Article from the Prospector.com
By Marc Challande
ARIZONA SILVER CORP
EXPLORES NEVADA AND ARIZONA
rizona Silver Corp (TSXV:
AZS; OTCQB: AZASF) is a
junior mining exploration
company primarily involved
in Western United States. The
company owns four projects
(100% ownership), all located in the
mining-friendly jurisdictions of Nevada
and Arizona
COMPANY OVERVIEW
The company’s projects are situated in
Nevada and Arizona, the world’s top 2
mining jurisdictions. These states offer
excellent safety for Arizona Silver as
they have strong mining jurisdictions
and no geopolitical conflicts. Moreover,
Nevada is the 2nd largest gold reserve in
the world, and over 20 mines annually
produce over 5M ounces of Gold.
PHILADELPHIA PROPERTY
The Philadelphia property comprises
30 claims, is a 100% controlled
property, and is a historic high-grade
producer. Initially discovered in the
1890s, the property was mined up
to the early 1930s. The Philadelphia
property is one of the few gold systems
remaining in Western USA that has
never been evaluated using modern
exploration concepts. The property
was first initiated through a lease of 11
unpatented claims in February 2019. In
January 2020, the company paid $20k
USD in cash to acquire these claims
and issued 250,000 shares to the claim’s
owner. In November 2020, Arizona Silver
bought out the existing 1% Net Smelter
Return. This transaction enabled the
company to have no future lease or
NSR payments on the property.
In 2021, AZS drilling discovered a large-
scale bulk tonnage target:
115.85 meters grading 1.34 gpt Au,
5.78 gpt Ag
103.70 meters grading 1.57 gpt Au,
7.6 gpt Ag
The first five drill holes showed solid
results for the 2022 drill program
(10,000 feet, or 3,000meters).
High-grade Gold and silver have been
found in the Hanging Wall vein, including
32.90 gpt gold and 97 gpt silver from 85.73-
86.71 meters. Green quartz signifies the
richest existing deposits, a sight miners
love to see in any drilling material.
SILVERTON GOLD PROJECT
The Silverton Gold project is a Carlin-
type (sediment-hosted disseminated
gold deposits) exploration in Nye
County, Nevada. The Silverton
property began to be explored in the
early 1980s. The property, acquired
in August 2020, consists of 77 claims
totaling around 1,540 acres.
Arizona Silver is currently leasing the
property. The company must pay $25k
USD each anniversary year perpetually.
Arizona Silver also has an option to buy the
property for $1.25M USD, with a retained
2% Net Sales Royalty (to the underlying
owner of the claims) and a 1% Net Smelter
Return (to the assignor of the lease). They
could buy out the Royalty for US$1.25M
and US $500k, respectively. The project
does not have any work commitment.
RAMSEY SILVER PROJECT
The Ramsey Silver project is in Arizona,
2 hours away from Phoenix. The project
covers 400 acres
and consists of 20
claims (2 patented,
12 leased, and six
owned). The 100%
owned project
with royalty buy-
outs has lead
and zinc present
but not assayed.
There have been
intercepts of up
to 46m with 304
gpt Ag. Historic
production shows
1370 gpt Ag.
SYCAMORE CANYON PROPERTY
The Sycamore Canyon property is in
Southern Graham County, Arizona. The
project consists of 37 unpatented claims.
Values up to 31 gpt (0.903 opt) Au, and 458
gpt (13.34 opt) Ag, were collected from a
1-meter wide channel in a prospect pit
from a total of 42 samples collected within
the silicified breccias. In the southeastern
end of the outcrop extent, the last samples
collected contained between 1.34-3.02 gpt
Au and 59.7 -208.4 gpt Ag.
SHARE STRUCTURE/FUNDAMENTALS
The company is led by Mike Stark
(President & CEO). Mr. Stark’s background
includes corporate financing, investor
relations, market support, and corporate
strategic development. Throughout his
32 years of business in private and 27
years in the public sector, he notably
worked with Exeter Resources and
Extorre Resources.
Gregory Hahn is also an essential
part of the company, with 43 years of
experience in exploration and mine
development. He notably formed
Constellation (formerly known as
Summo Minerals) and took it public on
the TSX (199-2007), helped Marathon
PGM Corporation be sold to Stillwater
Mining for $170 million value at a +200%
premium to market (2003-2010), and
managed Marathon PGM Corporation
increasing its market cap from $40M
post-merger to $140M in eight months.
On April 28 th
, the company shared
its financial statement for the three
months ending February 28th. The
company has a strong balance sheet
with $6.6M in total assets and no debt
($612k in cash included). They have
also exercised over 2 million warrants
at 30 cents ($600k worth), increasing
cash in the treasury.
Arizona Silver also has a great share
structure. The company only has 76.7M
shares fully diluted. Usually, many junior
mining companies have this data above
100M because they need to raise cash
several times through private placements.
AZS has 64.4M shares issued and
outstanding for 6,2M warrants (average
price: $0.34/ average life: 3.73 years) and
6M options (average price: $0.23/ average
life: 3.73 years). This means the company
could raise $3.4M in additional cash when
Arizona Silver has the leverage to exercise
them. About the outstanding and issued
share structure, it is built this way:
Family and friends: 41% (26.4M shares);
Insiders: 28% (18M shares);
Institution: 9% (5.8M shares);
Retail (or float): 22% (14M shares).
As an investor, you should strongly
appreciate these numbers. 78% locked
for only a 22% float; this data will enable
the stock to have wider variations.
In general, Mike Stark and the board
often buy market shares. Mike Stark
bought ten times since the beginning of
June, totaling 34k shares worth $11.4k.
The stock price witnessed a 52-week high
of $0.60 (March 25th
, 2022) and a 52-week
low of $0.17 (December 8 th
). The company
is valued at less than $20M, which leads
us to say Arizona Silver is significantly
undervalued. Other indicators (such as
the RSI, oscillators, and Moving Averages)
tell us the stock is OVERSOLD.
“All the money received
from our recent private
placements is put to work.
For each dollar, 80% goes
to the ground. Success
will be beneficial for our
shareholders”.
Mike Stark, CEO
BOTTOM LINE
Arizona Silver Corp (TSXV:
AZS; OTCQB: AZASF) has strong
fundamentals (with only a 22%
float), constant insider buying, and
signs indicating the company is
strongly undervalued. The company’s
Philadelphia property is its forefront
asset, with recently proven drilling
and more results coming. Besides
AZS’ other projects (Silverton (Gold),
Ramsey (Silver), Sycamore Canyon),
their history records indicate the
company could find great surprises.