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I agree, Trek, all interests are aligned.
The options extension is clearly due to the team being in possession of Feasibility Study info, which in turn should support the bond issue, as well as the bond process itself.
The Feasibility Study was scheduled for Q2, and it was earlier indicated that this could be end of May. It can’t be far away now.
One area I’m slightly disappointed in is with the current drilling at Empire. Other than a single photo on Twitter there’s been no coverage from the company. They’ve been really good at social media lately, but for something as “crowd pleasing” as a drilling campaign it would have been good to get more build-up to it.
There’s a few of us that follow it closely, but even I’m in the dark on whether we’re drilling oxides or sulphides, how long it will take, expectation of results, objectives of the drilling etc.
In these turbulent times it would be good to remind the market what a solid proposition we are. Even Paul de Gruchy has been quiet on the drilling front, and as the new company voice this would have provided a great platform.
There’s confirmation on Telegram that the summer drilling program is underway at Empire.
There’s been a few previous tweets showing the drill pad being constructed, but great news to now know the drill is turning.
Empire, then Red Star. It’s going to be an exciting few months.
There’s no clarification needed on the ExGen ownership on my part, RightOn.
Although it’s good to hear that the expectation is that ExGen are not expected to contribute, and therefore dilute their share of Empire. That is a very valuable 20% we would gain.
My question was more around where their 20% share of the start-up capital would go.
As a basic example, PXC has stated they want to raise “a minimum of” $60m, so ExGen’s full contribution would be an additional $12m.
Would the $12m just sit in the bank unallocated to start-up, or do the Company envisage needing $72m and therefore in the event of ExGen not contributing their 20% share, need to increase the debt amount to the $72m amount?
I guess the (B)FS will clarify the amount needed for the mine start-up, and this should be released imminently. Based on previous comments I’m guessing we will see it next week.
Thanks, RightOn.
From your last line, do you mean that the company is not expecting ExGen to meet their 20% commitment, and would dilute?
The RNS announced that a "minimum of $60m" would be raised, so I made the assumption that it could be more, and this was in order to cover the shortfall left if ExGen choose to dilute or are unable to raise their share?
I would be delighted if they do, as 100% of Empire is orders of magnatude more valuable than covering ExGen's share.
If I understand the situation properly, the finance requirement would be a min of $60m, but could require $72m based on the contribution from ExGen.
ExGen are required to contribute their 20% share upon the completion of the Bankable Feasibility Study, or dilute their holding accordingly.
The BFS was scheduled for release Q2 (verbally suggested to be "end of may or early June"), so this should hopefully be published within the next week or two.
Upon such, ExGen contribute, or we require to raise additional funds, but would then own up to 100% of Empire, depending on what ExGen can / do contribute.
What I am unsure of though is the contract / terms state "Bankable Feasibility Study", but ina recent post form either POF or DP (can't remember who it was) it was suggested that due to Covid and the rapid changing of costs of goods and services, this would not be released as a BFS, rather just a FS.
Would this mean it is not in line with the terms of the agreement with ExGen?
Either way, (B)FS is close, and will indicate how ridiculously profitable the company would be at current metal prices, for such a mimimal start-up cost. Finance will then shortly follow (I'm guessing they are also waiting for the study to be published and reviewed before signing off), and as you have seen on Twitter we are now gearing up for summer drilling.
Sit back and enjoy the show. It should be a fun summer.
StanUK.
I think this is one of the key strengths of PXC.
It’s still under the radar of many (hopefully Paul de Gruchy can change this!), and there is a large percentage of PI shareholders with significant holdings (250k+ shares).
With a small number of shares in issue and most holders just sitting tight, once the good news starts to roll in we should move up quickly (Conversely, a small number of sell does create the drop we have seen again recently).
The ducks are indeed lining up nicely. June should be an exciting month and there is likely to be significant updates all summer, hopefully culminating in a permit by year end.
As you say, Trek, sub-70p is bargain territory, but if the summer drilling reveals even part of what we expect to be there (and finance is signed), 70p should be a distant memory.
I understand that Phoenix will be presenting here next week:
https://melloevents.com/mello2022/
Hopefully we can get some positive coverage and investor interest there ahead of (or after!) the release of the Feasibility study.
Further to the below message, and while I’m grateful for RightOn’s information, if the company wishes to be seen as a mature explorer-developer I don’t think these off the record chats and back-channel postings are the best way for info to be given.
If they have something positive to say, say it to the market directly. The info in RO’s posts are positive, but this could have been an official post from Paul De Gruchy, or maybe a webcast update like we’ve had in the past. This can then reach a wider audience.
I appreciate RightOn’s history with the company and relationship he has with the directors, but to that end it doesn’t seem professional for this info to come from mates.
It also has less impact when the discussion was seen as “very positive”.
Ryan, Paul, or Richard could easily have put out a short video with an update on finance, which could have balanced out the slight negative of “no rush finance” statements made previously.
RightOn, I do appreciate the updates, but it’s time for the company to be more mature about where the information to the market comes from.
Thanks, RO.
I think we all still believe in the non-dilutive finance, and indeed that the permit is proceeding as hoped (mostly because it’s waiting on the revisions).
It’s the timelines that most people here are interested in. I’m sure that the “no rush to sign off on financing” that has led to some of our price drop recently.
Finance sign-off is a major milestone, and one that we are all keen to see implemented ASAP.
StanUK.
It’s a bit frustrating to see this back down at 44-45p level. It was 65p just 4 weeks ago, and there’s nothing to justify losing 20p of value.
I’m guessing people are expecting the next news to be the Feasibility study, and know that it won’t be until the end of the month, so putting money to work elsewhere?
This should be much higher. Let’s hope the next few news releases propel us back to where it should realistically be.
I agree. Most investors are now just sitting and waiting. Like you guys, I’ve built up a sizeable position and now happy to watch the plan play out over the next few years.
Feasibility study within 4 weeks, finance likely to follow that, drilling at Red Star, and the permit all to come. Once this is de-risked from a financial perspective the price won’t stay around these levels for long.
I'm sure you meant £46m, Bankrupty! But yes, it is a drop in the ocean agaisnt the estimated revenues ahead.
The new Feasability Study should give us a much clearer insight into the payback, although with the Board setting this up as a 10 year loan, I think they have a plan to fast track Red Star into production, and maybe start to capitalise on the Cobalt, too.
So long as the terms are reasonable (loan % or Smelter royalty), I'd be happy carrying the debt and moving the other properties into production (or at least M&I) sooner.
Richard has talked about spinning Navarre into another company, and if we get decent assays over the summer that could potentially happy quickly, too.
If the loan terms are fair, putting the revenues to work early is fine by me.
Hi Skyumpie,
Based on last weeks RNS I think it’s a fair assumption to expect financing news next. The original finance deal on the table would likely have concluded by now, so the timing depends on what the other two banks offer. Either way, I’d expect this to be finalised by the start of March.
That then takes us towards Q2 and the feasibility Study being released.
Following those two events, take your pick from permitting, NC drilling commencement (and associated results), sulphide drilling, or any number of left-field JV’s, or staking extensions.
Either way, yes, I see 50p as the bottom too. I’m surprised that we’ve even found ourselves hanging around these levels with the imminent financing.
Just a postulation, but we know that financing would be transformational, and likely propel the share price to £1+, possibly £1.50 on decent terms with no dilution.
What if someone like Rio Tinto came in now with a $500m (£2.85) offer for the whole portfolio?
It seems a leap to pay 5x premium on today’s price, but far less of a premium once we are fully funded.
Is it such a leap? I’d say they would be getting a bargain for such a price.
I know that many of us see value far higher than that (£5-7 in maybe 4 years), but a more than reasonable offer for the entire assets, including the Cobalt, Silver, Navarre Gold, and the Sulphides?
I think there’s a reason that we have Henry Kenyon Slaney on the advisory board…
Is it better for a big dog to make the move now, before we get financially set up, and thus a higher company value?
Hi EnglishPatient.
I don’t understand the “losing patience” line.
The only thing that’s delayed is the Navarre surveys. The plan is, and for a long time has been, to begin mining at the end of this year. That gives almost 11 months to get a number of ducks in line.
Richard Wilkins has suggested finance should be sorted by the summer (May at the very earliest), and the permit on Empire is following the natural review process, and has 6 months to run on the consultation period.
I’ll reiterate, Empire is still on track based on the Company’s stated timelines.
As for the share price, Phoenix isn’t the only one getting battered right now. US Fed rates, 10k Russian troops on the Ukrainian border, Boris troubles, all contribute to a nervousness in the markets. Everything from Tech, Mining and Crypto has took a beating lately.
Phoenix is as solid as when you first invested. Now isn’t the time to wobble, and it can easily rise as fast as it has fallen.
A great resource, a great board, and the right time and place. Give it a month and everything should hopefully look very different.
I don’t quite understand where the grey cloud has come from over the last few weeks.
Nothing has changed with the company, nothing has changed with the metals outlook, and nothing has been announced regarding the project(s).
I guess the price went up to 80p too fast, and has dropped back today without much reasoning too, and I agree that it’s hard to put a value on the company right now while we sit and wait, but there’s nothing to cause concern with the investment.
Phoenix is not a get rich quick share. It’s a medium / long term play where value could be in the billions. We just need to hold tight, wait for the assays, the finance, and (hopefully) the permits, and then congratulate ourselves on being magnificent investors.
Not nice to see a drop in price, but it’s just background noise if you believe in the journey we are on.
I agree, Westway. Finance should be easy once permitting is approved. This should also be the trigger for a major share price re-rate.
I'm not sure any more assurances can be given other than what is in the public domain.
The Baseline studies indicated no material impact on wildlife (https://www.investegate.co.uk/phoenix-copper-ltd/rns/completion-of-environmental-studies-at-empire-mine/202002120700056844C/),
and every step is being taken to mitigate other environmental impacts (https://phoenixcopperlimited.com/ESG-Environmental-Responsibility).
From a community perspective, Phoenix is well-supported in the local community, despite a few negative voices (which generally are louder than those that support the project). Ryan and the team are engaging with the local community to minimise the impact of the project, and are holding a number of Town Hall meetings to attempt to allay fears. There will always be some people who will be against this no matter what is said, but I am confident that these objections will not impede the timeline or project in any material way.
This is now just a waiting game while the permitting process follows the natural course of review and consultation.
Hi Richard08,
No thoughts needed, only facts!
The $52m has not been raised. Phoenix has stated that there’s no need to raise it yet as the bulk of the funds would not be needed until later into this year. Once the Plan Of Operation is in place and approved the Company will then finalise the debt financing.
Richard Wilkins has indicated that this should be around May time.
Advanced discussions have taken place with a number of possible suitors, and as M.E.J said in a recent webinar, “financing no longer keeps me awake at night…”
I’d also be happy with the GeoMag survey arriving as an early Christmas present. It’s long overdue now, and could give us a nice boost going into the New Year.
Admittedly it’s not the best environment for good news to land, but we do seem to have lost some of the positivity and momentum that should have been generated over the summer period.