Arizona Eagle: Post-Financing Market Update

0:04 Good morning or good afternoon, depending on where in the world you're signing in from today. I'm lucky enough to have with me today Kevin Reitz, CEO of Arizona Eagle Mining, following the completion of their oversubscribed financing last night. Just as we get Kevin online here, I'll ask how are you doing today?

0:21 I'm doing well, Romeo. Thank you for having me. Awesome. Now, just for the folks in the room, we said today is going to work. It is an interactive event. I've got some questions for Kevin just based on the closing of the financing, but feel free to answer your own questions in the chat button at the bottom of your screen. We'll be sure to get to as many questions as we can today, but just in case we don't, I'll make sure that the Arizona team gets them just following today's event.

0:45 Of course, this is interactive, so make a mention at any time. But also there's a request meeting button at the bottom of your screen. Go ahead and hit that. I'll get you connected with the Arizona Eagle team following the event. So please do hit that button at any point during today's event, and I'll help you schedule a meeting as we go through it. So let's get into the meat and potatoes, if you don't mind, Kevin. You disclosed the financing yesterday, came in over 8.5 million, well above the 3 million minimum that you'd set, well over subscribed, obviously. So in a market where a lot of juniors, and I know many of them are struggling to raise a nickel, what do you think that level of demand is telling you about how investors are reading this project?

1:25 Well clearly it's positive. Clearly it's positive. And yeah, We're very pleased with the way the financing was received. We've done a few meetings here along the way, some marketing at some conferences and some independent marketing as well. And it's a great story to tell. And the high-grade nature of the deposit and the past producing nature and the fact that we are in a place where we can permit and have has been permitted in the past, People are getting it and they're understanding the opportunity that the McCabe mine presents in the fact that it's high-grade Gold, it's high-grade Silver, it's a past producer, It's open in all directions.

2:18 But what's really resonating with investors is the fact that we've assembled many kilometres of strike on the structure and there's 12 past producing mines on the private ground that we've assembled in addition to the over 4,000 acres of BLM ground. So the story is resonating with people. And even though we're seeing a slight pullback here off of a very robust move in the Gold and Silver prices, which is not to be unexpected. We're still seeing a lot of interest and the fact that we went out for 3 in order to close on the Silver acquisitions and begin a phase 1 drill program on the Silver projects.

3:04 We had significant investor demand and we wanted to accommodate people and give us more flexibility to pursue opportunities at McCabe at the McCabe project. Awesome. Now, I know people always love to ask as soon as a company's cashed up, you know, what's next? I know you've laid out a few places the money's going in the release. The next phase of drilling at McCabe, obviously, silver acquisition is first real program and some working capital. How are you thinking about sequencing that spend? And what does the Treasury now

3:35 let you do over the next 12 months that you couldn't before? Well, that's a very interesting question and an excellent question. This new Treasury, so As people do know, that have been following the story, we've acquired a past producing mine and again, there's many past producing mines on our project, but really the anchor is the McCabe mine. In the 1980s, they sunk a shaft down to initially 850 feet. Then they extended that shaft to 1,450 feet. It sounds like a deep shaft, but in underground mining terms, it's quite a shallow underground mine, the extent being just 400m. The neighbouring mine, the Iron King mine, was mined to a kilometre and was open to depth. That's about 3 miles of krill flies from us. So, we have this infrastructure that was capped in 1993 by BHP.

4:33 They closed the mine, but they closed the mine in a manner that it could be reopened and they could go back into it. So, Gold prices were in a malaise in the early 90s. BHP had just acquired Magma, which held the project, Magma Copper, and they went to build Escondida. BHP had a lot on their plate and Gold prices being where they were, they capped this mine with the, it appears, and of course it's hard for me to read their mind 40 years ago, but it appears from what we see is it was capped in a way that they could come back to it. So with this expanded balance sheet now that we have as a result of this incredible investor support we've had, not only from our existing shareholders,

5:18 folks like Power 1, who have been incredibly supportive. But we have these additional funds, so we're starting to look at, is there a way, and I don't have the answers today, but given that we have an expanded balance sheet, it's something that we should explore. Is there a way to access that shaft?

5:36 Is there a way to get underground? We're exploring it. We believe there are ways. But that shaft would cost us $20M-ish to replace. There are kilometres of underground workings where the reserves are, where the resources are. This gives us a little bit of flexibility to see what that would entail. In addition to starting off with a phase 1 drilling program at the near closer to surface silver targets and of course closing on them with the funds, we're exploring other alternatives and perhaps more robust alternatives to evaluate the future of McCabe. Awesome. And I did want to get deeper into McCabe itself, so I'm glad that's a good jumping off point, because as you said, it's a past producer with a historic estimate of roughly 877,000 ounces of gold at almost 12 grams. And it was only ever drilled to about 440m before the previous operators walked away, as I understand it. For someone hearing the name for the first time, I know there's some folks in the audience who are, what's to you the core of the opportunity here and what does the Maiden drill program need to prove out?

6:46 Well, we're still waiting on results from phase 1 on McCabe. We did make a discovery, actually, and we have announced this discovery that we hit what appears to be the mining zone off of, I want to say approximately the 850-foot level. There's a fault along the structure where it's been faulted 30 meters to the north and we discovered that. That was not previously mined and it was not previous, the fault was where that zone extended was not known by

7:17 the previous operators and we discovered it on hole 2. Again, testing our theory that the zone is outside of the historic resource estimate done by Derry, Michener, Booth and Wall in 1984. This is outside of that.

7:34 Also, as you mentioned, we have a hole that they did in the 80s, below the 400-foot level. So at 480, you're right, they hit 1.4m of 19.4g per tonne, very robust gold intercept. Again, they were using a much higher cutoff grade of 6.8 grams per ton, which in today's, you know, that was in a $300 gold environment. Today in a $4,000 gold environment, or even a $2,000 gold environment, You're using a much lower cutoff grade to, you know, to bring in more gold, obviously. And that would be closer to in today's, you know, this type of mine would be in the more 2 and a half gram cutoff grade. So there's so many opportunities here just with McCabe, which is, okay, is there more gold in the envelope when you lower the cutoff grade? In other words, do you make the balloon bigger? Do you make the envelope bigger by lowering the cutoff grade? Well, what we've learned from hole number 2 is we got 0.8 meters of 11 grams, but we got, which is, you know, it's a narrow high grade width or intercept.

8:42 But what we learned was we've got almost 5m of almost 6g. So When you lower the cut-off grade, it appears, based on that hole, this is very preliminary data, and we don't have a hole, that's 1 hole, but it shows that if you lower the cut-off grade below 6.8g, there's more Gold.

9:04 So of course that's important because it means your mining width would expand. It means the resource would expand. It just changes the dynamic of what would be an operation. So there's a lot there and a lot to do. We intend to continue to do it and longer term

9:23 showing the market that there is a lot of Gold here, there's a lot of Silver here and there's many opportunities for new discoveries in addition to the already robust deposit that we have based on historic estimates. Well, exciting. I'll broaden it out and say beyond the McCabe vein, You've mapped something like 12 parallel and conjugate structures within 5 kilometers. Most of which as I understand it, I've just never seen a modern drill period. So how do you think about that exploration runway and what gives you any confidence that this could be a district rather than just a single spot? Well, thank you, Romeo.

10:03 That's the point we do want to drive home, is that the McCabe is a part of a much larger system. And we've acquired enough ground in total, including the BLM ground, almost 5,000 acres. And that is a district,

10:21 for lack of a better term. It's an incredible amount of property. And how do we know, and that's a great question, how do we know that there's more there? Well, if you draw a line from the bottom of the project in the southwest corner, you'd go northeast towards the Iron King mine. That's approximately 5km. Now across that 5km, what we have is historic shafts that were mined at very shallow depths where they mined the oxide in the early 1900s, for example, scattered across this project. Now, these were in 20, essentially 20-acre parcels that were all divvied up after the California Gold Rush. They came to Arizona and they all had their pieces of ground. There are 12 that we know of, past producing mines on the structure.

11:10 For us, that's a pretty good indicator that there's more mineral there. It didn't start at surface and go to 150m, it likely came from depth. And it's arguably probably much deeper. It's an epithermal, mesothermal system and they can go into the kilometres. So clearly having a scattering of shafts, it wasn't drilled as you rightly point out. It was just mined. And so we've consolidated the district and we want to apply modern exploration methods to this. Now, it seems ridiculous that modern exploration methods haven't been applied to this project. In a way, they haven't.

11:56 In the 80s, what did Stan West do when they acquired this project when Gold went to $800? They sunk a shaft. They just started essentially putting together a mine plant and they drilled underground and they did channel sampling and tunneling and drifting underground. But they didn't apply what we would consider in our, you know, today's, by today's standards, modern exploration to the district. They just said, let's go mine it. Yeah, sure.

12:21 It's certainly a different time in the 80s, so it's exciting to see what you guys can do now. Part of the plan, as I understand it, and correct me if I'm wrong, is completing the acquisition of 3 past producing Silver mines and putting a drill program into them as well. If I'm right there, what's the thinking behind building out the Silver side of the story and how do those assets fit, for the investors in the room, how do those fit alongside the Gold at McCabe? Well it's number 1, it's along the structure. So it's basically a part of the system. And what we're seeing is the system is in the southwest corner, it appears to be more higher-grade Gold. And as we migrate towards the past producing Iron King mine that produced 1 million ounces of Gold and 1 billion pounds of Zinc, practically in millions of ounces of Silver. As we go along that trend to the Northeast, we're seeing that the mineralization appears to be becoming more Silver-rich, although there's still Gold in it.

13:14 And We're exploring, like first of all, it's on the structure, it's part of the land package and it gives us, it almost doubles our strike length on this McCabe structure. But obviously, the high-grade Silver component being it was mined at 20oz per tonne based on the historic record and it started at surface.

13:37 It's an incredibly important part of the overall story because it gives us the opportunity to potentially double the resource and in a high-grade Silver fashion. We love Silver. We love the opportunity it represents. To have a high-grade Gold mine on the left side and a high-grade Silver mine on the right side, putting them together, it's

14:02 just for us, we could do the right deal. And we think the shareholders are going to benefit from it. No fun. And I hate to sound like a but wait, there's more. But there is the copper and VMS angle as well. The VTEM anomaly compared to the old United Verde system, which is just up the road. That's to me kind of a real blue sky on top of everything else. How are you balancing? I just I love getting inside people's heads strategically. How are you balancing chasing that kind of district scale upside against the discipline of just advancing the Gold and Silver, you can already point to. And I know insiders hold more than half the company alongside shareholders. How are you guys thinking about this? Well, we're incredibly excited about it. I mean, we're in a well-known VMS system, like the underpinning the geology here is protozoic, protozoic geology, where we have VMS deposits in the neighbourhood, many of them.

14:57 To see almost 30% Copper, an ounce per tonne Gold, many percent Copper, many different samples on top of an incredibly conductive body, as we do in what we're calling the Copper zone, in a known VMS district is incredibly exciting. We believe that's incredibly exciting and it obviously needs to be drilled.

15:22 So how we are approaching this is doing the work we can do to get it as drill ready as possible But really focusing on, because we do have a lot to do. We have, we've got over 8km on just our private ground, the 400 acres of past producing structurally controlled high-grade Gold mines, past producers along the structure. And that is obviously a lot of ground. The McCabe mine itself is only over 800m.

15:53 We've got 10 times the McCabe's just on our private ground to explore. Plus we have this district encapsulated by the BLM ground with all these other things, including this Copper Zone. So how are we going to balance that? Well, we're going to drive value. Obviously our management and board decisions are to drive value. So strategically, we're going to

16:22 look for what is the best return on our dollar. And if doing A is the we believe will give us the best return on our dollar, ROI, right? And that's what we're going to do. And, you know, down the road, once the risk return starts to become more beneficial for doing, this is essentially wildcat drilling on a copper target, When our market cap is at a place that an exploration budget for something like that is a relatively small percentage of our market cap, then that's when we'll approach it. It's there. It's not going anywhere. It's been there for over 1 billion years. We have it. It's not going anywhere.

17:05 Strategically, it's how do we generate the best return for our shareholders' investment and build that market cap so that we're in a place where we can take a little bit more of a drilling, that would be a drilling story hitting the target, the Copper target.

17:25 It has to be the right balance of market cap to investment. We have so many things that are low-hanging fruit in our minds on McCabe that, you know, getting in there and hitting those high-grade zones and showing that the McCabe mine is bigger, that will underpin their value. You know, we're building this. We want a strong foundation and build off of it. So it's a very enticing target. But again, it's we have to do it in a pragmatic way that we create as much shareholder value as possible along the way. No, I appreciate that. It's always good to get a look behind the curtain strategically.

18:01 One more for me before I get into the great questions that have already come in from the audience. Looking out over the rest of 2026, you've got drill results coming, IP survey data pending, solar program kicking off and more land in negotiation. Obviously a lot on the go, but for investors sizing up Arizona Eagle today, now that you're cashed up coming out of this financing, what are the milestones you tell them to watch? And kind of what version of this company are you trying to build over the next year? Well, there's a lot there. And Obviously, a lot of this is results-driven. You never know when you're going to get that special hole. Obviously, we're drilling. The Silver project we're drilling. To say we know what we're going to get,

18:45 that would be naive of me to say, we, we know that we have past producing mines, we have shafts. So we are drilling it to see, you know, how does that extend a depth, a long strike? What does it look like? What kind of system is this? Is this part of the,

19:02 Is this part of the mesothermal, Laramide Orogeny, the younger structural system, or is this part of a VMS system? There's still some learning for us to do, which is exciting because we think there's some incredible opportunities there. Look for results from the drilling. But also, as I mentioned, we have about US$30M to US$40M, and this is 1980s dollars. In today's dollars, around US$100M of value at McCabe. What do I mean by value? Well, to sink a shaft today would be US$20M and to put 5km of underground workings would be another 5 times, we're talking about another, say it's another US$15M. Okay, so would be another 5x.

19:54 We're talking about another $15M. There's so much infrastructure there. The infrastructure in today's dollars, just sinking that shaft, all the underground workings, is close to $100M in today's dollars, just to replicate the infrastructure. Our market cap today is based on our raise now, it would be close to CAD$60M, with about CAD$8M in the bank. What we're exploring is how do we unlock that value? And of course, this is something we're exploring as we should. We're exploring how do we unlock that value. Is this the best way I could describe it? As I mentioned, BHP closed the mine to our understanding based on the reports. Of course, it's going to require follow-up work, which we're doing.

20:45 That it was closed in a way that you could go back to it. And I'll just leave it at that. Hey, great. I know, appreciate that you ran through my questions. There's some from the audience that we've already touched on, but I think it's a good opportunity to get back into it. Right at the top of the hour, T from the chat asked, what's the permitting timeline in Arizona? But I think it'd be helpful to also go over what permits you already have, what advantages you have working in the spot you are in Arizona. So let's just get into permitting a little bit so you can speak to it here. Okay, so When it comes to drilling and putting roads in and drill pads, the key to point out here is along that structure that I mentioned, the McCabe structure, we'll call it, and the parallel structures, most is on private ground.

21:38 It's patented ground. That's our ground. It's not BLM ground. It's our ground. Accessing that area, which is where we would do all our surface disturbance, where we're doing all our drilling, permitting is much more straightforward than going through the Bureau of Land Management. I'll just state it's much simpler because it's not their ground, So we don't have to go through their processes. So getting a drill permit for us was straightforward. We applied for it in 48 hours. We had it. So we have a drill permit. Now, we are not at a stage as a company where we're exploring reopening or mining. That's not where we're at. We have an understanding of the permitting process.

22:24 I will simply say that being on patented ground is a much quicker timeline because we're not going through a BLM or National Forest timeline. This is the advice we've gotten. If we were to go back into production, of course, I'm not going to go through the list of permits because there's a lot. There's air quality permits, there's an explosives permit, there's a water discharge permit. I can go through, there's a list of permits that any mining operation in the United States would have to get or can't for that matter anywhere. But being on patented ground, our timeline to production would be quicker than if it was on federal ground. Great, I appreciate that. James from the chat asked, how's your relationship with local communities?

23:12 It's excellent. We are new to the neighborhood. We've only owned the project for about 12 months. Dewey Humboldt is our closest neighbor. It's a town of 300 people. It's about, you know, 7 kilometers as a crow flies from the project out beyond the hills and across the road. We're really out of sight where we are on our private ground, on our patented ground again. But the relationship is excellent. We've met with town council, we've had them to site and of course, they're interested in knowing what we're doing. It's a very pro-mining place. They're really interested in how does this benefit the community and how can we be good stewards. And it's really interesting when we do take people to site and they say, well, what would it look like after a mine has been here?

24:00 And our answer is, well, there was a mine here and it's been reclaimed. So what you're seeing is the after effects of mining and the type of mine that we have, which would be a high-grade, low-tonnage mine. So the disturbance is really, it's far less than an open-pit mine. So we get asked that question, we say, well, you're looking at it and this is how we would intend. I mean, again, if this was to be a mine, I believe it would be an operation, probably maybe well past my life expectancy. So it'll be in the hands of someone else, ideally. But yeah, the communication relations are excellent. That's great. James also asked, when are next drill results back? When are next assays back? I don't. We've been blacked out because of the financing, so I don't have an answer, but I suspect we'll have some soon.

24:53 Stay tuned, I guess, James. T asks one of those sort of impossible questions, but I'll throw it to you anyway. Does this mean no more financings this year? Do you consider yourself cashed up to the end of the year? Well, I can tell you we're cashed up to do what we stated, which was to acquire these Silver projects, to start a phase 1 program and to continue to advance the McCabe mine. Now, as I mentioned, we have nearly $100M in today's dollars based on the historic spend of sinking shafts and kilometres of drifts and all that type of thing. We've got nearly US$100M in today's dollars of infrastructure that we would like to explore.

25:39 I don't have a budget today on what that will cost and what that will totally involve, But we want to certainly figure out a way to use that infrastructure to the company's advantage. And I don't have a budget for that as we sit today. We could have enough money for that. You got to explore to explore, makes sense. Kevin, thank you so much for running through questions. Thanks, I know there are quite a few people in the room. If you think of the perfect question to ask following the event, please do let me know. I'll make sure that it gets to Kevin and the team. Also, last chance here to hit that request meeting button at the bottom of the screen to get yourself connected. But Kevin, congratulations on obviously an oversubscribed financing.

26:26 And this little short dip in the gold market is very impressive. So congratulations to you and the team. I'm looking forward to seeing what happens next. Great. Thank you, Romeo. And thanks everyone for joining us today. Appreciate it. Have a good morning or afternoon, everyone. Cheers.