Last month, we visited Aztec Minerals’ (AZT.V) Tombstone gold-silver project in Arizona. The project is located right next to the town of Tombstone which was put on the map after a large silver discovery and subsequent (silver) rush in the 1880s. While the town now mainly is a (seasonal) tourist destination, it still very much is the capital of a mining district. A district that was somewhat forgotten until it was looked at again and explored again with modern day technologies and techniques.
Aztec Minerals is the first company in decades that has been able to put meaningful amounts of cash to work on the property. Most of its exploration efforts were focused around the past producing Contention pit and step-out holes drilled towards the immediate western side next to the pit has yielded promising returns. The company recently increased the total amount of drilling it expects to complete on the property this year and we are hopeful this will culminate in a maiden resource calculation. We think this would be helpful to support the company’s valuation and provide additional comfort to investors.
And more importantly; Aztec Minerals is fully cashed up to complete the current round of drilling and publish a maiden resource estimate on both its Tombstone and Cervantes projects.
A brief recap of the Tombstone project
Aztec’s 85%-owned Tombstone project should be considered the flagship project as it certainly is the asset the company is focusing the vast majority of its attention and resources on. The project consists of 663 hectares (1639 acres) of patented and unpatented claims, and the historic Contention open pit is located entirely on Aztec-controlled ground.
The company had entered into the option agreement with the selling company in 2017, but the breakthrough came in 2020 when Aztec’s drill program encountered 67 meters of 1.6 g/t gold-equivalent, as well as 93 meters of 1.07 g/t gold-equivalent. Those are of course very encouraging results for a project that is approached as an open pit heap leach operation, and the company followed up on these assay results in 2021, where all 23 holes hit gold-silver mineralization.
As the assay results kept coming in over the subsequent few years, Aztec Minerals had to cast a wider net and drill-tested some of its high-priority regional targets. Initial drilling at the Westside zone intersected similar gold-silver oxide-hosted mineralization. While it is good to see the mineralization appears to be widespread, the main focus remains on the Contention zone. Given the drill results shown below, the Contention Zone for sure appears to be the area where it is ‘easier’ to build tonnage and to let a resource modeler do his/her job.
Throughout all of the exploration efforts, it became apparent there is a CRD target on Aztec’s land package. While the main focus of course remains on completing a maiden resource calculation on the oxide zones, the CRD target has not been sufficiently tested and remains a valid target. While interesting, Aztec will likely get the biggest bang for its buck and the best market recognition by initially building out the oxide-hosted gold-silver resource. That could subsequently provide the platform to backstop the company’s market capitalization making the access to capital and the cost of capital better than the current situation.
Drilling is ongoing, with two rigs
While we were on site, Aztec Minerals was drilling with one core rig and one RC rig, and it was great to see the company in action as it is gearing up to publish a maiden resource estimate later this year.
In previous exploration updates, Aztec has already disclosed the assay results of in excess of a dozen of holes. By now, released the assay results from fourteen additional holes that have been drilled at the Tombstone property in Arizona. The results of these RC holes, as well as their location, is quite interesting. Several of the holes expand the Contention Main target area to the west and depth including a highlighted intersection of almost 113 meters containing 0.48 g/t gold and 12.6 g/t silver (0.60 g/t AuEq using a 60:1 silver:gold ratio before taking recovery rates into account).
All 14 holes intersected mineralization (with varying grades, of course, some are good, some are a bit weaker – all results (good and bad) can be found in the company’s extensive update) and confirm the continuity of the mineralization. These results should hopefully be sufficient for Aztec Minerals to start working on a maiden resource estimate after the completion of the current 17,000 meter drill program at Tombstone.
In his CEO comment, CEO Dyakowski highlighted the potential to significantly increase the near-surface gold-silver oxide material at Tombstone. The focus is now on the Westside area and Southwest targets of the property while additional new targets (Ingersoll, Hard-up and Independence) are now being drill-tested as well. Those new targets are pretty shallow and within wheelbarrow distance from the historic and historical open pit operations.
Meanwhile, the core drill program is ongoing with average success. Unfortunately the company had to abandon hole TC25-04 at a depth of almost 832 meters due to drillhole caving, before it reached the target depth of 1,000 meters. The core rig was working on the 7th attempted hole and TC26-03 was targeting the central portion of the Contention mineralization. The core rig is also expected to drill another hole on the northern part of the project to chase the CRD target again. The RC drill program appears to be more successful as it is less hindered by the sometimes poor conditions. And that’s fine, as the RC rig is drilling for the oxide-hosted mineralization which is the low-hanging fruit on the property and the easiest to build tonnage and ounces.
Aztec Minerals had previously announced the JV management committee for the Tombstone project has approved a further expansion of the ongoing drill program. The updated program will now be complemented by an additional 4,500 meters of RC drilling. This will bring the total size of the drill program to a very respectable 17,000 meters, of which 14,200 meters will consist of Reverse Circulation drilling with an additional 2,800 meters of core drilling. The additional 4,500 meters of drilling will cost less than C$2M, and Aztec’s treasury can easily fund this.
This should result in a maiden resource calculation down the road
The company recently announced it has retained APEX Geoscience Ltd. to complete maiden resource estimates on both Tombstone as well as Cervantes.
The Tombstone resource will incorporate the data gathered from in excess of 25,000 meters of drilling since 2020, of which about 70% will have been completed in the past two years. The Tombstone resource will focus on the open pittable leachable oxidized gold-silver zones.
APEX will also complete a maiden resource calculation at Cervantes, which will incorporate the results from in excess of 12,000 meters of drilling in over 70 holes. We shouldn’t expect too much from the maiden resource at Cervantes as the initial resource should be seen as an initial stepping stone to further increase the resources down the path.
The company is cashed up after a recent raise
One of the key elements for a pre-revenue exploration stage company is of course to keep an eye on its own treasury to avoid having to go back to the market and finance at a bad time. Aztec capitalized on the strengthening gold and silver markets in the final quarter of last year as the company completed a C$10M bought deal. Aztec issued 42.6 million shares priced at C$0.235 per share in a warrant-free financing, ensuring it was well-capitalized ahead of a new drill program at Tombstone.
While the company hasn’t published its results for the first quarter of 2026 just yet, it ended 2025 with a positive working capital position of approximately C$8.2M. Additionally, the ‘subsequent events’ of the financial statements indicate Aztec received an additional C$520,000 in cash from the exercise of certain warrants and options in the first few months of 2026. This should ensure the cash position remains at a very healthy level, and Aztec can continue its exploration activities uninterrupted.
Also keep in mind there still are quite a few warrants expiring later this year. As of the end of 2025, there were about 3.5M warrants outstanding with an exercise price of C$0.30 with expiration dates in August and September of this year. On top of that, there were 6.9M warrants outstanding that are expiring in July of this year, and the exercise price of C$0.25 would result in a cash inflow of just under C$1.75M.
Note: considering about 2.24M warrants were exercised subsequent to the end of 2025, the total tally is approximately 8.1M warrants for total proceeds of just under C$3M. As Aztec’s share price has been trading in that C$0.25-0.30 bandwidth for the last little while, it shouldn’t take much to hopefully see the C$0.25 and C$0.30 warrants being exercised to top up the treasury throughout the summer.
Conclusion
While the company still owns the Cervantes project in Mexico’s Sonora state, it is clear that until the situation in Mexico improves, the company’s attention will be on the Arizona based Tombstone property. The decision to raise money in the final quarter of last year likely was the best call as this now allows VP Exploration David Heyl and his team to complete a meaningful drill program.
We hope that the data gathered from this additional drill program will be sufficient for the company to pull the trigger on a maiden resource calculation by the end of this year. As this project is interpreted to be a heap leach operation, the grade doesn’t have to be high as long as the mineralization is somewhat continuous and consistent, making it easier to develop an efficient earth-moving operation.
2026 could be full of catalysts for Aztec Minerals and we do hope the company will publish a resource calculation by the end of this year. We think this will provide something tangible and meaningful to underpin the company’s valuation and make it easier for the company to pitch its story to (potential) investors.
The next twelve months will be full of catalysts for Aztec Minerals, and we are mainly looking forward to seeing the maiden resource estimate for the Tombstone property as US-based projects are capturing a premium on the markets these days.
Disclosure: The author has a long position in Aztec Minerals. Aztec Minerals is a banner sponsor of the website and covered the travel expenses for this site visit. This post is for educational purposes only; be mindful investing in junior mining stocks is risky and you may lose your entire investment if things go wrong. Please read our disclaimer.