Expert Says Tombstone Drill Results Will 'Definitely Add Ounces'

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Aztec Minerals Corp. (AZT:TSX.V; AZZTF:OTCQB) announced it intersected two "broad gold-silver oxide mineralized zones" in its first step-out drilling holes in the Contention Open Pit area of its Tombstone Project in Arizona's historic Tombstone gold-silver mining district.

Hole TR24-01 intersected 103.6 meters of 0.75 grams per tonne gold equivalent (g/t Au Eq), or 0.59 g/t Au and 12.48 g/t silver (Ag); including 15.3 meters of 3.11 g/t Au Eq, or 2.84 g/t Au and 21.4 g/t Ag, the company said. Hole TR24-02 intersected 0.19 g/t Au and 8.34 g/t Ag, or 0.3 g/t Au Eq over 149.4 meters.

In an update on Thursday, newsletter writer Jeff Clark of The Gold Advisor noted the results will "definitely add ounces."

"Aztec holds a 77.7% interest in Tombstone, which includes the majority of the original main mining district," Clark wrote "The current drill program will continue testing the Contention target zone, and then complete Aztec's first drilling in the Westside target zone, comprised of several demonstrated mineralization focusing structures. This could be exciting."

The announcement came on Thursday, and while it hadn't seemed to move the needle on the stock yet, Clark said "not to fret."

"There is lots of additional drilling coming, some into higher-grade targets and some outside the pit area," he wrote. "Lots of news ahead, and I think this . . .  company sees higher prices once some splashy results are reported and when money flows into the junior sector again. In anticipation of that, I still hold an overweight position in the stock."

Aztec said 10 reverse-circulation holes have been drilled, with additional results pending in the next two to four weeks. The company also has approved expansion of the program to 3,000 meters from 2,000 meters.

"The current Contention area step-out drilling program is targeting shallow zones, associated with recently completed surface exploration and 3-D geological modelling, prospective for wide oxide gold-silver mineralization," Aztec said in a release. "Visual observations of the drilled sample materials and initial assay results continue to validate Aztec's geological exploration model."

Open to the West, to Depth

This initial phase of drilling is to expand the mineralized footprint identified between 2020-2023 at the Contention Pit and move toward the Westside area. Focused on discovering high-grade silver-gold mineralization by testing multiple mineralized structures, the program includes historic production zones such as the Westside anticline and Sulphuret dike.

In an update on Thursday, newsletter writer Jeff Clark of The Gold Advisor noted the results will "definitely add ounces."

Results so far indicate that the Contention area mineralization is still open to the west and to depth and the "mineralized volume is expanding," Aztec said in the release.

These first holes were drilled as part of a "fan grid pattern" being drilled in the Contention area since 2020, the company said. The RC drill holes are testing for extensions on the western and eastern borders and also underneath of the north-trending main Contention target zone, which hosts the historic underground and open pit Contention mine.

"The drill program continues to identify pervasively oxidized and hematite-rich, silicified hydrothermal breccias composed of quartz feldspar porphyry dike and Bisbee Group clastic sedimentary fragments, typical of the material mined historically at the Contention Mine," the company noted.

A 'Strong Buy'

*Technical Analyst Clive Maund has maintained a bullish stance on Aztec Minerals since an initial analysis in June. Maund rated the company as a Strong Buy, emphasizing the "potential for a big discovery" at its properties.

He pointed to the significant progress Aztec had made with its exploration programs and noted that the Tombstone project had "exceptionally positive" prospects. 

*On October 10, Maund reiterated his Strong Buy rating and noted the stock looked "poised to advance."

"This is, therefore, considered to be a very good point to buy or add to positions in Aztec Minerals, which continues to be rated a Strong Buy here," he wrote.

"The overall pattern that has formed in the stock since Aztec came to market in 2017 is a giant Cup & Handle base pattern, albeit a rather skewed one with a 'droopy' handle," Maund wrote. "If this interpretation is correct then the potential gains from here are very substantial and very possible given the discovery potential of the company coupled with the stellar outlook for gold as currencies collapse."

The Catalyst: Gold Is Catching Its Footing

The yellow metal has been shaky since the U.S. election after hitting a new record high last month. However, on Friday, it seemed to be finding some stability, breaching the US$2,700 mark again on Friday as "safe-haven demand outweighed dollar strength and lower expectations of a U.S. rate cut next month," according to Reuters.

Many experts are predicting a prolonged bull market for gold. FXEmpire Analyst Christopher Lewis thinks gold will reach US$3,000 per ounce, he wrote in an October 15 article. 

Declining interest rates and persistent geopolitical risks are expected to keep driving gold prices higher through 2025, analysts at UBS said, reported Investing.com.

"These elements are set to reinforce gold's status as a safe-haven asset while also benefiting from broader economic conditions anticipated in the coming year," Investing.com's Navamya Acharya wrote.

Writing for MarketWatch, Cam Hui this week noted that for 2025, he was "reiterating my bullish call on gold — even, and over U.S. stocks."

Ownership and Share Structure

According to Reuters, Aztec has a market cap of CA$23.5 million and trades in a 52-week range of CA$0.10 and CA$0.30 with 123.66 million shares outstanding.

About 5.15% of Aztec is owned by management and insiders and 13.39% is with strategic investors, Reuters reported.

Notable holders are Alamos Gold Inc with 7.24% and Kootenay Silver Inc. with 6.15%.

About 3.14% is owned by institutions. The rest is in retail.