04:53 PM EST, 12/02/2024 (MT Newswires) -- Arizona Metals ( AZMCF ) after trade Monday said it entered into an agreement with a syndicate of underwriters to sell 14.71-million shares priced at $1.70, to raise $25 million.

The company agreed to grant the underwriters an over-allotment option to purchase up to an additional 2.21-million shares, should demand warrant. If the option is exercised in full, an additional $3.75 million will be raised.

The company said it plans to use the proceeds to fund exploration at the company's Kay Mine Project and Sugarloaf Peak Property, both in Arizona, as well as for working capital and general corporate purposes.

The offering is scheduled to close on or about December 20.

Earlier Monday, Arizona released drill results from a new zone of mineralization called the Kay2 Zone at the Kay deposit in Arizona. Highlights of results include 20.1 meters at 3.6 grams per tonne (g/t) gold equivalent, including 1.4 meters at 7.9 g/t gold equivalent.

"A second significant intersection in the Kay2 Zone is very encouraging as we continue to test the extents of mineralization in and around the Kay deposit," said chief executive Duncan Middlemiss. "These recently drilled Kay2 holes will likely be included in our upcoming Mineral Resource Estimate which we plan to publish in H1 of 2025."

Separately, the company said it has decided to no longer pursue proposed spin-out transactions that were previously postponed in May.

Arizona Metals ( AZMCF ) had planned to seek shareholder approval for the spin-out of its Sugarloaf Peak gold project and a to-be-created net smelter return royalty on its Kay Mine project. Neither spin-out was voted on by shareholders or executed.

The company said it determined the proposed transactions were not in the best interest of the company.

Arizona Metals ( AZMCF ) shares closed was down $0.01 t0 $1.96 on the Toronto Stock Exchange.