Arizona Gold & Silver Inc (TSX-V:AZS, OTCQB:AZASF, FRA:A9J0) has landed a C$12 million investment from gold major Evolution Mining, which is taking a near-10% stake in the junior to help fund a major drilling push at its Philadelphia Gold-Silver Project in Arizona.
Under the deal, announced Tuesday, Evolution Mining Gold Operations Ltd, a subsidiary of Evolution Mining Limited, will acquire just over 15 million units of Arizona Gold & Silver in a non-brokered strategic private placement at C$0.80 per unit.
Each unit consists of one common share and one-half of one common share purchase warrant, with each whole warrant entitling Evolution to acquire one common share at C$1 for three years from closing. Evolution is expected to hold an approximate 9.9% equity interest in Arizona Gold & Silver on a non-diluted basis following completion of the investment.
“This strategic investment marks an important milestone for Arizona Gold & Silver,” said Mike Stark, Arizona Gold & Silver’s CEO.
“Evolution Mining is a C$23 billion globally recognized gold producer with an outstanding technical reputation. Its investment reflects confidence in our team, our assets and our long-term vision.”
The company said it plans to use at least 90% of the gross proceeds, approximately C$10.8 million, to accelerate exploration at Philadelphia, with up to 10%, approximately C$1.2 million, allocated to general and administrative expenses. Priority exploration objectives include expanding the Perry Zone, testing the three-kilometer Arabian Fault corridor, evaluating potential beneath Red Hills and advancing the Eastern and Northeastern hyperspectral anomalies.
“Philadelphia is much more than a single-zone opportunity,” said Dr Lex Lambeck, Arizona’s senior vice president of exploration. “We see a large mineralized system with multiple opportunities for discovery. Our goal is to apply district-scale geological thinking, advanced exploration technologies and disciplined drilling to systematically unlock that potential.”
Upon closing, the company and Evolution will enter into an investor rights agreement under which Evolution will have the right to participate in future equity issuances to maintain its pro rata interest, top-up rights in connection with dilutive events, the right to nominate one board member or appoint a board observer, the right to participate in an advisory technical committee, and a first right of refusal over the sale of a 10% or greater interest in the Philadelphia project.