Phoenix Copper. Share News (PXC)

(Sharecast News) - North America-focussed base and precious metals producer Phoenix Copper has drawn down on a £2m debt facility, it announced on Monday, to accelerate development of the Empire Mine open pit copper project in Idaho.

The AIM-traded firm said the facility had a nine month term, was unsecured and paid interest at an annual rate of 8%.

"On 16 February we announced the results of our updated economic model on the Empire Mine open pit copper project," said chief financial officer Richard Wilkins, noting that the open pit contained measured and indicated resources of some $1.4bn, with the base case economic model generating net revenue of almost $800m and an EBITDA of more than $300m over an initial 10-year project life, at a copper price of $3.60 per pound.

"The pre-production capital expenditure is expected to be paid off in under two years, with over $40m of free cash generated in the first year of operations.

"The facility will allow the company to accelerate project development whilst we work on the final project financing package, which will be primarily debt related, and will be used to repay the facility."

Wilkins said the next objective was to submit the project plan of operations to the relevant authorities as soon as possible, so that the company could start the final stages of construction permitting.

"We consider that the terms of the Facility demonstrate a strong vote of confidence in our operations, and we look forward to becoming a copper-led US mining operation, delivering copper into the US electrification programme on a timely basis."

At 1440 GMT, shares in Phoenix Copper were down 1.15% at 38.55p.