Arizona Gold & Silver Inc. (AZS:TSX; AZASF:OTC) plans to drill 20,000 feet at its flagship Philadelphia gold-silver project in northwestern Arizona soon and could release a resource estimate by year-end, Vice President of Exploration Greg Hahn said in a March 16 interview.
"We have drilled 110 holes in this and don't know where the end of it is," Hahn told Chris Temple, editor/publisher of The National Investor.
Arizona Gold & Silver's drilling at Philadelphia to date has been 80%-plus successful in intersecting the gold-bearing system in most of the target area, Hahn, also a geologist, pointed out.
Busy Year of Drilling Ahead
The VP described how the company will approach the upcoming drilling and expressed optimism about the outcome.
Plans call, he said, for reverse circulation drilling on the shallower portions of the mineralized system and then core drilling on the deeper parts. First, though, Arizona Gold & Silver needs to raise funds to cover additional drilling, and thus is in the middle of a private placement to do so.
Once cashed up, the explorer will start infill drilling in the south end of the old underground workings, in the 500 meter (500m) area between the end of the shaft and where Arizona Gold & Silver already has drilled.
"We're pretty confident we're going to be able to continue that plus 80% success rate in drilling that area," commented Hahn.
Then, once the company receives the necessary permit from the U.S. Bureau of Land Management, expected next month, it will drill the Red Hills target also in the south.
Hahn described the geology at Red Hills as being slightly different than elsewhere on the property. There the mineralization primarily is spread out over a substantially large, 100m-thick area.
"We now have 121 claims covering a lot of that alteration that looks identical to what's sitting on top of our 100m intercepts," noted Hahn.
Elsewhere, the mineralization runs through three levels and has a different grade profile in each. In the top level grades are high, in the middle level grades are lower but still good and in the bottom level grades are low.
"We call it a sandwich," Hahn added. "In the middle of the sandwich is stockwork quartz."
Pursuing Even Better Metallurgy
Hahn also discussed metallurgy at Philadelphia. Initial testing showed that with milling, gold recovery rates were between 94% and 98%. These were consistent with historical results. Testing also revealed that the ore at the project is clean, free of deleterious metals including arsenic, antimony and mercury and free of copper and zinc, too.
Now, Arizona Gold & Silver is evaluating the possibility of heap leaching versus milling material at Philadelphia as the former process is more cost effective than the latter. Specifically, the company is conducting a heap leaching assessment over 100–120 days. As 30 of those days have passed, results will be available in about three months. This new testing compares to 18 days of heap-leach testing done historically, which resulted in 50–60% extraction rates.
"We're pretty confident we're going to be able to duplicate that and exceed it," Hahn said.
Optimally Located in Mining District
The geologist also talked about Philadelphia's location in Arizona, a state more associated with copper production than with gold and silver production. The project is in the Oatman mining district, which has produced more than 2,500,000 ounces of gold to date.
"We don't think it's anywhere close to seeing what the true potential of the district is," said Hahn, adding it remains underexplored for precious metals. "It's an exciting district."
Two currently producing gold projects in the Oatman are Northern Vertex's Moss open-pit, heap-leach operation and Aura Resources' Gold Road underground mine and agitation leach operation.
As for Arizona Gold & Silver's Philadelphia mine, it was in production from 1900 until just before the start of World War II, Hahn said. Records indicate the break-even cost then was about 0.25 ounce. Once the operators could no longer find 0.25-ounce material in the area they were mining, they shuttered the project.
Recommended as a Buy
Two mining experts view Arizona Gold & Silver favorably as an investment.
One is Temple, who said during his interview of Hahn, "Out of the universe of so many junior exploration stocks, there is one that made it to the top of my list, so much so that I quite a while ago recommended that our members of The National Investor take positions in it as I've done."
Temple pointed out that Arizona Gold & Silver has outperformed its peers in the last couple of years. He attributed this to Philadelphia's unique geology and the low number of shares the company has issued to date. He also likes that insiders have skin in the game.
"There are all kinds of small exploration companies out there. Some have got more promise than others," Temple said. "I think this is one that has got the potential to deliver something that you don't see every day."
Technical Analyst Clive Maund wrote in October 2023 that Arizona Gold & Silver was at a good entry point for investors. At the time it was trading at about CA$0.34 per share, and now it is trading a little lower.
"The price appears to be in the late stages of completing a double bottom with a very positive price:volume pattern," Maund wrote. "It's still at a very good price."
Further, Maund pointed out, the share price was readying to advance, as indicated by the stock's trading pattern over the previous six months.
Ownership and Share Structure
As for ownership of Arizona Gold & Silver, six individuals own 25.87%, or 18.57 million (18.57M) shares, according to Reuters. The three people with the greatest interest, from most to least, all linked closely to the company, are Adviser Brady Stiles with 13.96% or 10.02M shares, VP of Exploration and Director Greg Hahn with 6.23% or 4.47M shares and Chief Executive Officer, President and Director Mike Stark with 4.06% or 2.91M shares.
Institutional ownership totals 19.3% or 13.85M shares. The three institutions with a stake are SSI Wealth Management AG with 9.64% or 6.92M shares, SSI Asset Management AG with 9.64% or 6.92M shares and Moloney Securities Asset Management with 0.01% or 0.01M shares.
Retail investors hold the remaining 54.83%.
Arizona Gold & Silver has 71.76M shares outstanding and 53.19M free float traded shares.
The company's market cap is CA$16.96 million and its 52-week trading range is CA$0.27−0.59 per share.
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