GSA-Silver January 2018Arizona Mining: 01/16/18 Released updated Prelim Econ Assessment (PEA) for Taylor. Outstanding worldclass economics of after-tax NPV of $2.0 bil which is 57% higher than previous estimate, after-tax 48% IRR, a very
short 1.6 yr payback period and an over 36 year mine life. Co was able to enhance economics by including closer to
surface, high grade, Taylor Deeps Extension to increase prod in the first 5 yrs.
Note: Despite all the earlier worrying by some analysts, the 250 page PEA document mentions Manganese
ZERO times. Most concentrates from other mines contain some Mn, and are still economic. Arizona Mining has
smelters lined up to take their concentrate with initial agreements signed.
The real kicker in this story is that AZ ran the PEA using $1.00/lb Zn. Zinc has been moving higher and now
trades at $1.56/lb. Using current $1.56/lb price, the NAV jumps to ~$4.0 bil and IRR to ~100%. Most takeovers
take place at ~1X NAV. Arizona Mining trades for only $1.0 bil, and is still significantly undervalued vs the
$4.0 bil NAV. Hold on to your shares. While it trades at an all-time high, there’s plenty more upside.
Later on 01/10/18, Co received the Aquifer Protection, Pollutant Discharge and Dam Safety permits from State of
Arizona. Still needs the Air Quality permit, but that’s not required until ramp construction begins in order to reach
the near-surfaced ore, as well as the actual mining permits. These recent permits allow construction of the lined tailings
facility and water treatment plant. Co plans to amend permits for any changes seen by the Feasibility Study due
to be released mid-18.
The permits issuing is great news for Arizona Mining as it puts environmental uncertainty in rear view mirror. Co
plans to construct 10K t/d Mill on state land for a 10 yr LOM. When in prod will begin to apply for onerous Federal
permits (will take 3+ yrs for approval) to operate on US Gov land to extend mine’s life to 30+ years.