focusIR May 2024 Investor Webinar: Blue Whale, Kavango, Taseko Mines & CQS Natural Resources. Catch up with the webinar here.
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/
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.
jointhedots your report is very appropriate and shows why there are concerns. I would however like to offer an opinion. In my experience the Russians do not always involve themselves as "peacekeepers", but moreso as "protectors" of their geopolitical influence. They have seen Armenia drifting away from their sphere under this new PM, so it suits them very well indeed to see him under pressure. Meanwhile they are major arms suppliers to Azerbaijan, as well as Armenia, so they are onto a win-win if a simmering conflict endures. Lastly, you will remember that it was a Russian company (oligarch) who owned and mined the deposit on the border, and they are also there to protect his interests. I feel pretty sure that the oligarch will have Putin's ear, which AAZ surely do not have. We should not not underestimate the influence that Russia can have in this conflict, and it's not always as a peacekeeper.
Good evening 2Damen. Thank you for your sympathetic posts, and I mean just that. I hold my hand up, for the equity raise was larger than I expected. On 17th Feb I wrote :
"It is so obvious that the next major step will be finance for the project, and I guess they intend to do that with debt, if possible. I believe that a cash raise from us shareholders will be part of that, much like a deposit on a house, but I would expect this to be small compared to the size of the business, and I bet it will be the share price which will be the major beneficiary, since with finance in place the institutions will start to join us, not forgetting that this may well be the last call for cash ever. And once the institutions join in, there’ll be no looking back."
I got the size of the equity raise wrong. I was expecting the final tally of shares to be under 100 million, whilst we have ended up with over 1110 million. That was significantly more than I expected, and I apologise to all. However, I believe that I will be proved correct with the other points, now that we have cash in the bank, and that once the air is cleared with the present cash raise, there should indeed be nothing holding us back. I would expect to see our share price move up substantially. I was promised a succession of news in the coming weeks, so I guess there are other things happening. I believe that analysts reports should be amongst the news, and I would expect a substantial re-rate, plus I understood that the analysts reports may not be all that's happening.
I know that we have the potential for a very profitable business here, and we now have all the means to complete it. I remain confident that we will be very happy, and rich, shareholders come a year or 2....
I asked why they did not restrict the fund raise when the goal had been reached? They said that taking all the money offered, they felt we could advance the various programmes significantly by having more cash on board now. And this will advance all the different exploration programmes, and maybe bring some parts into fruition years earlier than previously expected. They are also in a much stronger position for cheaper finance, being able to offer a significant cash part, without impact on our exploration work. Even if we have to put up $10 million for the project we have it. We could see Red Star and Navarre Creek being explored this year, and maybe seeing Red Star in production next year or in 2023. The other issue raised by the directors was that in reality we were always going to end up with needing a similar sort of raise, and completing the raise in this way, we have accomplished this in one go. Now there won’t be the fear of the equity raise in the background. In short, on balance, they felt every pound raised today brought far greater value into the business.
All the board felt that this equity raise was on large balance hugely beneficial for the company and their own shareholdings (that’s important to note). It gives a clear line of sight to production, and to exploration for the wider opportunities. Although the RNS says for the foreseeable future, I heard from the board that they want to make this the last equity raise for cash ever.
I was told they will have funds available to invest in PR, and there will be a steady flow of information coming out the next few weeks. On PR I asked and was promised that we will have webinar the week of 15th March where this and other issues can be discussed.
To summarise, and bring in my opinions. Upon reflection yes, I was initially a little shocked by the amount of dilution, but now feel after due reflection that this is exceptionally good for the company. And whilst I did look on this initially as dilution, it should be regarded in reality as the next step up, and as the addition of substantial cash into the business, allowing PXC to progress smoothly from small explorer into potentially a lot larger scale developer and operator. Production is ever closer and more certain. This will build our company. Our market cap now goes above $50 million and with institutional investors we are on radar screens, and therefore highly visible. I have previously stated that my interest is in share price, for that is what translates into cash into my pocket, and our share price should now have a free ride up. I believe furthermore we are now completely secure for the future.
I am glad I took those 24 hours to investigate and reflect, and I’m happy to respond to any question.
When I read the RNS yesterday for the first time I was disappointed and perhaps a little shocked with the scale of the equity raise. I do talk often with members of the board, and whilst over the years we have talked of the need for cash, as you cannot finance a development project completely through debt, I was hoping that it would be on a smaller scale. I spent yesterday speaking with them, and reflecting, and what follows is a combination of both.
The first question I put was for clarity why do we need an equity raise at all. Why could we not finance 100% through debt? The answer was fast coming back, that PXC is a new company, without any production, with our only assets in the ground, and so we absolutely need to input some cash into the project to obtain finance. Next I asked about the scale of the raise, and why did it need to be so large. The answer I was given was that PXC needs the money for 2 purposes. First as our collateral for the debt, and secondly to advance our exploration programmes. Simply put for the second part, you cannot explore through debt. We would have had to hold back on exploration till we were producing from Empire which would have held us back for 2 years, pushing back the developments, and which would also have resulted in no news flow for that period.
There was agreement within the board that the share price could have been higher, but here we have an issue. We do not have large institutions on board, so we were at the mercy of traders and the Market Makers. It appeared that every time we had good news, our price was marked down. It was practically impossible to cross over the 45p line. I also guess it was because the market was expecting there to be a fund raise, and so many people were holding back.
To make a difference we really did need to recruit institutions on board, and move us away from these issues. Since most institutions are limited in that they can only invest in companies of value over $50 million equivalent, we had to ensure that the outcome from this raise was that coming out we had a higher value. The Board felt we needed to do something special to bring the institutions on board, so targeted £10 million. However, in so doing, they were offered it by some very significant institutional investors. I also understand that there is some substantial US involvement which is great news. Both of these create a step change. Why? With this fund raise we have crashed through the barrier, and are now on the radar of some large and important institutional investors, as well as being known in USA. And these boys are hungry, and when they get their appetite will be mopping up any loose shares.
I suspect the drop today was due to the Market Makers "shaking the tree". The price of gold may have also had an impact with many mining companies similarly impacted. Keep the faith, and just remember that this us a share for life and not for just a few days. It will always go up and down, but in the end it will go up, and up, and up.
Hi 2Damen, I suggest you relax a little more, and put your trust in the board. Have they let you down yet?
Most companies allow themselves, through a resolution at an AGM, the liberty of raising some money from an equity issue. Imagine that we found unexpectedly, that one of our seams continued beyond our owned territory. We would certainly want to buy it, and to wait for a General Meeting to gather the shareholders to raise those funds is plainly not reasonable. I believe that all companies have the right to raise some money through an equity issue, however, that power is limited, and therefore many companies put in place a resolution at an AGM to allow this to allow cash to be raised for instances like the above. In any case, I see no harm in an equity raise if it expands our potential value, for it is share price I am interested in, and if the company comes out bigger and better I am all for that, even if we do have more shareholders.
You should not confuse a company raising equity for survival, like many in this pandemic, and compare that with a venture seeking funds to expand, and increase the wealth of their shareholders, not that I know anything is happening in Phoenix.
I have today received my voting message from H-L, with the option to vote in favour, or do nothing. I am of course doing nothing, but I would rather have put my x against a rejection of this silly proposal.
Personally, I lived in 10 years in Kazakhstan, and at that time Kazakhmys (as it was known then) had a genuinely awful reputation, including in the expat community. Their reputation was one of bullying and getting results through political connections, rather than proper governance. I saw a change through the early 2010's, with a marked difference in corporate governance, and was really quite impressed with the result. I did think they had turned the corner. Then came this proposal, which I personally feel has taken them 10 steps back. I hope that the directors read this post, our posts, and see the feeling that they have, in my opinion, brought upon themselves. They had our support, our trust, and we feel frankly abandoned. That's what I feel, and I think many other posters here as well. When this vote fails, as I am sure it will, I hope they will comprehend the damage they have done, and will work to improve relations, rather than be sour and blame us. The British representatives on the BoD have a lot of work to do to repair the damage.
Good luck all! May the vote fail!!!!!!