REG - Phoenix Copper Ltd - Phoenix Publishes PFS for Empire Open-Pit Mine

Phoenix CopperAnnouncement

19/09/2024 07:00

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RNS Number : 7676E  Phoenix Copper Limited  19 September 2024

Phoenix Copper Limited / Ticker: PXC / Sector: Mining

19 September 2024

 

Phoenix Copper Limited

("Phoenix" or the "Company")

Phoenix Publishes Pre-Feasibility Study for Empire Open-Pit Mine

Phoenix Copper Ltd (AIM: PXC; OTCQX ADR: PXCLY), the AIM-quoted USA-focused
base and precious metals company, is pleased to announce that a complete
Pre-Feasibility Report ("PFS") for the proposed Empire Open-Pit copper, gold,
silver mine in Idaho, USA (the "Project") is now available on the Company's
website at http://phoenixcopperlimited.com (http://phoenixcopperlimited.com) .

Highlights

·    PFS pre-tax economics - discounted net present value at 7.5%
("NPV7.5") of US$87.86m, 46.4% Internal Rate of Return ("IRR"), US$152.98m
cumulative net free cashflow over an 8-year mine life and; total cash costs of
$2.44/copper ("Cu") equivalent pound ("lb");

·    Life of mine production of 40,424 metric tonnes ("mt") of copper,
40,161 ounces ("oz") of gold and 1.76 million oz of silver;

·    Newly designed flotation circuit capable of processing high-grade
sulphide ore, in addition to the open-pit oxide ore;

·    Sulphide exploration planning in final stages, with a view to mining
high grade sulphide material to augment the open-pit flotation feed; and

·    Recently purchased ball mills and additional equipment delivered to
site in Mackay, Idaho.

Ryan McDermott, Chief Executive Officer, commented: "I am pleased to announce
that the PFS for the Empire Mine has been completed and provides detailed
geological, engineering, metallurgical, and costing data for the proposed
open-pit operation.

"Following the publication of the Empire Mine mineral reserves statement on 7
May 2024 (Table 2), the Empire team engineered a crush-grind-flotation-tank
leach process design for the proposed open pit. The flotation circuit will
also be suitable for processing future polymetallic sulphide vein material
from below the open pit. The PFS shows Life-of-Mine production (payable) of
89,094,705 copper lbs (40,424 mt), 40,161 oz gold, and 1,759,717 oz silver .
The estimated operating and capital costs for the design mill, the open pit,
and ancillary operations are included in the PFS, which shows a pre-tax NPV7.5
of US$87.86 million, a 46.4% IRR, and US$152.98 million cumulative net free
cashflow over an 8-year open pit mine life. It is important to note that the
footprint of the processing facility will allow it to be situated nearer to
the open pit on patented mining claims, hopefully simplifying the plan of
operations and the permitting process in general.

"The Empire processing mill will produce a copper-gold-silver concentrate in
the flotation circuit and a separate cement copper stream from the leaching
circuit. As the flotation circuit will also be able to process sulphide ore,
the Empire team is currently finalizing a plan to advance the exploration of
the deeper sulphide vein system with an eye on augmenting the open pit ore
with feed from the higher-grade sulphide vein system below the pit. The
planning includes driving an adit toward known sulphide mineralization and
developing underground drilling stations along the length of the adit.  Known
sulphide mineralization includes the 8.38% copper interval intercepted in the
2021 core drilling program, which also assayed 1.31 grammes per tonne ("g/t")
gold and 120 g/t silver. Historically mined grades from the sulphide vein
system below the open pit were recorded as high as 8% copper, with smelter
recoveries of the time recorded as averaging 3.64% copper, 1.64 g/t gold, and
54 g/t silver. The advantage to underground mining and drilling is that it can
be conducted effectively in the wintertime without significant weather-related
impacts. Resources permitting, we hope to commence driving the adit this
winter.

"Using this PFS as the basis, we are now completing final detailed engineering
and the plan of operations for the open-pit mine. The Phoenix team will
continue to refine and optimize the operating and capital costing parameters
of the mine and processing facility, with the intent to further reduce those
costs where possible. Assuming we can augment the open-pit ore with high grade
sulphide material, this should further improve the Project economics.

"I would also like to report that the pre-owned ball mills purchased by the
Company in March 2024 have been delivered to our facility in Idaho.
Additional rolling stock and some fixed assets have been purchased, all
pre-owned, and are also at the Idaho facility. As we have previously reported,
it is the Company's intention to outfit the Empire Mine and milling operation
with used and pre-owned equipment to decrease the overall capex. The estimated
capex in the PFS for the Empire Mine is currently estimated at US$62.6
million.

"The PFS was prepared using the NI 43-101 format, but is not considered NI
43-101 compliant because used and pre-owned equipment pricing was used to
calculate capital expenditures. The Company is well-positioned to purchase
additional used equipment for the Empire Open-Pit operation and has selected
to incorporate used equipment pricing in its cashflow model, as opposed to NI
43-101's required new equipment pricing."

Summary of Economic Results

The economic analysis of the base case scenario for the Project uses metal
prices of $4.45/lb for copper, $2,325/oz for gold and $27.25/oz for silver,
being the approximate spot prices as of 15 April 2024. The economic model
shows a pre-tax NPV-7.5 of $87.86 million using a $22.59/tonne net smelter
royalty ("NSR") cut-off, as well as a pre-tax IRR of 46.4%. Table 1
 summarises the projected cashflow, NPV at varying rates, IRR, years of
positive cash flows to repay the negative cash flow ("Payback Period"),
multiple of positive cash flows compared to the maximum negative cash flow
("Payback Multiple") for the Project on both after-tax and before-tax bases.

Table 1

 Project Evaluation Overview    After Tax  Before Tax
 Cumulative Net Cashflow        $132.44    $152.98
 NPV @ 5.0%; (millions)         $89.55     $105.44
 NPV @ 7.5%; (millions)         $73.75     $87.86
 NPV @ 10.0%; (millions)        $60.71     $73.29
 Internal Rate of Return        40.2%      46.4%
 Payback Period                 1.66       1.41
 Payback Multiple               2.92       3.21
 Benefit Cost Ratio             7.61       8.87
 Initial Capital                $62.60     $62.60
 Max. Neg. Cashflow (millions)  -$69.09    -$69.09

 

Mineral Reserve Statement for Empire Mine

Table 2 - Fully diluted tonnes at a  NSR cut-off of $22.59/tonne

 Classification     Tonnes   Copper            Gold              Silver             Copper Equivalent
                    (x1000)  %     lb (x1000)  gpt   oz (x1000)  gpt    oz (x1000)  %       lbs (x1000)  tonnes
 Proven             7,515    0.49  81,070.56   0.38  90.9        14.42  3,483.70    0.68    111,995.19     50,814
 Probable           2,582    0.5   28,417.41   0.16  13.2        14.1   1,170.70    0.61    34,498.69       15,652
 Proven + Probable  10,097   0.49  109,487.97  0.32  104         14.34  4,654.40    0.66    146,493.89       66,467

 

The mineral reserves reported herein for the Empire project have been
estimated in a manner consistent with the NI 43-101 Committee of Mineral
Reserves International Reporting Standards ("CRIRSCO"), of which both
the Canadian Institute of Mining, Metallurgy and Petroleum ("CIM") and
Australasian Code for Reporting of Exploration Results, Mineral Resources and
Ore Reserves (the "JORC Code") are members.

Qualified Person

The foregoing technical information in this news release has been reviewed
and verified by Dennis Thomas, ACSM, FIMMM, FGS, CEng, Eurlng, co-founder
of Phoenix Copper Limited and Member of the Company's Advisory Board. Mr.
Thomas has held both executive and non-executive roles in a number of
international private and public natural resources companies and is a
chartered mining engineer from the Camborne School of Mines. He is a
Qualified Person under the AIM Rules and consents to the inclusion of the
information in the form and the context in which it appears.

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 to further 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. The Company has recently
published its inaugural Sustainability Report, which can be viewed on the
Company's website.

Market Abuse Regulation (MAR) Disclosure

The Company deems the information contained within this announcement 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
the Regulatory Information Service, this inside information is now considered
to be in the public domain.

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

 Phoenix Copper Limited                               Ryan McDermott                         Tel: +1 208 9547039

                                                      Paul de Gruchy                         Tel: +44 7484 203 720

                                                      Richard Wilkins                        Tel: +44 7590 216 657
 SP Angel Corporate Finance LLP (Nominated Adviser)   David Hignell / Caroline Rowe          Tel: +44 20 3470 0470
 Tavira Financial Limited (Joint Broker)              Jonathan Evans / Oliver Stansfield     Tel: +44 20 7100 5100
 Zeus Capital Limited (Joint Broker)                  Harry Ansell / Katy Mitchell           Tel: +44 20 7220 1666
 Panmure Liberum (UK) Limited (Joint Broker)          Mark Murphy / Kieron Hodgson           Tel: +44 20 7886 2500
 EAS Advisors (US Corporate Adviser)                  Matt Bonner / Rogier de la Rambelje    Tel: +1 (646) 495-2225
 BlytheRay                                            Tim Blythe / Megan Ray                 Tel: +44 20 7138 3204

 (Financial PR)

 

Notes

Phoenix Copper Limited is an emerging producer and exploration company
specialising in base and precious metals, with an initial focus on copper,
gold, and silver extraction from an open-pit mining operation within the
United States.

Located in the historic Alder Creek mining district near Mackay,
Idaho, Phoenix's flagship asset is the Empire Mine, in which the Company
holds an 80% ownership stake. The historic Empire underground mine, located
beneath the surface of the Company's proposed open pit, boasts a rich history
of producing high-grade copper, gold, silver, zinc, and tungsten.

Since 2017, Phoenix has executed extensive drilling initiatives, resulting
in an expansion of the Empire Open-Pit resource by over 200%. In May
2024 the Company published its inaugural mineral reserve statement for the
Empire Open-Pit Mine. Proven and Probable mineral reserves are 10.1 million
tonnes containing 109,487,970 lbs of copper, 104,000 oz of gold and 4,654,400
oz of silver. This reserve was estimated using assay data from 485 drill
holes, extensive geological modelling, metallurgical recovery test work,
geotechnical evaluation, and mine design. The reserve represents a combined
66,467 tonnes of copper equivalent metal.

In addition to the Empire Mine, Phoenix's holdings in the district also
encompass the Horseshoe, White Knob, and Blue Bird Mines, all of which have
been producers of copper, gold, silver, zinc, lead, and tungsten from
underground operations, a new high-grade silver and lead orebody at Red Star,
and the Navarre Creek gold exploration project, which was first drilled in
2023. The Company's land package at Empire spans 8,434 acres (34 sq km).

Phoenix also owns two cobalt properties situated along the Idaho Cobalt Belt
to the north of Empire. An Earn-In Agreement has been established concerning
one of these properties.

 Phoenix is listed on London's AIM (PXC), and trades on New York's OTCQX
Market (PXCLF and PXCLY (ADRs)). More details on the Company, its assets and
its objectives can be found on PXC's website
at  https://phoenixcopperlimited.com/
(https://nam11.safelinks.protection.outlook.com/?url=https%3A%2F%2Fphoenixcopperlimited.com%2F&data=05%7C02%7Cpaul.degruchy%40phoenixcopper.com%7Cd3c94638cd2a404fd97908dc4457be72%7C0ab43313efbd470e8b202b53ae10513d%7C0%7C0%7C638460390942473879%7CUnknown%7CTWFpbGZsb3d8eyJWIjoiMC4wLjAwMDAiLCJQIjoiV2luMzIiLCJBTiI6Ik1haWwiLCJXVCI6Mn0%3D%7C0%7C%7C%7C&sdata=zDJLf9dFwaNJhQmfkjPJtPnIxiqtCJb%2F1IuX1s1r7kQ%3D&reserved=0)

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