Arizona Gold & Silver Jump Starts Philadelphia Exploration After Evolution Mining Takes A C$12 Million Stake

Trevor Hall (0:16)

Arizona Gold & Silver is advancing the Philadelphia Project in Arizona's Oatman Mining District, a region with roughly 2.5 million ounces of historic gold production.

Drailing along Philadelphia's 3-kilometer gold-silver system has returned wide high-grade intercepts, including a core running at 19.37 grams per ton gold over 4.33 meters. The company also holds earlier stage projects in Nevada and Arizona. Last month, Arizona Gold & Silver announced an investment by Evolution Mining, a senior Australian gold producer. Evolution took a strategic stake in Arizona, paying $12 million for a 9.9% stake. Mike Stark is CEO of Arizona Gold & Silver. Mike, welcome to Mining Stock Daily.

Mike Stark (1:03)

Thank you, Michael. And thank you on a weekend as well. Thank you very much.

Trevor Hall (1:07)

Thank you for making time.

Now, Philadelphia is your flagship project. Mike, you announced a number of high-grade intercepts. Currently you're drilling to test whether that grade and thickness continues further down dip than a long strike. What have you found so far, Mike?

Mike Stark (1:23)

We're really pleased with what we're seeing, Michael, and it's only going to get better because we've now increased the amount of drilling time. We've gone to a 24-hour shift on this particular area, and it hasn't let us down.

We're waiting for results, as you can well imagine, but no, couldn't be happier right now. This drill bit seems to continue to find grade that we're very pleased about.

Trevor Hall (1:48)

Talk about grade and continuity that you're seeing along this. You did have a February announcement just talking about seeing some structural complexities.

Mike Stark (2:00)

Yes, we've got now under current known is 1.5 km of continuous strike. We are looking to do the remainder of 1.5 km with this new BOM permit, which will extend it to over 3 km in continuous mineralization along strike. And that's called the Arabian Fault, by the way.

Trevor Hall (2:25)

How many drills have you got turning there right now?

Mike Stark (2:27)

We have one. We just advanced that to 24-hour drilling, and we're in current negotiations for a second rig. That will be an announcement, I hope, in the coming weeks that we can announce to our shareholders. But at this point, instead of just reporting one hole at a time, we'll be able to do multiple holes at a time with the expediency of 24-hour drilling.

Trevor Hall (2:49)

Looking ahead right now, how much more drilling are you going to be doing, and what type of drilling are you going to be doing?

Mike Stark (2:55)

We're strictly core now, Michael. Look, it's something that we've had a lot of discussion over. The fact is, the people that have the interest in the company, only want to see core, and I understand that. Core is the Bible. It's the truth. When you start dealing with RC, there's so many parameters. It's a great exploration tool. We're beyond exploration. Now we're going to make this defined. The people that are looking are very pleased with not only what we see, but what the core is showing them. There seems to be, and we've used this term many times, a long ways to go on this vein. This is a vein on the Red Hills, by the way, called the Perry vein. There's a long ways to go. The textures that we're seeing are still not what both Greg and Lex want to see.

They want to see deeper down.

I'm always using the phrase carefully because you never know until you drill it. Could potentially be deeper into the boiling zone where the rich environment lives.

Trevor Hall (3:57)

Geology, can you explain a bit more about the boiling zone, Mike?

Mike Stark (4:01)

Not being a geologist, but I'll make it in simple terms. The boiling zone is something where all the gold is actually, sorry, not comes to the surface, is found.

In the history books, the Oatman District, the Oatman mine came down to a level where they intersected a very large rich area, which happened to be 1.1 ounces, 26 feet thick. That would be called the mineralization heart, and we have yet to see that in the textures that we have found so far. And we're only down 1400 feet, vertical feet, that is, at this point. There's been several comments that this vein looks like we could be going to 28, maybe more, 2800 feet. With the textures they're seeing right now, it is nowhere near the bottom.

Trevor Hall (4:52)

Let's turn to your funding. In late August, you announced a 12 million strategic investment by Evolution Mining, which took that 9.9 percent stake in your company.

Per the terms, Evolution gets a board seat observer, be on the technical committee. It has a refusal on sale at 20 percent or greater on Philadelphia. Where is the deal going right now with Evolution?