Arizona Mining takes exception to Global Mining article

2016-12-12 06:41 ET - News Release

Ms. Susan Muir reports
ARIZONA MINING REFUTES MISLEADING ARTICLE ON TAYLOR DEPOSIT
Arizona Mining Inc. is addressing an article published by the Global Mining Observer on Sunday, Dec. 11, 2016, regarding the company's Hermosa project in Santa Cruz county, Arizona, which the company believes is misleading. The company is issuing this statement to provide its shareholders and the market with accurate information.

First, the article appeared to infer that the Taylor deposit was a renamed version of the Central deposit. There are, in fact, two distinct deposits at the Hermosa project -- the Taylor zinc-lead-silver sulphide deposit and the Central deposit, which is a manganese-silver oxide deposit. The article implies these deposits are one and the same, which is incorrect.

The metallurgical testwork on the Taylor deposit was conducted by Resource Development Inc. (RDI) and has returned excellent results to date which were initially published in a Jan. 7, 2016, press release, subsequently on Feb. 1, 2016, with the maiden resource calculation, and reiterated by RDI within the technical report released on Nov. 29, 2016. These results concluded that the deposit could produce two concentrates: a lead concentrate which grades 75.1 per cent lead, 804 grams per tonne silver, 1.1 per cent zinc and contains 0.1 per cent manganese; and a zinc concentrate which grades 56.3 per cent zinc, 0.3 per cent lead, 144 grams per tonne silver and contains 1.3 per cent manganese.
 
The technical report stated: "The concentrates had no deleterious elements. These results indicate that the conventional process flowsheet and simple reagent suite will produce marketable grade lead-zinc concentrate." It further concluded that "based on the encouraging results in the scoping study, the Company should proceed with pre-feasibility level testwork." As a follow-on step and to further refine the metallurgical process, the company will conduct further flotation work, particularly on cleaner flotation, in an effort to reduce the manganese in the zinc concentrate.

Second, as referred to above, the technical report noted that the zinc concentrate composite analyzed contained 1.3 per cent manganese, which is referred to in the Global Mining Observer article as making the deposit unworkable and/or unsaleable. As noted above, the technical report states that the Taylor deposit will produce marketable grade lead-zinc concentrates. To quantify further, the penalties for a zinc concentrate containing 1.3 per cent manganese are estimated to be $12 per dry metric tonne versus the zinc concentrate value of over $1,100 per dry metric tonne at a $1.00-per-pound zinc price. This equates to approximately 1 per cent of the concentrate value and is therefore immaterial.

Based on the company's experience to date with the consultants involved in the scoping study and the preliminary economic assessment, the company has heard nothing to indicate that concentrates from the Taylor deposit would not be saleable. To the contrary, given the high grade of the zinc concentrates, the company expects they will be sought after.
Arizona Mining chief executive officer Jim Gowans commented: "In all studies to date, everything has pointed to a very saleable, high-grade zinc concentrate. Additional metallurgical testing is under way to further improve our results. In my previous experience, I encountered a similar situation involving concentrates with comparable levels of magnesium oxide which we were able to significantly reduce by simply installing froth washing on the final stage of the zinc cleaners. We will be looking into this methodology for our zinc concentrates produced from the Taylor deposit."

Qualified person
The metallurgical results in the Nov. 29, 2016, technical report have been undertaken by Deepak Malhotra of Resource Development. Mr. Malhotra is a qualified person as defined by National Instrument 43-101 and a registered member in good standing of the Association of Society of Mining, Metallurgy and Exploration Inc. (license No. 2006420RM). Mr. Malhotra has worked as a metallurgist/mineral economist for 43 years since graduating from the Colorado School of Mines.

About Arizona Mining
Arizona Mining is focused on the exploration and development of its 100-per-cent-owned Hermosa project located in Santa Cruz county, Arizona.
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