New Drilling Expands Gold-Silver Targets in Tombstone District

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Aztec Minerals Corp. (AZT:TSX.V;  AZZTF:OTCQB) has commenced reverse circulation (RC) drilling at its Tombstone project. Located in the historic Tombstone gold-silver mining district in Cochise County, Arizona, the drilling program aims to expand known shallow zones of gold and silver mineralization. It’s aim is to target areas previously identified as prospective during past exploration.

The initial phase of this program will extend the mineralized footprint identified between 2020-2023 at the Contention Pit and move toward the Westside area. Focused on discovering high-grade silver-gold mineralization by testing multiple mineralized structures, the program includes historic production zones such as the Westside anticline and Sulphuret dike.

Aztec’s management views the Tombstone project as a significant opportunity to uncover further mesothermal and carbonate-replacement deposit (CRD) mineralization. Such discoveries could potentially enhance the company’s prospects within this historic district.

All Things Gold and Silver

As 321 Gold wrote on September 17, "Gold is in a sweet spot where gamblers can buy, and investors who buy only weakness should simply enjoy their core positions ride." This positive outlook is reinforced by the belief that upcoming rate cuts could lead to a significant drop in real interest rates, potentially pushing gold prices to new highs, even reaching US$4,000 or US$5,000 per ounce in extreme scenarios. The article also pointed out that analysts at Goldman Sachs forecast a rise in ETF buying, which would further support the upward trajectory of gold prices.

In a Kitco report published on September 26, "Gold is making new highs," with gold futures approaching an upside target of US$2,730. This rally in gold prices highlights the potential for precious metal explorers to capitalize on increasing demand, especially as the sector remains a key area for growth and investment.

Then, on September 25, the AP wrote, "Analysts have bullish outlooks on the price of gold for the months ahead," with expectations of continued gains driven by economic uncertainty and geopolitical tensions. Central bank demand for gold remains strong, with Joe Cavatoni of the World Gold Council noting that this demand is "well above the five-year average" due to concerns over inflation and economic stability.

In addition to gold, Aztec's silver exploration aligns with recent market trends. As written by Stockhead on September 13, "Gold has reached a new high of US$2,568/oz," fueled by factors such as lower interest rates and strong investor demand.

Catalysts of Aztec

Aztec’s latest RC drilling campaign at the Tombstone project highlights their strategic plan to advance its gold-silver discovery in Arizona. According to the company's investor presentation, the step-out drilling around the Contention Pit intends to expand shallow, bulk-tonnage oxide gold-silver mineralization horizontally and down-dip. The investor presentation emphasizes the project's potential. In it, they note high-grade intercepts from previous drill programs, including 3,477 g/t silver over 1.52 meters (2023), which reflect the scale of mineralization in the district (#2).

Further exploration in the Westside area, guided by recent geological research and surface exploration, could also uncover deeper CRD-style mineralization. This would offer another avenue for significant resource expansion and follows a broader plan to test Taylor-type lead-zinc-silver targets, The goal is to leverage the favorable geological conditions identified in the Tombstone district.

Analysts Analyze Aztec

In July 2024, Timothy Lee, mining analyst at Red Cloud Securities, reiterated a BUY rating with a target price of CA$0.60 for Aztec Minerals, marking a potential 287% increase from its last close. Lee highlighted the success of Aztec’s channel sampling at the Tombstone project, noting that all trenches encountered gold and silver mineralization, with significant results such as 1.97 g/t gold and 120.4 g/t silver (3.47 g/t AuEq) over 60 meters along the western wall of the Contention pit. Lee concluded that these results "suggest potential for expanding the mineralized footprint down dip, along strike and toward the west of the historical pit," underscoring the promising nature of the project and the likelihood of further resource expansion .

Clive Maund, technical analyst, also maintained a bullish stance on Aztec Minerals in his June 2024 analysis. Maund rated the company as a Strong Buy, emphasizing the "potential for a big discovery" at its properties. He pointed to the significant progress Aztec had made with its exploration programs and noted that the stock had reached a favorable price zone for investors. Maund remarked that the Tombstone project had "exceptionally positive" prospects, further supporting his view that Aztec’s stock was primed for a sustainable advance .

Ownership and Share Structure

According to Reuters, Aztec Minerals has 108.95 million shares outstanding and 86.4M free float traded shares.

5.50% is with management and insiders. In this category, large shareholders include President and CEO Simon Dyakowski with 2.22%, and director Jim Schilling at 1.42%. 15.19% is with strategic investors. Notable holders are Alamos Gold Inc with 8.22%, Kootenay Silver Inc with 6.98% The rest is in retail.