RE:analysisBUY Price C$5.26 (Close 5/26/22) FLASH NOTE Site Tour Highlights: Measured Approach Building Tonnes, and Relationships Summary We toured AMC's Kay property and exploration facilities this week. We come away impressed with the quality and methodology of AMC management and geologists. The company is taking a methodical, measured approach to exploration, all the while building the proper reputation and relationships with local stakeholders. Logistical staff on site are well-connected in the community and BLM, and have a good reputation. Additionally, two favorable attributes were readily clear from visiting site. First - proximity and access to Phoenix, skilled labour, consumables, and supporting infrastructure. Second - the scalability of the property, a rare instance of exploration potential not being handicapped by development scenarios. Key Points Building tonnes, and relationships. We come away impressed with the quality and mentality of AMC management and geologists. The company is taking a methodical, measured approach to exploration, building a clean, robust dataset. This will take time, but we view it as the correct long term approach. The measured approach carries through from data collection to site maintenance. Drill pads are organized with minimal land disturbance and noise, building AMC a reputation of stewards of the land they work on and responsible explorationists. Safety and cleanliness is a main priority at pads. Core is then shipped to logging facility in Phoenix to be logged prior to splitting and sent for assay. AMC’s logging facility is clean and well organized. The exploration process is building tonnes, and it is also building the company’s social license in the area. Logistical staff on site are wellconnected in the community and BLM, and have a good reputation. Trust has been earned not granted via consistent effort and action. Access roads are kept clean and sprayed with a dust binder to minimize disturbance. Safety was a high priority when on site, with vehicle documentation and safety shares and signage all readily available. In addition to our impressions of AMC's exploration process, we highlight two favorable attributes that were readily clear from visiting site. 1. Proximity & Access. Kay is less than a five-minute drive from a major six lane highway, forty-five minutes from Phoenix. From Phoenix airport to site would take less than an hour. The project is close to first class amenities, skilled labour, consumables, and supporting infrastructure. • AMC’s core shack is in Phoenix, with a Home Depot four miles away. Easy access to facilities provides cost-effective labour. Minimizing building supporting infrastructure can help contain inflationary capital items to reach first production, and Kay has power, water, fuel all on its doorstep. • Proximity to Black Canyon city has been proposed as a potential issue but a main takeaway from the tour is topography should benefit the development scenario. The project exists behind multiple ridgebacks and hills, which will help to significantly hide the project from view. The majority of operations will occur underground, minimizing surficial disturbance (HBM’s +5ktpd Lalor mine exists on just 9ha of surficial disturbance) with multiple possible development scenarios able to minimize view shed of infrastructure. 2. Scalability. The Kay property has the ability to provide numerous ‘build what you want’ project development scenarios, and is a rare project where exploration potential is not handicapped by development. Intense post – mineral folding has had an ‘accordion effect’ on the property. The 2.5km wide property hosts 10-12km of the same prospective stratigraphic contact that the Kay deposit is hosted by. Both the Central and West targets exist along this contact that has been mapped at surface in outcrop. Coincident gossan, gravity, EM, and soils provide further confidence in the potential of these targets. • The proximity of Central and West to Kay was a main takeaway from our tour. The central target is currently being drill tested, with a rig spinning less than 200m from the rigs spinning on Kay (see figure A). • Much mineralization in the district is hosted at this contact. It has been proven across the Jerome/Verde copper mining district for the last 100 years, and controlled mineralization at the United Verde high grade underground mine that Phelps Dodge worked for over 50 years (see figure D). Progress update. A rig is currently spinning on pad 7(see figure B), drilling the Central target. Thus far the company has intercepted the same graphitic marker unit intercepted in stratigraphy drilled at Kay. Graphite is usually the ‘smoke’ to the massive sulfide ‘fire’, with its presence intimating sulphur and a heat source – both necessary for VMS ore. See figure compilation on next page. Prepared by Stifel Nicolaus Canada Inc. Stifel does and seeks to do business with companies covered in its research reports. As a result, investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only a single factor in making their investment decision. All relevant disclosures and certifications appear on pages 4 to 6 of this report. Investment Thesis High grade historical resource a head start for exploration at Kay. Kay hosts a historical non NI 43-101 compliant high grade (approximately 6% CuEq) resource of 5.8MMt by Exxon from 1982. Proven district. There are 60 past producing VMS mines within 150km of Kay. Freeport and Grupo Mexico have significant vertical infrastructure close by. Tier 1 jurisdiction. Kay is on private or BLM land, with no royalties. The property is also not close to National Forests. Arizona produces the majority of the U.S.’s copper. Property wide exploration at Kay leaves the door open for a ‘beachhead’ development strategy. Two high priority targets exist to the west of Kay, with strongly similar surficial geochemical and geophysical signatures to Kay. AMC is in the process of proving up its ‘accordion folding thesis’, which intimates that mineralization at Kay is repeated at these two targets. Target Price Methodology/Risks Applying a 0.75x multiple to reflect the pre resource, predevelopment risk of both Kay and Sugarloaf to our corporate NAV, we arrive at a target price of C$7.50/sh. RISKS Market risk/gold price – Profitability and cash flow will be directly impacted by changes in gold prices. A material decline in gold/metal prices would adversely affect profitability, cash flow and may also render certain projects uneconomical. Price and cost instability – In addition to gold/metal prices, foreign currency rates and the costs of various input materials associated with mining can fluctuate substantially, resulting in a negative impact on the company’s profitability. Technical risk and economic viability – Mining operations/projects can be exposed to various operational risks that could impact cash flow and a company’s ability to secure future liquidity. Geopolitical risk – Mining operations/projects in higher geopolitical risk countries can be exposed to changes in government policies, such as permitting policies, licenses and tax laws, which can negatively impact the mining companies. Exploration – Exploration success cannot guarantee an increase in a mine’s/project’s resource base or conversion to mineral reserves. Company Description Arizona Metals is a Canadian resource development company with two assets in Arizona. Arizona Metals owns 100% of the Kay Mine Property in Yavapai County, a combination of patented and BLM claims with no royalties. The property hosts a historical, non NI 43-101 compliant resource of 5.6MMt @ 2.2% Cu, 3.03% Zn, 2.8g/t Au, and 55g/t Ag, developed by Exxon Minerals in 1982. Arizona Metals also owns 100% of the Sugarloaf Peak Property in La Paz County, Arizona. Arizona Metals Corp. AMC-TSXV Canada - Base Me