Toronto, Ontario--(Newsfile Corp. - September 29, 2026) - Arizona Eagle Mining Corp. (TSXV: AZEM) (OTCQB: AZEMF) (the "Company" or "Arizona Eagle") is pleased to announce that it has engaged Hancon Mining Division USA Corp. ("Hancon"), pursuant to a pre-construction engineering agreement dated September 29, 2026 (the "Engineering Agreement"), to complete engineering design work for the reopening of the past-producing McCabe Mine to support underground drilling. The Engineering Agreement covers the initial engineering and assessment phase of the program only, and the balance of the work required to reopen the mine will be the subject of a separate agreement, as described below.
As announced on August 25, 2026, the Company completed its Phase 1 surface drill program (the "Phase 1 Drill Program") at the Eagle Project, which extended the mineralized strike beyond the area covered by the Historical Estimate (as defined below) and intersected zinc-silver mineralization to the northeast of the McCabe Mine. Upon completion of the Phase 1 Drill Program, management began an investigation in order to understand the most efficient method to get back underground, in order to reduce the drilling cost, and to improve the targeting of the known gold and silver zones. It has been determined that accessing the underground by the ventilation raise is expected to be the most cost-effective means, with an indicative budget of approximately US$3.7 million, subject to the results of the initial engineering work described below. The Company expects to be funded to complete this work.
Re-establishing the underground access will allow the Company to benefit from the substantial infrastructure already in place (which management estimates would cost approximately US$40 million, and two years of work, to replace). The AZEM team interviewed multiple leading mining contractors to perform the work, and as a result of this review, Hancon Mining was determined to be the preferred partner for the re-establishment of underground access and drilling. Once access is available, the Company expects to be able to drill approximately 5% of the metres required to reach the same target from surface. The cost per metre drilled is also budgeted to be significantly lower by drilling from underground. The Company believes that the drilling economics of the decision to go back underground are compelling.
This work is being advanced in parallel with the Company's ongoing surface exploration and target generation. As announced on August 25, 2026 and September 15, 2026, the Company has commissioned a detailed SkyTEM airborne geophysical survey, which is expected to assist in delineating mineralization types and refining targets for a Phase 2 drill program, and is compiling the results of that survey together with the results of the Phase 1 Drill Program and of the surface sampling programs completed on the Eagle Silver Zone and the Esmeralda Gold Zone. The targets generated from that work are expected to inform the underground drill program to be undertaken once access to the workings has been re-established.
The McCabe Mine has a historical estimate of approximately 880,000 ounces of gold at 11.7 grams per tonne ("g/t") and 5 million ounces of silver at 69 g/t (the "Historical Estimate")1 and was last in production during the 1980s. The McCabe Mine was accessed until 1993 from the 14-foot-diameter Sooner Shaft, which is concrete-lined and reaches a depth of 1,620 feet (approximately 500 metres). There are also at least five kilometres of underground drifts. Underground drilling has the potential to significantly reduce costs relative to drilling the same targets from surface, while also shortening the timeline to define a resource and test new targets of mineralization.
Under the Engineering Agreement, Hancon will complete the initial engineering and assessment work required to define the balance of the program including:
An onsite survey and the collection and testing of core samples of the concrete in the Sooner Shaft and the ventilation raise in order to confirm their condition;
Dewatering and pump testing of the shaft to a depth of approximately 300 feet in order to confirm water handling and discharge rates; and
Detailed engineering design and procurement planning for the Alimak raise-climber system that would be used to access, rehabilitate and dewater the balance of the underground workings.
This work is expected to commence on or about October 14, 2026. The total cost of the work under the Engineering Agreement is a maximum of US$391,344, inclusive of the Margin described under "Engineering Agreement and Share Consideration" below.
Following a comprehensive data review, site visit and desktop studies, Hancon has provided the Company with an indicative budget proposal of approximately US$3.7 million (payable in cash and shares as described below) for the work to be completed under the Engineering Agreement, as well as the balance of the program. This will include:
The full dewatering of the mine;
The rehabilitation of the ventilation raise;
Installation and operation of the Alimak system that will allow initial movement of people and equipment into the working areas;
Establishment of a timber manway and equipment chute compartments within the shaft to allow continued people and equipment access once the Alimak system has been removed; and
The development of underground access to the 830-foot level in order to bring the mine to drill-ready status at that depth.
This is anticipated to occur over approximately eight months and a Phase 1 underground drill program is targeted for the third quarter of 2027 on completion of that work.
Kevin Reid, Chief Executive Officer of Arizona Eagle, commented:
"We are extremely pleased to partner with Hancon Mining to reopen the McCabe Mine for underground drilling and exploration. Hancon is one of North America's premier underground mining contractors and has built and operated many mines similar to McCabe for some of the world's largest mining companies.
Getting underground at McCabe will allow us to drastically increase our drilling output while also reducing costs. Getting the drills underground and right up to the known historic mineralization can result in an up to 95% reduction in metres required, as compared to drilling the same targets from surface. It can also materially improve targeting. This is made possible by taking advantage of the extensive underground infrastructure put in place by previous operators. We estimate the replacement installation cost of the ventilation raise and the Sooner Shaft at the McCabe Mine to be at least US$40 million.
We are fully funded to re-access the underground workings and begin a Phase 1 underground drill program."
The indicative budget proposal is preliminary and remains subject to the results of the initial engineering work to be completed under the Engineering Agreement. The scope, budget and timing of the balance of the program will be confirmed on completion of that engineering work. The balance of the program is not covered by the Engineering Agreement and will be the subject of a separate agreement, which the Company expects to enter into following completion of the initial engineering work, subject to the approval of the Company's board of directors, and to announce in a subsequent news release. There can be no assurance that the Company will enter into that agreement or that the final cost of the balance of the program will not differ materially from the indicative budget proposal.
Engineering Agreement and Share Consideration
Under the Engineering Agreement, Hancon will be reimbursed in cash for the actual cost of the engineering design work, without markup, to a maximum of US$326,120. Hancon's profit on that work will be a further 20% of those verified costs, being up to US$65,224 (the "Margin"). The Company intends to satisfy the Margin in common shares of the Company (the "Common Shares") in order to preserve cash for the exploration and development of the Eagle Project, and may elect to pay all or any part of the Margin in cash.
No Common Shares will be issued in satisfaction of the Margin until the engineering design work has been completed and the related costs verified in accordance with the Engineering Agreement. Pursuant to the Engineering Agreement, the Margin will be converted into Canadian dollars at the Bank of Canada daily exchange rate and divided by the deemed price per Common Share to determine the number of Common Shares to be issued. The deemed price will be the greater of the 30-day volume-weighted average trading price of the Common Shares and the Discounted Market Price (as defined in the policies of the TSX Venture Exchange (the "TSXV")) at that time. The Common Shares are expected to be issued upon completion of the engineering design work under the Engineering Agreement, in the first quarter of 2027.
Hancon is at arm's length to the Company. Issuance of the Common Shares is subject to the acceptance of the TSXV and to a statutory hold period of four months and one day from the date of issuance.
Shaft and Vent Raise
In August 2026, the Company accessed the Sooner Shaft and, in early September, reopened it for the first time since 1993. The purpose of the work was to collect water samples from the shaft, which is currently flooded, in order to confirm that it is of suitable quality for discharge and pump testing. The work also allowed a preliminary examination of the shaft concrete and steel, which appear to be in very good condition. A camera was lowered down the shaft, encountered the water table at 140 feet and reached the shaft bottom at a depth of 1,620 feet (500 metres) without encountering any obstructions.
Figure 1. Sooner Shaft (14-foot diameter) reopened in September for water sampling and surveying by drone camera.
To view an enhanced version of this graphic, please visit:
https://images.newsfilecorp.com/files/10145/316500_fig1.jpg
Figure 2. Shaft concrete and rebar appear, on preliminary inspection, to be in excellent condition with little evidence of corrosion or erosion. The Company intends to take core samples of the shaft concrete to better define the condition and allow for refined rehabilitation estimates.
To view an enhanced version of this graphic, please visit:
https://images.newsfilecorp.com/files/10145/316500_64cb356de482aaad_003full.jpg
In early September, the Company also located and reopened the McCabe Mine ventilation raise, approximately 1,300 feet (400 metres) south of the Sooner Shaft. The raise was reopened, water was sampled, and a camera was lowered to a depth of 430 feet. The concrete appears to be in excellent condition, and no obstructions were encountered when lowering the camera probe.
On September 16, 2026, the Company hosted a site visit for Hancon's team of highly experienced engineers, who inspected both the Sooner Shaft and the ventilation raise at the McCabe Mine.
Figure 3. Kevin Reid, CEO (right) examining the recently reopened vent raise (located approximately 400 metres from the Sooner Shaft).
To view an enhanced version of this graphic, please visit:
https://images.newsfilecorp.com/files/10145/316500_fig3.jpg
Mine Dewatering
The Company has been in contact with the Arizona Department of Environmental Quality and has identified a number of locations that would allow for discharge pumping (dewatering of the shaft and mine) without any additional permitting requirements. Water testing has been completed and confirmed that the water quality is suitable for discharge and pump testing.
About Hancon Mining
Hancon Mining is a full-service underground mining contractor operating across Canada and the United States. Built by miners and driven by experience, Hancon specializes in mine and ramp development, underground construction, long-hole production drilling, Alimak raise mining, rehabilitation, and specialized underground services.
Hancon's current North American portfolio includes projects across Ontario and Idaho, supporting leading mining companies including Pan American Silver, Alamos Gold, Agnico Eagle, Discovery Silver, and Americas Gold and Silver.
With a growing North American workforce, Hancon remains focused on safe execution, strong partnerships, and treating every project as if its name is on the mine.
Eagle Project Overview
Arizona Eagle holds a 100% interest in the Eagle Project located in Yavapai County, Arizona. The Eagle Project is anchored by the past-producing gold and silver McCabe Mine, situated on 348 acres of private land. Stan West Mining historically invested more than US$35 million (approximately C$110 million in today's dollars) to drill and develop the mine. In 1984, Stan West Mining published the Historical Estimate of approximately 880,000 ounces of gold grading 11.7 g/t and 5 million ounces of silver grading 69 g/t, defined to a maximum depth of approximately 440 metres and open in all directions. See "Cautionary Note Regarding the Historical Estimate" below.
Over the past two years, Arizona Eagle has expanded its total land position to 4,169 acres through staking and acquisitions surrounding the McCabe Mine, including the acquisition of three high-grade past-producing silver mines that consolidate the Eagle Silver Zone. During this time, the Company completed exploration programs focused on geological mapping, surface sampling, helicopter-borne VTEM surveys and ground-based induced polarization surveys that identified multiple parallel mineralized structures not historically drill-tested.
Cautionary Note Regarding the Historical Estimate
The Historical Estimate is a historical estimate for the purposes of National Instrument 43-101 - Standards of Disclosure for Mineral Projects ("NI 43-101"). Its source is Knight, D.C., 1984, Stan West Mining Corp. McCabe-Iron King Belt project summary and financial information for shareholders, reporting a 1983 calculation by Derry, Michener, Booth & Wahl; there is no technical report on the Historical Estimate. Using the original terminology, it reported "Total Reserves" of 2,593,682 tons grading 0.34 ounces per ton ("opt") (11.7 g/t) gold and 2.0 opt (69 g/t) silver, containing 877,617 ounces of gold and 5,119,169 ounces of silver, in categories described as "Proven", "Probable - Drifting", "Probable - Drilling", "Possible" and "Geologically Inferred", the last of which accounted for approximately 700,000 of the contained gold ounces. It was prepared at an assumed gold price of US$360 per ounce and covered approximately 750 to 800 metres of strike to a maximum depth of approximately 440 metres; other key assumptions, parameters and methods, including cut-off grades, are not known to the Company. The historical categories are not the mineral resource and mineral reserve categories set out in NI 43-101 and the CIM Definition Standards on Mineral Resources and Mineral Reserves (the "CIM Definition Standards"). "Geologically Inferred" is most closely comparable to an Inferred Mineral Resource and "Possible" to an Indicated to Inferred level of confidence, while the "Proven" and "Probable" categories, which are not supported by any pre-feasibility or feasibility study, are more comparable to Measured and Indicated Mineral Resources than to mineral reserves under the CIM Definition Standards. The categories were also aggregated into a single "Total Reserves" figure, which would not be permitted for a current estimate.
The Company considers the Historical Estimate relevant because it covers the McCabe deposit, the principal past-producing mine on the Eagle Project, and reflects a substantial body of historical drilling and underground development. Because the Historical Estimate predates NI 43-101 and the CIM Definition Standards, is not supported by a technical report and has not been verified by a Qualified Person, the Company regards it as an indication of the historical work completed at McCabe rather than as a measure of the quantity or grade of mineralization, and it should not be relied upon. Historical production at the McCabe Mine was at grades materially below those reported in the Historical Estimate. The Company is also aware of more recent historical estimates prepared for the McCabe deposit in 1989 and 1993, each of which was limited to material near the then-existing underground workings, was substantially smaller in scope than the Historical Estimate, and is likewise not compliant with the CIM Definition Standards or NI 43-101. Verifying or upgrading the Historical Estimate as current mineral resources or current mineral reserves would require significant work including but not limited to compilation and validation of the historical drilling, sampling and assay data, additional drilling, re-sampling and re-assaying under modern quality assurance and quality control protocols, geological and grade modelling and the establishment of cut-off grades and other economic parameters, with no certainty of success. A Qualified Person has not done sufficient work to classify the Historical Estimate or those more recent estimates as current mineral resources or current mineral reserves, the Company is not treating any of them as current mineral resources or current mineral reserves, the Historical Estimate is not being and may not be used in any economic analysis, and investors are cautioned not to rely on it.
About Arizona Eagle Mining Corp.
Arizona Eagle is a mineral exploration company focused on the acquisition, exploration and development of mineral properties. Arizona Eagle's principal asset is the Eagle Project, a 4,169-acre property comprising patented and unpatented claims located near the town of Prescott Valley in Yavapai County, Arizona. The Eagle Project is centered on the past-producing McCabe Mine, a high-grade gold-silver deposit, and includes multiple parallel structures hosting past-producing mines that remain largely untested by modern drilling. While Arizona Eagle's primary focus will be on the exploration and development of the Eagle Project, it will continue to own its legacy land portfolio in the Thompson Nickel Belt of northern Manitoba.
The scientific and technical information contained in this news release has been reviewed and approved by Clyde Smith, PhD, Vice-President, Exploration of the Company, who is a Qualified Person as defined under NI 43-101. Mr. Smith has also reviewed and approved the disclosure in this news release regarding the Historical Estimate; he has not, however, performed the work necessary to verify or upgrade the Historical Estimate as current mineral resources or current mineral reserves.
Cautionary Statement Regarding Forward-Looking Statements
This news release contains forward-looking statements and forward-looking information (collectively, "forward-looking statements") within the meaning of applicable securities laws. Any statements that are contained in this news release that are not statements of historical fact may be deemed to be forward-looking statements. Forward-looking statements are often identified by terms such as "may", "should", "anticipate", "will", "estimates", "believes", "intends", "expects" and similar expressions which are intended to identify forward-looking statements. More particularly and without limitation, this news release contains forward-looking statements, including statements concerning the engineering design work to be completed by Hancon under the Engineering Agreement and its expected cost and timing, the indicative budget proposal provided by Hancon and the scope, cost and timing of the balance of the program, the Company's expectation that access by way of the ventilation raise will be the most cost-effective method of re-establishing underground access, the Company's estimate of the cost and time required to replace the existing underground infrastructure, the expected reduction in metres and cost per metre of drilling from underground relative to drilling from surface, the sufficiency of the Company's funding for the program, the Company's entry into a separate agreement with Hancon in respect of that work, the reopening of the McCabe Mine and the timing of a Phase 1 underground drill program, the anticipated benefits of underground drilling relative to drilling from surface, the issuance of Common Shares in satisfaction of the Margin and the receipt of TSXV acceptance, and the Company's exploration and development plans for the Eagle Project. Statements concerning the Historical Estimate may also be deemed to constitute forward-looking information to the extent that they involve estimates of the mineralization that would be encountered if the Eagle Project were developed. Forward-looking statements are inherently uncertain, and actual performance may be affected by a number of material factors, assumptions and expectations, many of which are beyond the control of the Company, including expectations and assumptions concerning the Company's ability to execute on its planned programs at the Eagle Project, the timely receipt of all required regulatory approvals, including the approval of the TSXV, the Historical Estimate and historical information prepared by prior operators of the Eagle Project, commodity price fluctuations, the availability of financing on acceptable terms, environmental and permitting risks, and risks inherent in mineral exploration and development. Readers are cautioned that assumptions used in the preparation of any forward-looking statements may prove to be incorrect. Events or circumstances may cause actual results to differ materially from those predicted as a result of numerous known and unknown risks, uncertainties and other factors, many of which are beyond the control of the Company. Readers are further cautioned not to place undue reliance on any forward-looking statements, as such information, although considered reasonable by management of the Company at the time of preparation, may prove to be incorrect and actual results may differ materially from those anticipated. The forward-looking statements contained in this news release are made as of the date of this news release and are expressly qualified by the foregoing cautionary statement. Except as expressly required by securities law, the Company does not undertake any obligation to update publicly or to revise any of the included forward-looking statements, whether as a result of new information, future events or otherwise.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this news release. No stock exchange, securities commission or other regulatory authority has approved or disapproved the information contained herein.
1 The Historical Estimate is a historical estimate for the purposes of National Instrument 43-101 - Standards of Disclosure for Mineral Projects. It is not current, is not being treated by the Company as current mineral resources or current mineral reserves, and should not be relied upon. A Qualified Person has not done sufficient work to classify the Historical Estimate as current mineral resources or current mineral reserves. See "Cautionary Note Regarding the Historical Estimate" in this news release for the source, date, relevance, reliability, known assumptions and parameters, category comparison and required verification work.
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