareholders.” “With first production now expected in 2020, Arizona Mining represents one of the best quality growth stories in the mining sector with exceptional leverage to strong zinc prices.”
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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, USA including, without limitation, future drilling and other work on the Taylor Deposit. The Company would also like to caution the reader that the preliminary economic assessment (“PEA”) on the Company’s Taylor Deposit that supports the technical feasibility or economic viability of the Taylor Deposit, including the marketability of the concentrate, mining methods, costs, recoveries and any other technical aspects related to the Taylor Deposit, is preliminary in nature and there is no certainty that the PEA will be realized. 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, 2016 (“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. About Reserves and Resources This press release uses the terms measured, indicated and inferred resources as a relative measure of the level of confidence in the resource estimate. Readers are cautioned that: (a) mineral resources are not economic mineral reserves; (b) the economic viability of resources that are not mineral reserves has not been demonstrated; and (c) it should not be assumed that further work on the stated resources will lead to mineral reserves that can be mined economically. In addition, inferred resources are considered too geologically speculative to have any economic considerations applied to them. It cannot be assumed that all or any part of an inferred mineral resource will ever be upgraded to a higher category. Under Canadian rules, estimates of inferred mineral resources may not form the basis of feasibility or pre-feasibility studies or economic studies except for certain preliminary economic assessments.

Source: www.marketwired.com