Arizona Gold & Silver (TSX-V:AZS) has closed a C$12 million ($12.23 million) strategic investment from Evolution Mining as it prepares to accelerate exploration at its Philadelphia Gold-Silver Project in Arizona, US.
Evolution Mining Gold Operations, a wholly owned subsidiary of Evolution Mining (ASX:EVN), acquired around 15 million units at C$0.80 per unit through a non-brokered private placement. The investment gives Evolution an approximate 9.9% equity interest in Arizona Gold on a non-diluted basis.
Each unit comprises one common share and half a warrant, with each full warrant exercisable at C$1.00 for three years from closing. If Evolution exercises all warrants, its ownership would increase to 14.1% on a partially diluted basis.
Arizona Gold & Silver has committed to deploy at least 90% of proceeds, approximately C$10.8 million, toward exploration at Philadelphia in Arizona’s Oatman mining district. The remaining C$1.2 million will fund general and administrative expenses.
President and CEO Mike Stark says the strategic investment marks an important milestone for the company.
“Evolution Mining is a $23-billion globally recognised gold producer with an outstanding technical reputation. Its investment reflects confidence in our team, our assets, and our long-term vision,” Stark says.
Located in Mohave County, the Philadelphia Project features an epithermal ‘high-grade’ gold and silver vein target along the Arabian Fault. Previous drilling returned 4.10 grams per tonne gold from 21.79m, while metallurgical testing of bulk samples yielded up to 99% gold recovery.
The companies have entered an investor rights agreement granting Evolution participation rights in future equity raises, top-up rights to maintain its interest, and the right to nominate one board member or appoint a board observer.
Under the terms, Evolution also receives advisory participation on a technical committee and first refusal rights over any sale of a 10% or greater interest in Philadelphia.
All securities issued carry a four-month-and-one-day statutory hold period, with the placement subject to final TSX Venture Exchange approval.
Arizona Gold & Silver is an explorer focused on uncovering precious metal resources in Arizona and Nevada.
Write to Paula Fabe at Mining.com.au
Images: Arizona Gold & Silver
