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 Corporate Profile: Arizona Mining Inc
    Publisher: Kaiser Research Online
    Author: Copyright 2013 John A Kaiser

 

Arizona Mining Inc (AZ-T)

TSCRSSearchWeb SiteTreeForumSEDARQuoteIPV
Arizona Mining Inc is the successor to AZ Mining Inc as of Oct 28, 2015, which changed its name from Wildcat Silver Corp on June 5, 2015. Wildcat moved onto the TSXV from the CSE on Sept 3, 2008 after spinning out Ventana Gold Corp on a 1:1 basis on Dec 14, 2006 so that it could focus on its Hermosa project (formerly Hardshell) in Arizona near the Mexican border. A TSX listing was obtained July 19, 2011. In Dec 2013 Arizona Mining released a PFS for a 12,500 tpd open-pit mine targetting the oxidized Central zone (formerly Manto Oxide) of 54.2 million tonnes of 75.6 g/t silver and 1.79% zinc with minor manganese and copper credits that relied on base case prices of $23.50 silver and $0.92/lb zinc. After $40 million expenditure Hermosa-Central turned out sub-economic. In 2014 the junior drilled the skarn sulphide mineralization at the base of the pit and found a major northwest dipping carbonate replacement deposit which became the basis for a 10,000 tpd PEA in April 2017 which indicated an after-tax NPV of USD $1.26 billion at 8% discount rate with a 42% IRR at base case prices of $1.10/lb zinc, $1.00/lb lead and $20/oz silver. CapEx was USD $457 million and OpEx $48/. The PEA resource was M+I 60.8 million tons of 4.4% zinc, 4.35 lead and 1.7 opt silver. The current goal is to deliver a feasibility in H1 of 2018 and have devlopment permits in place by the end of 2018. The exploration focus in 2017 is to see if higher grade ore from the Trench vein system and the Taylor Deeps zone can be brought into the mining plan. Arizona Mining Inc is headed by chairman Richard Warke and CEO/President Jim Gowans appointed in 2015. COO Don Taylor is the driving force behind the new discovery.

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Arizona Mining Project Valuations
CompanyProjectCountryStageIPV $
MM

$100
UPV
$500

$2000
Target MetalsDeposit Style
Key Company Projects
Arizona Mining Inc (AZ-T)Hermosa-TaylorUnited StatesPermitting & Feasibility $2,137 Zinc Lead Silver CopperCarbonate Replacement
Peer Projects
Aquila Resources Inc (AQA-T)Back FortyUnited StatesPermitting & Feasibility $102 Zinc Gold Silver CopperVMS
Cdn Zinc Corp (CZN-T)Prairie CreekCanadaPermitting & Feasibility $38 Zinc Lead Copper SilverVein / Mississippi Valley
InZinc Mining Ltd (IZN-V)West DesertUnited StatesPrefeasibility $13 Zinc Copper Iron Indium Gold SilverSkarn
Karmin Exploration Inc (KAR-V)AripuanaBrazilPermitting & Feasibility $231 Zinc Lead Silver GoldVMS
Solitario Zinc Corp (SLR-T)Florida CanyonPeruPEA $104 Zinc Lead SilverMississippi Valley
Comparable Projects
Zincx Resources Corp (ZNX-V)AkieCanadaInfill & Metallurgy $80 Zinc Lead SilverSedex
Rathdowney Resources Ltd (RTH-V)OlzaPolandPEA $26 Zinc Lead SilverMississippi Valley
Zazu Metals Corp (ZAZ-V)LIKUnited StatesPrefeasibility $23 Zinc Lead SilverSedex
Success Stories
Hermosa-Central100% WIUnited States5-PEA
Hermosa 43-101 Economic Study (USD except where noted otherwise)
PFSDec 10, 2013
Hermosa
Mining ScenarioTRMining Costs
Mining Type:OP
Cost Currency:USD
Processing Type:

Capital Cost:$834,600,000
Operating Rate:12,500 tpd
Sustaining Cost:$0
Operating Days:365
Operating Cost:$39.49/t
Strip Rate:5.7
BC Cash Cost per Unit: USD$31.61/oz Ag
Mine Life:18 years
BC Cash Cost Net By-Products: USD$4.84/oz Ag
LOM Tonnage:54,119,000 t
BC All-In Cost Net By-Prod: USD$12.94/oz Ag
Est Startup:

Spot All-In Cost Net By-Prod: USD$21.74/oz Ag
Production Potential

Metal 1Metal 2Metal 3Metal 4
Metal:AgMnAuZn
Grade:75.58 g/t0.08 0.10 g/t1.79%
Recovery:79.0%28.0%90.0%0.1%
Annual Output:5,700,000 oz110,000,000 lb10,000 oz10,000,000 lb
LOM Output:103,000,000 oz1,980,000,000 lb180,000 oz180,000,000 lb
Base Case Price:$23.50/oz$1.19/lb$1,250/oz$0.92/lb
Spot Price:$15.38/oz$0.71/lb$1,214/oz$1.22/lb
Base Case NSR:$29.36/t$28.69/t$2.74/t$2.02/t
Spot NSR:$19.21/t$17.12/t$2.66/t$2.67/t
Base Case Valuation
Reported Valuation Currency:USD
Pre-Tax NPV:
Discount Rate:8%
After-Tax NPV:$611,000,000
Total Base Case NSR USD:$62.81/t
Pre-Tax IRR:
Total Spot NSR USD:$41.67/t
After-Tax IRR:21%
Annual Pre-Tax Cash Flow Base Case and Net CF/FDSH USD:$106,376,875$0.31Pre-Tax Payback:
Annual Pre-Tax Cash Flow Spot and Net CF/FDSH USD:$9,936,875$0.03After-Tax Payback:2.8 y
Enterprise Value CAD :$2,116,392,477$6.13/shShare Price:$6.19
Note:
Comparative Valuations using Life of Mine Averages
Discount Rate:0%5%10%15%
Base Case Pre-Tax NPV USD:$1,080,183,750$389,430,214$34,400,536($158,892,296)
Base Case Pre-Tax Net NPV/Sh USD:$3.13$1.13$0.10($0.46)
Premium BC PT NPV over EV:($1.55)($3.55)($4.57)($5.13)
Spot Pre-Tax NPV USD:($655,736,250)($684,230,511)($684,639,630)($672,788,843)
Spot Pre-Tax Net NPV/Sh:($1.90)($1.98)($1.98)($1.95)
Premium Spot PT NPV over EV USD:($6.57)($6.66)($6.66)($6.62)
The comparative NPV calculations assume constant annual cash flow based on the life of mine average annual payable production and CapEx spent in year one. The operating cost includes the LOM sustaining capital. Due to details such as ore scheduling these NPV figures may differ from those of the 43-101 economic study.
After-Tax Valuations using Spot By-Product Prices
Hermosa 43-101 Economic Study (USD except where noted otherwise)
PEAUNov 12, 2012
M3 Eng.Hermosa
Mining ScenarioTRMining Costs
Mining Type:OP
Cost Currency:USD
Processing Type:

Capital Cost:$627,000,000
Operating Rate:14,920 tpd
Sustaining Cost:$152,000,000
Operating Days:365
Operating Cost:$20.89/t
Strip Rate:2.8
BC Cash Cost per Unit: USD$14.40/oz Ag
Mine Life:16 years
BC Cash Cost Net By-Products: USD$11.24/oz Ag
LOM Tonnage:96,000,000 t
BC All-In Cost Net By-Prod: USD$17.44/oz Ag
Est Startup:

Spot All-In Cost Net By-Prod: USD$18.08/oz Ag
Production Potential

Metal 1Metal 2Metal 3Metal 4
Metal:AgAuCu
Grade:64.00 g/t0.08 g/t0.04%
Recovery:62.0%90.0%20.0%
Annual Output:7,900,000 oz14,375 oz861,937 lb
LOM Output:125,720,000 oz230,000 oz13,791,000 lb
Base Case Price:$28.75/oz$1,525/oz$3.50/lb
Spot Price:$15.38/oz$1,214/oz$2.83/lb
Base Case NSR:$41.71/t$4.03/t$0.55/t
Spot NSR:$22.31/t$3.21/t$0.45/t
Base Case Valuation
Reported Valuation Currency:USD
Pre-Tax NPV:
Discount Rate:5%
After-Tax NPV:$658,000,000
Total Base Case NSR USD:$46.29/t
Pre-Tax IRR:
Total Spot NSR USD:$25.96/t
After-Tax IRR:32%
Annual Pre-Tax Cash Flow Base Case and Net CF/FDSH USD:$138,300,893$0.37Pre-Tax Payback:
Annual Pre-Tax Cash Flow Spot and Net CF/FDSH USD:$27,635,520$0.05After-Tax Payback:1.7 y
Enterprise Value CAD :$2,116,392,477$6.13/shShare Price:$6.19
Note:
Comparative Valuations using Life of Mine Averages
Discount Rate:0%5%10%15%
Base Case Pre-Tax NPV USD:$1,433,814,280$732,299,421$346,091,505$121,661,535
Base Case Pre-Tax Net NPV/Sh USD:$4.15$2.12$1.00$0.35
Premium BC PT NPV over EV:($0.52)($2.55)($3.67)($4.32)
Spot Pre-Tax NPV USD:($336,831,685)($409,953,730)($441,011,798)($451,319,005)
Spot Pre-Tax Net NPV/Sh:($0.98)($1.19)($1.28)($1.31)
Premium Spot PT NPV over EV USD:($5.65)($5.86)($5.95)($5.98)
The comparative NPV calculations assume constant annual cash flow based on the life of mine average annual payable production and CapEx spent in year one. The operating cost includes the LOM sustaining capital. Due to details such as ore scheduling these NPV figures may differ from those of the 43-101 economic study.
After-Tax Valuations using Spot By-Product Prices
Hermosa 43-101 Economic Study (USD except where noted otherwise)
PEAOct 26, 2010
M3 Eng.Hermosa
Mining ScenarioTRMining Costs
Mining Type:UG+OP
Cost Currency:USD
Processing Type:leach, SXE
Capital Cost:$297,000,000
Operating Rate:3,630 tpd
Sustaining Cost:$56,000,000
Operating Days:365
Operating Cost:$73.05/t
Strip Rate:

BC Cash Cost per Unit: USD$23.85/oz Ag
Mine Life:17 years
BC Cash Cost Net By-Products: USD($14.50)/oz Ag
LOM Tonnage:23,800,000 t
BC All-In Cost Net By-Prod: USD($9.38)/oz Ag
Est Startup:

Spot All-In Cost Net By-Prod: USD($31.65)/oz Ag
Production Potential

Metal 1Metal 2Metal 3Metal 4
Metal:AgMnZnCu
Grade:99.54 g/t0.09 1.70%0.09%
Recovery:90.0%95.0%90.0%95.0%
Annual Output:4,058,824 oz253,399,318 lb48,250,588 lb2,551,405 lb
LOM Output:69,000,000 oz4,307,788,400 lb820,260,000 lb43,373,893 lb
Base Case Price:$16.78/oz$0.41/lb$0.91/lb$3.07/lb
Spot Price:$15.38/oz$0.71/lb$1.22/lb$2.83/lb
Base Case NSR:$51.40/t$78.41/t$33.14/t$5.91/t
Spot NSR:$47.11/t$135.79/t$44.43/t$5.45/t
Base Case Valuation
Reported Valuation Currency:USD
Pre-Tax NPV:
Discount Rate:8%
After-Tax NPV:$357,000,000
Total Base Case NSR USD:$168.87/t
Pre-Tax IRR:
Total Spot NSR USD:$232.78/t
After-Tax IRR:19%
Annual Pre-Tax Cash Flow Base Case and Net CF/FDSH USD:$126,954,038$0.36Pre-Tax Payback:
Annual Pre-Tax Cash Flow Spot and Net CF/FDSH USD:$211,636,825$0.60After-Tax Payback:4.9 y
Enterprise Value CAD :$2,116,392,477$6.13/shShare Price:$6.19
Note:
Comparative Valuations using Life of Mine Averages
Discount Rate:0%5%10%15%
Base Case Pre-Tax NPV USD:$1,805,218,647$1,044,904,890$631,767,858$391,992,537
Base Case Pre-Tax Net NPV/Sh USD:$5.23$3.03$1.83$1.14
Premium BC PT NPV over EV:$0.55($1.65)($2.84)($3.54)
Spot Pre-Tax NPV USD:$3,244,826,023$1,954,161,413$1,249,301,939$837,288,559
Spot Pre-Tax Net NPV/Sh:$9.40$5.66$3.62$2.43
Premium Spot PT NPV over EV USD:$4.72$0.99($1.06)($2.25)
The comparative NPV calculations assume constant annual cash flow based on the life of mine average annual payable production and CapEx spent in year one. The operating cost includes the LOM sustaining capital. Due to details such as ore scheduling these NPV figures may differ from those of the 43-101 economic study.
After-Tax Valuations using Spot By-Product Prices

 
 

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