Phoenix Copper. Regulatory News (PXC)

Phoenix Copper Limited / Ticker: PXC / Sector: Mining 

29 June 2020

Phoenix Copper Limited

("Phoenix" or the "Company")

Empire Mine gold recoveries exceed 97% using environmentally friendly reagent

Phoenix Copper Ltd (AIM: PXC, OTCQX: PXCLF), the AIM quoted North American focused base and precious metals company, is pleased to announce the results of the initial metallurgical test work for the recovery of precious metals occurring in the Empire Mine deposit. The detailed metallurgical report can be found at www.phoenixcopperlimited.com/research.

Highlights

· Precious metals tests performed on samples from the Empire open pit deposit using non-toxic ammonium thiosulfate ("ATS") reagent resulted in high gold recoveries of 97.8% and 97.7%, and silver recoveries of 69.8% and 78.2%, respectively

· ATS reagent consumption comparable to sodium cyanide in back-to-back bench scale tests

· This development presents the opportunity to bring forward precious metals production as there would no longer be the requirement to permit a cyanide operation

· Pilot scale test plant now being prepared at the laboratory in Salt Lake City before commencing small scale pilot testing at Empire

· RC drill rig mobilised for extensional drilling of the gold and silver zones at Empire with the intent of adding additional gold and silver to the open pit resource

· Diamond drilling programme at the Red Star silver-lead deposit well underway

Ryan McDermott, Chief Executive Officer, commented: "As part of the ongoing work programme at the Empire Mine open pit, a 400-pound metallurgical sample with a head-grade of 12.8 g/ton gold was collected from surficial outcrops near a known channel sample location that assayed 36 g/ton gold, and submitted for precious metal recovery testing at AuRIC Laboratories in Salt Lake City, Utah ("AuRIC"). AuRIC was instructed to test non-cyanide leaching reagents to determine how precious metal recoveries would compare to sodium cyanide.

 I am pleased to announce that the initial test results show that the non-cyanide reagent ammonium thiosulfate performed equally as well as sodium cyanide in both precious metal recovery and reagent consumption. Multiple lab and bench-scale tests were performed on -80 mesh samples, with the larger volume bench scale tests recovering more than 97% gold and more than 67% silver after 4 hours of leaching, with ATS consumption of approximately 4%.

In May this year, we published an updated resource for the Empire Mine, which included a 56% increase in gold ounces and a 13% increase in silver ounces from the previous May 2019 resource estimate. We had anticipated that the precious metal ounces associated with the Empire oxide-copper would be processed using cyanide leach at sometime after the primary copper leaching due mostly to the time frame necessary for permitting a sodium cyanide operation. That may very well have changed with the receipt of these latest metallurgical results.

The use of ATS, which is much less industrially utilized in the US, but is praised for its non-toxic, environmental friendly, and low cost when compared to sodium cyanide, would allow us to time the processing of the Empire precious metals in parallel with the base metals given that we do not need to enter into a lengthy permitting process for the cyanide operation. This would present a clear advantage in a market with rising gold and silver prices, and bring forward the timing of precious metal production which will make the project far more robust economically. The testing and use of sodium cyanide alternatives is consistent with our ESG philosophies and we will continue to work toward the most environmentally responsible practices possible.

The next step for the Phoenix team will be the preparation of a pilot scale test plant sited in the AuRIC Laboratory in Salt Lake City and scaled to run multiple tonnage leach samples from various locations around the Empire open pit deposit using the ATS reagent. The laboratory pilot testing will be followed by pilot scale testing on the project site over the coming months.

Finally, Phoenix has also mobilized a reverse-circulation drill rig that is currently drilling extensions to the existing gold and silver resources with the intent of adding additional resource, as well as upgrading the inferred tonnes to the measured and indicated categories. As we have stated in the past, the evaluation of the Empire deposit continues to move forward. The recent resource upgrade and the recent initial metallurgical test results will steer the focus as we move forward.

At the Red Star silver-lead deposit HQ-diamond drilling is now well underway. A complete Red Star project update will be provided in the next couple of weeks."

Empire Mine - Gold and Silver Resource and Metallurgical Recovery

In May 2020, an updated NI43-101 compliant resource was completed by Hardrock Consulting (HRC) and reported for the polymetallic Empire Mine open-pit oxide deposit. The updated resource contained measured, indicated, and inferred metal content of 130,000 tonnes of copper, 342,000 ounces of gold, 9.5 million ounces of silver and 50,550 tonnes of zinc. The May resource showed an increase in all metals, but particularly gold and silver, which increased 56% and 13%, respectively, from the previous May 2019 resource. Resource report details can be found on the Company's website at www.phoenixcopperlimited.com/news and www.phoenixcopperlimited.com/research.

As part of the Company's ongoing Empire Mine work programme, samples amounting to 400 pounds were collected from outcrops near the location of channel samples analysed in 2018. The head-grade of the 400-pound sample assayed at 12.8 g/ton gold. The sample was submitted to AuRIC Metallurgical Laboratories in Salt Lake City, Utah for cyanide-alternative laboratory and bench scale agitated-tank leach testing.

AuRIC performed 4 laboratory scale amenability tests and 2 bench scale extraction tests using sodium cyanide lixiviant, and 4 laboratory scale amenability tests and 2 bench scale extraction tests using the non-toxic ammonium thiosulfate lixiviant, on splits from the primary sample. The results of this test work indicate that ATS works equally as well as sodium cyanide on both the laboratory scale samples (30g to 250g) and the bench scale samples (3,000g). Gold recovery using ATS on the 2 bench samples resulted in 97.8% and 97.7%, and silver recovery was 69.8% and 78.2% after 6 hours of leaching. ATS reagent consumption for both tests was 4.32% and 4.42%, respectively. Tables 1 and 2 show the results of ATS 6-hour leach testing.

By comparison, the sodium cyanide gold recoveries on splits of the same sample were 97.8% and 97.7%, and silver recoveries of 68.1% and 65.5% following 6 hours of leach time. The sodium cyanide reagent consumption for both tests was 6.00%. A detailed laboratory report titled "Laboratory and Bench Scale Metallurgical Extraction Tests Performed Using Sodium Cyanide and Ammonium Thiosulfate Leaches on a Composite Sample of Magnetite Ore from the Empire Mine, Custer CO, ID" can be viewed on the Company's website at www.phoenixcopperlimited.com/research.

Table 1 - 3,000-gram Bench Scale Test Results using Ammonium Thiosulfate - Run 1

Table 2 - 3,000-gram Bench Scale Test Results using Ammonium Thiosulfate - Run 2

Qualified Person

The information in this announcement has been reviewed by Roger Turner A.C.S.M., M.Sc., M.I.M.M.M., C.Eng., Chief Technical Officer and Director of the Company. Mr Turner is a graduate mining engineer from the Camborne School of Mines with an MSc in Economic Geology from Leicester University with more than 40 years' experience in mine development, construction and operation and is a qualified person under the AIM Rules. Mr Turner consents to the inclusion of the information in the form and context in which they appear.

Environmental, Social, and Corporate Governance

Phoenix is committed to meeting and exceeding the environmental standards required by law as a core value of the Company. The baseline environmental data collected to date will be used for furthering the permitting process, but as importantly, will be used as the building blocks for the Company's future Environmental, Social, and Corporate Governance (ESG) platform.

Market Abuse Regulation (MAR) Disclosure

Certain information contained in this announcement would have been deemed inside information for the purposes of Article 7 of Regulation (EU) No 596/2014 until the release of this announcement.

Contacts

For further information please visit www.phoenixcopperlimited.com or contact:

Notes

Phoenix Copper Limited is a North American focused, base and precious metal explorer and developer, which has carried out a drilling programme and generated a copper, gold, silver and zinc resource on which it is carrying out a feasibility study to bring the historically producing Empire Mine in Idaho, USA, back into production. It is also evaluating the silver and gold resources around three other past producing mines within the 23 km2 Empire claims block as well as cobalt in two claims blocks north of Empire in Idaho.

Phoenix's primary operations are focused near Mackay, Idaho in the Alder Creek mining district. This district includes the historical Empire, Horseshoe, White Knob and Blue Bird Mines, past producers of copper, gold, silver, zinc, lead and tungsten from underground mines in the first half of the twentieth century. Additionally, the district includes Navarre Creek a Carlin-trend gold discovery which hosts a 6.1 km gold strike length within a 9.8 km² area.

Phoenix acquired an 80% interest in the historical Empire Mine property in 2017 and, based on a total of 320 drill holes, an oxide resource was completed in late 2017. A NI 43-101 compliant PEA (preliminary economic assessment) for an open pit heap leach solvent extraction and electrowinning ("SX-EW") mine was completed in April 2018. In 2018 a further 8,600 metres in 93 holes was completed to upgrade the oxide resources, provide samples for ongoing metallurgical test work, geotechnical and hydrological studies and condemnation drilling for the heap leach pad site, waste dump and plant site.

An updated NI 43-101 compliant resource was completed in early May 2019, which was generated for a heap leach copper SX/EW operation where only copper was recovered. A further updated NI 43-101 compliant resource was generated in May 2020 for all metals, which resulted in an increase of measured and indicated resources of +56% gold, +11% copper, +13% silver and +26% zinc. Present contained metal in all NI 43-101 compliant categories of resources, measured, indicated and inferred, stand at 343,249 ounces of gold, 129,923 tonnes of copper, 9,502,494 ounces of silver and 50,550 tonnes of zinc.

Since acquiring the Empire project, Phoenix has increased the claim area from 818 acres to 5,717 acres, mainly to the northwest and west, and in so doing has increased the potential for additional oxide and sulphide copper resources, as well as the potential for stand-alone gold and silver resources, along a strike length of approximately 5.4 km towards the other brownfield mines of the Horseshoe, White Knob and Blue Bird Mines now within the property boundary. In particular, a new discovery at Red Star, 330 metres north west of the Empire Mine proposed open pit, has revealed sulphide ore and from three shallow exploration drill holes a NI 43-101 compliant maiden resource of 1.6 million silver equivalent ounces was reported.

At Empire, it is estimated that less than 1% of the potential ore system has been explored to date and, accordingly, there is significant opportunity to increase the resource through phased exploration.

More details on the Company, its assets and its objectives can be found on PXC's website at www.phoenixcopperlimited.com.