South32 invests C$110m in Canada-based explorer

PERTH (miningweekly.com) – Diversified miner South32 has taken a C$110.3-million share placement in TSX-listed Arizona Mining, which is hunting for zinc in the US.

South32 will subscribe for 45-million shares in Arizona Mining, priced at C$2.45 a share, which Vancouver-based Arizona said on Tuesday represented around 15% of the company’s outstanding shares on a non-diluted basis.

South32 will have the right to nominate a director to the Arizona Mining board.

Arizona Mining CEO Jim Gowans said that the diversified miner’s investment represented an endorsement of the Taylor zinc/lead/silver deposit, and recognised the deposit’s growing world-class stature and additional prospectivity.

Proceeds from the share placement will be used to add drill rigs and fully test the Taylor Deeps, Trench Vein system and other high priority targets, as well as to advance the Taylor deposit feasibility study and permitting stage.

Prefeasibility studies at the Hermosa-Taylor project show that the project will have a net present value of some $1.26-billion and an after tax internal rate of return of 42%. The project currently has an 8.6-million-tonne measured resource, grading 4.2% zinc, 4% lead and 1.6 opt silver, as well as 63.8-million tonnes of indicated resource and 38.6-million tonnes of inferred resource.

South32 in April signed an option agreement with TSX-listed Trilogy Metals over its Upper Kobuk mineral project, in Alaska, with the aim of providing Trilogy with $30-million over a three-year period, to test the extension of the high-grade copper resource at the project’s Bornite deposit.

The miner also signed a strategic alliance with ASX-listed AusQuest earlier this year, to hunt for exploration opportunities in Australia and Peru.