VANCOUVER, April 25, 2016 /CNW/ – Arizona Mining Inc. (TSX: AZ), a subsidiary of the Augusta Group of Companies, has announced that the company has entered into a highly anticipated term sheet with Montreal-based Osisko Gold Royalties Ltd. Proceeds from this financing deal will be primarily used toward an aggressive drill campaign at Arizona Mining's Taylor Deposit, a project that has recently enjoyed positive press.
For their initial $10 million investment, Osisko will receive a 1 percent net smelter royalty on any lead, zinc or silver sulfide ores mined from Arizona Mining's ongoing project in Hermosa, Arizona.
Additionally, Osisko and a variety of select insiders will purchase 9.99 million units at a price of $0.56 per Unit, with each Unit consisting of a common share and one half of a common share purchase warrant. This is calculated to net Arizona Mining gross proceeds of $5.59 million on top of the $10 million.
"The drilling to-date that comprises the current resource on the Taylor Deposit only tests a small portion of the prospective terrain as defined by geology, geophysics and historic drilling," Arizona Mining President and CEO, Jim Gowans, said in a recent press release. "This drill program will give us a much better idea of the size and grade potential of the deposit."
As Gowans mentioned, the proceeds from the financings will be combined with the company's recent private placement for $2.8 million and will be used for a comprehensive and thorough drill campaign on the Taylor Deposit and for general working capital purposes.
Arizona Mining Chairman, Richard Warke, is excited about the deal and looks forward to revealing further potential at Taylor. "We currently have two drills on-site and expect to add an additional three in the coming months and years," said Richard Warke. "The deal with Osisko will ensure we are able to reach our targets and bring the resources to market."
Arizona Mining is a Canadian-based mining and exploration company developing a large lead and zinc project south of Tucson in Arizona's Santa Cruz County. Arizona Mining is under the umbrella of the Augusta Group of Companies, which is made up of a group of public companies and various private businesses, including Arizona Mining, Catalyst Copper and Armor Minerals.
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