REG - Phoenix Copper Ltd - Acquisition of additional Empire Mine royalty

Phoenix CopperAnnouncement

11/01/2022 07:05

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RNS Number : 9900X  Phoenix Copper Limited  11 January 2022

Phoenix Copper Limited / Ticker: PXC / Sector: Mining

 

11 January 2022

Phoenix Copper Limited

("Phoenix" or the "Company")

 

Acquisition of additional Empire Mine production royalty

Appointment of Joint Broker

 

Phoenix Copper Ltd (AIM: PXC; OTCQX: PXCLF; OTCQX ADR: PXCLY), the AIM quoted
USA focused base and precious metals emerging producer and exploration
company, is pleased to announce that it has entered into a further agreement
with Honolulu Copper Corporation ("Honolulu") to acquire the remainder of the
2.5% net smelter royalty ("NSR") payable on future production from the Empire
Mine property, which includes the Empire Mine Oxide open-pit, the Red Star
silver - lead project, and the historically mined sulphide deposit below the
open pit, in Idaho, USA.

 

Pursuant to the terms of the agreement, Phoenix has acquired the remaining
1.25% of the 2.5% Honolulu NSR for an additional payment of $450,000.  As
reported by the Company on 27 October 2021, the Company purchased an initial
1.25% of the Honolulu NSR, and all of Honolulu's patented and unpatented
mining claims, as well as 1% of the 2.5% NSR payable to Mackay LLC ("Mackay")
for a total consideration of $1.3 million, $800,000 of which has been paid
with $500,000 payable in two further installments of $250,000 each, due on 31
December 2022 and 31 December 2023 respectively.

 

Following the acquisition of the NSR, Konnex Resources Inc, the Company's 80%
owned Idaho registered subsidiary and operator of the Empire Mine ("Konnex"),
will pay a 2.5% NSR to Phoenix from future production originating on the
former Honolulu claim block, and a 1.5% NSR to Mackay plus a 1% NSR to Phoenix
from future production originating on the Mackay claim block, based on the
order in which the respective claim blocks are mined.

 

 

Richard Wilkins, Chief Financial Officer of Phoenix Copper, commented: "Our
preliminary economic model for the Empire open pit mine, which is based on a
$3.60 copper price, forecasts gross revenue of $836 million over an initial
10-year project life. The entirety of the Honolulu 2.5% NSR now payable to
Phoenix, plus the 1% NSR purchased from Mackay LLC, should therefore represent
significant additional revenue to Phoenix over the same period and is intended
to contribute additional funds to the corporate dividend policy which we plan
to adopt for the benefit of our shareholders in due course."

 

Appointment of Joint Broker

The Company is also pleased to announce that it has appointed Tavira
Securities Limited ("Tavira") to act as joint broker with effect from 1
January 2022. Tavira has recruited senior personnel from the Company's
previous joint broker, Brandon Hill Capital Limited ("Brandon Hill"), and
accordingly both Brandon Hill and the Company have terminated their
relationship from that date and by mutual consent.

 

 

Environmental, Social and Corporate Governance

Phoenix is committed to meeting and exceeding the environmental standards
required by law as a core value of the Company. The baseline environmental
data collected to date will be used for furthering the permitting process, but
as importantly, will be used as the building blocks for the Company's ongoing
Environmental, Social, and Corporate Governance ("ESG") platform, overseen by
the Company's ESG & Sustainability Committee.

 

Market Abuse Regulation (MAR) Disclosure

The information contained within this announcement is deemed by the Company to
constitute inside information as stipulated under the Market Abuse Regulations
(EU) No. 596/2014 which has been incorporated into UK law by the European
Union (Withdrawal) Act 2018. Upon the publication of this announcement via
Regulatory Information Service, this inside information is now considered to
be in the public domain.

 

Contacts

For further information please visit https://phoenixcopperlimited.com
(https://phoenixcopperlimited.com)  or contact:

 Phoenix Copper Limited                              Ryan McDermott                                Tel: +1 208 954 7039

                                                     Dennis Thomas                                 Tel: +44 7827 290 849

                                                     Richard Wilkins                               Tel: +44 7590 216 657
 SP Angel Corporate Finance LLP (Nominated Adviser)  David Hignell / Caroline Rowe                 Tel: +44 20 3470 0470
 Tavira Securities Limited (Joint Broker)            Jonathan Evans / Oliver Stansfield            Tel: +44 20 7100 5100

 WH Ireland (Joint Broker)                           Harry Ansell / Adam Pollock / Katy Mitchell   Tel: +44 207 2201666
 Panmure Gordon (UK) Limited (Joint Broker)          John Prior / Hugh Rich / Ailsa Macmaster      Tel: +44 20 7886 2500
 EAS Advisors (US Corporate Adviser)                 Matt Bonner / Rogier de la Rambelje           Tel: +1 (646) 495-2225
 Blytheweigh                                         Tim Blythe / Megan Ray                        Tel: +44 20 7138 3204

(Financial PR)

 

 

 

 

Notes

Phoenix Copper Limited is a USA focused, base and precious metals emerging
producer and exploration company, initially targeting copper and zinc
production from an open pit mine from late 2022.

Phoenix's primary operations are focused near Mackay, Idaho in the Alder
Creek mining district, at the 80% owned Empire Mine property, which
historically produced copper at grades of up to 8%, as well as gold, silver,
zinc and tungsten, from an underground mine.

Since 2017, Phoenix has carried our extensive drill programmes which have
defined a NI 43-101 compliant PEA (preliminary economic assessment) for an
open pit heap leach solvent extraction and electrowinning ("SX-EW") mine,
which was updated in October 2020. The contained metal in all NI 43-101
compliant categories of resources, measured, indicated and inferred, stand at
129,641 tonnes of copper, 355,523 ounces of gold, 10,133,772 ounces of silver
and 58,440 tonnes of zinc. Phoenix updated its economic model in February
2021 to include the processing of all contained metals through a two phased
approach.

In addition to Empire, the district includes the historic Horseshoe, White
Knob and Blue Bird Mines, past producers of copper, gold, silver, zinc, lead
and tungsten from underground mines. A new discovery at Red Star, 330 metres
northwest of the Empire Mine proposed open pit, has revealed high grade
silver / lead sulphide ore and from three shallow exploration drill holes a
maiden resource of 103,000 tonnes containing 173.4 g/tonne silver, 0.85
g/tonne gold and 3.85% lead (1.6 million ounces silver equivalent) was
reported in an NI 43-101 technical report published in May 2019. Additionally,
the district includes Navarre Creek, a volcanic hosted precious metals
target in a 14.48 sq km area. The Company's total land package at Empire
comprises 8,034 acres (32.51 sq kms).

At Empire, it is estimated that less than 1% of the potential ore system has
been explored to date and, accordingly, there is significant opportunity to
increase the resource through phased exploration. The stated aim of the
Company is to fund this phased exploration through free cashflow generated by
its initial mine. A Plan of Operations in respect of the initial open pit mine
was filed with the relevant regulatory authorities in June 2021.

Phoenix also has two wholly owned cobalt properties on the Idaho Cobalt Belt
to the north of Empire. An Earn-In Agreement has been signed with Electra
Battery Materials Corporation (formerly First Cobalt Corporation), Toronto, in
respect of one of those properties.

More details on the Company, its assets and its objectives can be found on
PXC's website at https://phoenixcopperlimited.com.

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