Phoenix Copper. Regulatory News (PXC)

Phoenix Copper Limited / Ticker: PXC / Sector: Mining

27 February 2020

Phoenix Copper Limited (the "Company" or "Phoenix")

Equity subscription for £1.185 million at 15p per share

Loan note subscription for £354,000

Drilling programme to expand silver resources at Red Star

Phoenix Copper Limited (AIM: PXC; OTCQX: PXCLF), the AIM quoted North American focused base and precious metals exploration and development company, is pleased to announce that it has raised a total of US$2,000,000 (£1,539,000) (before expenses) by way of a subscription for new ordinary shares of no par value each ("Ordinary Shares") and the issue of unsecured loan notes (the "Fundraising").

Of the US$2,000,000, US$1,540,500 (£1,185,000) has been raised by way of a subscription for 7,900,000 Ordinary Shares at a price of 15 pence per share (the "New Shares"), and US$459,500 (£354,000) by way of an issue of 12 per cent unsecured loan notes, repayable on 30 September 2021. The Company will also grant a total of 450,000 warrants to the loan note holders which will be exercisable at 16 pence per share and valid until 31 July 2022 (the "Warrants"). The Warrants will not be listed or quoted on AIM.

The net proceeds of the Fundraising will be used to fund a drilling programme to expand the resources at the Company's Red Star silver deposit, which is adjacent to the proposed open pit copper mine at the Empire project in Idaho, USA. This programme will commence immediately. The funds will also provide the Company with additional working capital.

Ryan McDermott, Chief Executive Officer, commented:

"I am pleased to report on this Fundraising, particularly the equity portion which has been placed at a 50 per cent premium to our current market price. The New Shares have been placed with existing shareholders demonstrating their ongoing support of the Company and their belief in the underlying value of our assets. Certain Directors have also participated at the premium price.

"These funds will enable us to systematically drill the known vein system at Red Star and build onto the existing inferred silver resource reported in 2018. The planned drilling programme will target resource expansion, initial metallurgy and process engineering and development engineering.

"The Company understands the importance of putting shareholder money to work in the field and the Red Star work programme will be no different. We appreciate the continued support of our shareholders and look forward to announcing the next set of drilling results in due course."

Director Subscriptions

Certain Directors of the Company participated in the Fundraising, details of which are set out below:

Related Party Transaction

Marcus Edwards-Jones, Dennis Thomas and Roger Turner, as directors of the Company, are "related parties" pursuant to the AIM Rules for Companies. Accordingly, their participation in the Fundraising constitutes a related party transaction for the purposes of Rule 13 of the AIM Rules.

The directors independent of the transaction, being Ryan McDermott, Richard Wilkins, Andre Cohen, and Jason Riley, consider, having consulted with SP Angel Corporate Finance LLP ("SP Angel"), the Company's nominated adviser, that the terms and conditions of the above subscriptions are fair and reasonable insofar as the shareholders of the Company are concerned.

Details of the Fundraising

Application has been made for 7,900,000 New Shares, which will rank pari passu with the existing ordinary shares in the Company, to be admitted to trading on AIM ("Admission"). It is expected that Admission will become effective and dealings will commence on or around 8:00a.m. on 3 March 2020. 

Total Voting Rights

Following the issue of the New Shares, the issued share capital of the Company will consist of 52,684,881 Ordinary Shares. No shares will be held in treasury at the date of this announcement. The total current voting rights in the Company following the issue of the New Shares will therefore be 52,684,881.

The above total current voting rights number is the figure which may be used by shareholders as the denominator for the calculation by which they will determine if they are required to notify their interest in, or a change to, their interest in the Company.

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.

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.

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