Phoenix Copper makes progress with exploration at Red Star

(Sharecast News) - North America-focussed base and precious metals exploration and development company Phoenix Copper announced the results of ongoing exploration at its Red Star silver deposit on Thursday, adjacent to its Empire copper deposit in Idaho.
The AIM-traded firm said the sampling programme highlights included that the Red Star vein was now measured along 320 metres, and was open at both ends.

It said surface sampling results returned similar values to those from the outcrop that formed the current maiden NI 43-101 resource.

Two additional veins had been exposed to the south east, and all of the new vein exposures were situated on the patented Empire property.

Phoenix Copper said the results would now be used to identify further drill targets.

The objective was to continue to update the Red Star Resource in preparation for construction and production, which was expected in 2021.

"We are pleased with the latest Red Star results which indicate an open-ended extension to the Red Star vein of 320 metres," said chief executive officer Ryan McDermott.

"Additionally, during the fourth quarter drill road-building work, two additional veins were identified.

"These new veins are particularly exciting as they may be indicative of a much larger, multi-vein shear zone."

McDermott said that during 2020, the company was planning to complete a drilling programme on Red Star to generate a measured and indicated resource sufficient to justify a small underground 'adit' mine, with a flotation process plant to produce lead-silver, copper-gold and zinc concentrates.

He said the scale of operations would be in the region of 450 tonnes of ore per day, or 155,000 tonnes each year.

"The Red Star discovery is a primary high-grade silver/lead sulphide vein and has, after drilling only three holes, generated a maiden NI 43-101 compliant resource of 103,500 tonnes, containing half a million ounces of silver or a silver equivalent resource of 1.6 million ounces when gold, lead, copper and zinc values are included.

"The value of the contained metal in the NI 43-101 Red Star resource is $260 per tonne of ore at today's metal prices, or $40.3m a year at a production rate of 155,000 tonnes of ore a year.

"Capital costs are anticipated to be in the region of $30m."

McDermott explained that, while the company's focus would be on production from Red Star, expected in 2021, it would also be evaluating alternatives for the Empire Mine's open pit copper project in an attempt to improve on the revenue, operating and capital cost estimates.

He said the completion of the feasibility study for that project would be accelerated in a more attractive copper price environment.

"My predecessor, Dennis Thomas, has pointed out many times that the polymetallic nature of the Empire System is largely untapped and barely exploited or explored.

"These latest results are certainly consistent with this view."

At 1604 GMT, shares in Phoenix Copper were down 4.76% at 10p.