Member Info for RightOn

Is everyone asleep? Have you noticed something this morning? We went to bed with 63 million shares and a market capital of £21 million, and have woken up with 116 million shares, and a market cap of £38 million, and the share price has not moved (downwards anyway). At a market cap of £38 million, and with £16 million in the bank, ready to finance our adventure, I think we've woken up to a very strong, even formidable, position.

I’ve just attended the general meeting. Here are my notes. The two resolutions were both passed overwhelmingly, each with more than 99% of the vote. The open offer was 15% oversubscribed, and so applications will be scaled back (with the comment, maybe those people would like to buy on the open market?).

I asked out of interest how much has opening up the offer to the smaller investors cost the company, and what do they feel have been the benefits. They responded that the cost was approximately £50-55,000, including all costs, but it raised an extra £1.9 million. The board felt it was right to extend this offer to smaller shareholders, particularly as they are intent this maybe being the last fund raise. They felt that with the uptake the open offer had been very successful, and a very worthwhile exercise, with broad uptake across the shareholder base.

The BoD were asked about the institutional investors, and we were told that any in excess of 3% will be divulged shortly. But the BoD are very pleased with the new institutions brought on board, and there will indeed be 1 or 2 who will have to divulge. There was also participation from USA.

Hi British Mike. I am sorry, for the issue is with me for the shareholders webinar. I agreed with the company to help set this up, and they then realised that they were moving into closed period, with the publication of their annual accounts, when they are not allowed to have meetings of this nature. I meant to publish this, but forgot. The shareholders webinar was therefore delayed by a couple of weeks, and should be in early April. My apologies again. I'll let you know when it will take place.

After my post this morning of the Trafigura information on future copper prices, I asked the company what the new copper prices would mean for the model. Here is what they responded:

“This is a good question, seeing as they sold over 10% of world copper consumption last year. Please note these are illustrative numbers rather than forecasts.

Trafigura aims for US$15,000/t copper: Head of copper trading at Trafigura is looking for copper to hit a US$15,000/t peak in the current cycle driven by the green energy transition. While Trafigura expects copper to surpass the US$10,000/t mark this year mainly driven by continued Covid logistical supply disruptions, it also expects copper to trade in the US$12,000-15,000/t range in the coming decade driven by increased demand. Already Trafigura has noted a Q1 2021 increase in European copper demand of 5%, even before Europe comes out of Covid lockdowns. Trafigura sold 4.4mt of copper in 2020.

Keying in these numbers to the PEA model gives the following post-tax NPV (7.5%) and IRR for the Empire open pit project:

At $10,000 a tonne/$4.53 a lb: $170m & 91%
At $12,000 a tonne/$5.44 a lb: $250m & 134%
At $15,000 a tonne/$6.80 a lb: $370m & 200%"

"Trafigura expects the metal to breach $10,000 a tonne this year, before entering a range of $12,000 to $15,000 a tonne over the coming decade. " See https://www.mining.com/web/trafigura-sees-green-copper-supercycle-driving-prices-to-15000/

I don't need to say more than that...

Remember that it is the market makers who set the price, not the company, or even the market. And my guess is that we are seeing the work of market makers here. Their money comes from trades, and they earn nothing on the open offer. Their only revenue comes from the trading of shares, and if everyone is buying through the open offer, then of course it is in their interest to see the price drop. But as a self fulfilling prophesy, if we were to buy through the market, the price should shoot up, for there would not be enough available shares.

Only existing shareholders can apply for the excess. My guess is that there is and will be little buying till this share offer is done and dusted. Just look at the way the MM's are setting the pricing.

2Damen, the offer is only open to existing shareholders, allowing purchase on a 1 for 10 basis. It is at 35p, so if you paid 36p, you have been done!

Three key points to this RNS. First, this company would not be going and recruiting someone of this stature if they were not sure that these projects were going ahead. This sends a very strong signal of confidence to the market. We would only recruit someone of this reputation and quality if we were sure we needed him.

Second. Would a man of this calibre be joining Phoenix if he was not aware of our resources and our plans? He had to be sure that this was no idle flash in the pan, and that the basics were sound, particularly the forthcoming and very significant obvious one. Finance.

Third I looked him up on Linked In. What a fantastic asset he is for us! What a catch! Here’s his profile:
“Zachary has a Bachelor of Science degree in Geological Engineering, and has a wealth of project experience in geological exploration, geologic modelling, mineral resource estimation, and database management and design. Zach has conducted professionally recognized, innovative work in geo-statistical modelling, and routinely provides his expertise to the mineral industry with regard to geologic modelling, geo-statistical evaluation, mineral resource estimation, and exploration program design and support. Mr. Black is also recognized as a Qualified Person on a variety of technical reports. Zach has demonstrated effective leadership skills while completing projects across North and South America, Europe, and Asia within various industries including mining, construction and transportation.”.

If you read this Zach, welcome, indeed a very large welcome, for your arrival brings more hope than meets the eye.

Hi sipptrader. No, anything within the Empire mine area is included within the 20% ownership, and that includes Navarre Creek. I believe that the 20% owner may not have the ability to provide the financing for his share of the project, so you may be correct, that his share will eventually dwindle to zero. And that's for the whole territory, and not just Red Star. I am not sure how that works for royalty payments, if any.

My understanding is that we get on very well with the 20% owner, so everything will be managed in a friendly fashion.

Well done yourself sipptrader. A few corrections/comments:
Point 1) Red Star comes within the Empire area, and is therefore 80% owned. The Cobalt deposits are outside, and are 100% owned.
Point 5) We should be producing metals for 10 years in the economic model (gold/silver after 2), but the mine will not stop then. The 10 years was selected for the basis of the model.
We did have options in Canada, but dropped those to focus on Idaho. I think a good move.

I like your logic for future pricing, and who am I to disagree? But whatever, we have to agree, today's share price is silly, and is a serious undervaluation. I am prepared to bet our sp will soar after the open offer closes, when we have involved institutions and American investors. These will move us up a level.

All sourced from Phoenix RNS issues, and other published information.

Now my opinion. The BoD have a wonderful clear vision, with the Empire Open Mine project starting up and ultimately providing the revenue go after the massive resources deep below, which are possibly on a world scale. Almost any part of this business could be a company on its own, but as a whole, and in this planned structured approach, early shareholders should be in for bumper returns. This is a very complete project, presently severely undervalued.

Twelve reasons why I love Phoenix (It used to be ten, but more reasons keep arriving):
1. The business is located in a favourable jurisdiction, Idaho USA. In the February 2021 issued Fraser Institute Annual Survey of Mining Companies, Idaho came top of perceived low risk with a 10/10 for policy factors that affect investment decisions
2. Phoenix have a very experienced team, able to manage a complex ore body, so they can easily take advantage of market changes. They also have a solid plan for how to achieve production.
3. The site has no environmental problems, and no legacy issues.
4. They have two quality targets for near term production. The open pit Empire mine, for copper and gold, and Red Star for silver and lead. With these polymetallic deposits we can also switch focus according to market needs.
5. There is additionally excellent potential for gold in Navarre creek, a Carlin style mineralisation, plus claims in the Cobalt belt at Big Horn and Redcastle. These are all good projects in their own right.
6. The value of metal in the ground at the Empire open pit alone, as a confirmed M & I resource, is over $1.4 billion. That’s ridiculous for such a small market cap company.
7. Research by WH Ireland from early 2020 shows unrisked the fair value target would rise to 140p/sh. These values ignore the surrounding mineralisations, increased prices of the metals, and advanced nature of the Empire mine project.
8. “Commodity risk is low” “Sovereign risk is low”, “Market Risk is low”, “Operating Risk are low-moderate”, “Project execution Risk is low”, “Permitting risk is low”
9. Phoenix is very competently navigating the process from explorer to developer to producer. They have stated that finance discussions are under way, and they plan to have production from the Empire mine open pit project before end 2022.
10. Phoenix is also potentially sitting on a huge mineralised system, and their consultant geologist has stated that they have explored less than 1% of the potential resources to date. This system could be worth many billions of dollars.
11. With Biden’s arrival, “The Clean Energy Revolution” is going to prioritise the development of a mine on US soil, producing those very necessary in-demand metals, like copper, cobalt, etc.
12. Phoenix have now raised additional equity to allow them to progress financing of their projects, and to allow expanded early exploration to proceed, bringing forward all the other projects

All sourced from Phoenix RNS issues, and other published information.

Now my opinion. The BoD have a wonderful clear vision, with the Empire Open Mine project starting up and ultimately providing the revenue go after the massive resources deep below, which are possibly on a world scale. Almost any part of this business could be a company on its own, but as a whole, and in this planned structured approach, early shareholders should be in for bumper returns. This is a very complete project, presently seve

My apologies, for I missed that question. The process to remove the copper and zinc is bulk standard. The environmentally friendly process with thiosulphate (ATS) rather than cyanide to remove the gold/silver is not as well known, but is not new. To balance that, it is being used in the largest open pit mine in the world (in Uzbekistan), as well as in Barrick Gold at its Goldstrike plant in Nevada (this is the mine on the Carlin Trend, much like we have in Navarre Creek). From what I have seen the economics look broadly similar. You need less expensive (environmental protection) equipment with the ATS rather than cyanide, but the processing is slightly more complex, so it may come out all square in terms of capital cost. In terms of operating costs, I believe that the ATS costs less, but you use more of it, and again not too far apart. But the big winner is in the permitting process, with much, much less time required for approval, plus there's the benefit of our reputation, for using ATS we can claim a massive environmental benefit.

For your interest, there's one article about the use at Barrick on hTTps://im-mining.com/2015/07/03/csirobarrick-prove-thiosulphate-alternative-to-cyanide-commercially/

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https://t . m e/j o i n c h a t/I5hNdxg-LUTkNvtljGWq1A

https://**************I5hNdxg-LUTkNvtljGWq1A

The stars are lining up. Hallgarten came up with the story of how copper prices have been driven largely by the Chinese over recent years (see that from page 20 of their Research), but that period may be coming to an end. In an article in Mining.com (link below), the mention of a potential Chinese strategic metals reserve is quite radical, and bears out what the Hallgarten note was saying about the gradual weakening of Chinese ability to drive the copper price down on the LME. That could signal the strengthening of copper prices to levels way above our dreams!
https://www.mining.com/web/copper-prices-to-hit-record-high-in-next-12-months-chinas-maike-says/

Sipptrader suggested we listen to a talk by Pierre Lassonde, on Kitco. Thank you sipptrader, what an excellent find.

First for Pierre himself. This man is a character, and extremely well known in the industry. He served as President of Newmont Mining, and headed up Franco-Nevada when it became the largest mining IPO ever offered on the TSE. Today it is worth more than US$25 billion. What did he say?

He goes through the recent market, and highlights that he feels that gold ended its correction cycle, and is now due for a rise.

But the key moment for me is 20 minutes in. He says that to find the best mining deposit in the world look for copper/gold. If you find one of them you are in Nirvana. Copper is the metal of the future, and will be so for 40-50 years. We will need copper. Our entire civilisation rests on copper. We need copper for communication. We need copper for transportation. For gold this is the metal to own. If you were an investor today, what would you do to make yourself more attractive as a junior investor? 90% of value is created by the drill bit. The bottom line is finding the lowest cost of an ounce of gold.

And everything he said is what we have in Phoenix!!

Well worth a listen, if only to that section above. Thank you sipptrader.

And here is the view from the Moscow Times, which tends to present an independent and educated view of the situation in the ex-Soviet Block countries:

hTTps://www.themoscowtimes.com/2021/03/02/the-politics-of-defeat-how-will-the-crisis-in-armenia-end-a73117

The key line for me is "while Pashinyan might not be popular, his rivals are even less so. One of the main reasons for this is the opposition’s inability to offer a fundamentally different political course."

So it appears that whilst there are warmonger elements within Armenia, the regime in power appears to be looking at the moment towards the longer term and an increase in prosperity rather than war.

Hi British_Mike, I forget where I saw or heard this now, but yes, they do intend paying a dividend very shortly after revenues start. If I remember the saga correctly, the company (Phoenix Copper Limited Ltd) have been treating their investment into the operation in Idaho as a loan to the operating subsidiary Konnex (80% owned). They intend paying back the recovery of the loan as a dividend. The annual accounts are due soon, and we should be able to see it there. I believe that operating dividends will then follow as well.