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Analyst Note
By Éric Lemieux, MSc, P.Geo
Mining & Exploration Analytics
eric.lemieux@peartreesecurities.com
March 24, 2015
Azimut Exploration Inc. (AZM-V)
Azimut not that active – But applying the partnership model: waiting for clearer skies…
Event: Azimut announced a corporate strategic update on 2014-2015 activities.
Impact: Neutral. Azimut says it is a leading explorer in Northern Québec, but we highlight that it has conducted
minimal exploration activities in the last year. However Azimut remains well positioned for when general market
sentiment turns favorable.
Analysis
• On March 19, 2015, Azimut provided a strategic update on the company’s activities. Recall that Azimut's
core business is founded on its expertise to process large multi-source databases to generate high-quality
exploration targets while focusing on selected major mineral deposit types. We highlight Azimut’s relatively tight
share structure (40.8 M shares FD) with 44% held by insiders and institutional shareholders.
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analysis herein reflect the views of the Analyst as at the date appearing above, and are subject to change without notice. The information contained in this document is
derived from sources we deem to be reliable, but cannot be guaranteed. PearTree Securities Inc. (“PT Securities”) and/or its affiliates and/or any of their respective
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implementation of the recommendations contained herein. PT Securities is registered as an Exempt Market Dealer. PT Securities is a subsidiary of PearTree Financial
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remuneration, participate in the financing of companies mentioned in this document. Peartree and members of their families may hold positions in the companies
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• Azimut has strategic land holdings within the Éléonore gold sector of the James Bay as well as along
a 330-km polymetallic copper-gold-tungsten mineral belt in Nunavik. Azimut currently has partnership
agreements in the James Bay with Goldcorp on the i) Wabamisk project (51% Goldcorp Inc (G-T), 49% Azimut),
ii) Éléonore South project (36.8% Goldcorp, 36.8% Eastmain Resources (ER-T), 26.4% Azimut) and iii) with
Hecla Mining (previously Aurizon, HL-NYSE) and Everton Resources on the Opinaca B project. We infer that
Hecla has abandoned its option on the Opinaca A project (50% Azimut, 50% Everton JV). Azimut holds also
100% of the Opinaca D and Eastmain West (PGE’s, chromium and nickel) projects. Notably Azimut also owns a
large land position in Nunavik with over 12,000 claims initially acquired via of its proprietary data-base target
selection scanning vast parts of Quebec for the most favourable sectors for potential precious metal and REE
mineralization (see Exhibit 1). Azimut has delineated the Rex Trend with anomalous copper-gold-tungsten and
rare earth with 7,630 prospecting samples, 21,400 line-km of airborne geophysics, 6,226 infill lake-bottom
sediment geochemical samples and 7,070m of rotary drilling. Azimut, with $1.6M of working capital on hand,
does not probably have the financial capacity to advance these northern projects by itself in summer 2015
because of the significant challenges to explore in the north with short field seasons and high exploration costs.
On the Opinaca B property, a $320,000 exploration program has been confirmed by Hecla. In 2014, Hecla
completed nearly 2,317m of diamond drilling (9 holes) on Opinaca A and spent a total of $0.85M on exploration
work on the Opinaca A and B properties. On the Wabamisk property, data processing and compilation work is
underway for 2015 and Goldcorp funded $0.271M of works in 2014. We understand that in regards to the current
exploration downturn, Azimut is actively considering new opportunities that should fit with its business strategy.
Azimut with its strategic land holdings within the Éléonore gold sector and within certain mineral belts of the
Nunavik; should be able to re-bounce.
• We continue to believe that Azimut is a quality project generator, but consider that it has certain
challenges in maximizing its proprietary targeting methodology. Since 2003, Azimut has concluded nearly
30 strategic and option agreements with junior and senior companies, however only 3 remain. Also since 2003,
$50.2M has been invested in exploration work by the Azimut’s partners, and $16.9M by Azimut itself well
maintaining a stellar capital structure (no consolidation). We believe Azimut shall have to secure more
partnerships in order to advance its portfolio of projects and we would appreciate to see Azimut remain active on
the exploration front and maximize its application of the prospector-generator model. We highlight that Azimut's
strategy of active project generation requires securing new partnerships. However we understand that
negotiations are on-going with potential partners and agreements could hopefully materialize in 2015. Azimut
says it is one of the leading explorer in Northern Québec, we hope that 2016 may see for Azimut increased
visibility as it pursues, with its partners and potential future partners, exploration programs.
• Finally we highlight that we are attending the Swiss Mining Institute (SMI) conference in Geneva,
Zurich and London (http://www.swissmininginstitute.ch/) on March 24, 25 and 26, 2015 and note that the
following companies are presenting: Balmoral Resources Ltd. (BAR-T), Great Panther Silver Ltd. (GPR-T),
Integra Gold Corp. (ICG-V), MAG Silver Corp. (MAG-T), Pilot Gold Inc. (PLG-T), Pure Gold Mining Inc. (PGM-V)
and Treasury Metals Inc. (TML-T). Keynote speakers are Egon von Greyerz, Founder and Managing Partner
Matterhorn Asset Management AG and Alain Corbani, Head of Commodities, Portfolio Manager at Finance SA.
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