Last checked at 29 May 2018 07:00
Phoenix Global Mining Ltd / Ticker: AIM:PGM / Sector: Mining
29 May 2018
Phoenix Global Mining Ltd ('Phoenix' or the 'Company')
Oversubscribed Placing and Subscription to raise £3 million
Appointment of Joint Broker
Phoenix Global Mining Ltd (LSE AIM: PGM), the AIM quoted, North American-focused base and precious metals exploration and development company, is pleased to announce that it has raised an aggregate of £3m (before expenses) by way of an oversubscribed placing and subscription of 85,714,286 new ordinary shares of nil par value each ("New Shares") at a price of 3.5 pence per New Share (the "Fundraising", "Issue Price"). The Fundraising comprises a placing of 50,071,428 New Shares ("Placing Shares"), and a subscription of 35,642,858 New Shares ("Subscription Shares").
The bulk of the proceeds will be used to further advance the Company's flagship asset, the historically producing Empire Mine in Idaho, United States. As previously announced, the Company completed and announced the results of its Preliminary Economic Assessment on the Empire Mine in April 2018. Building on the results of this successful study, the funds raised will be deployed to advance the open-pit project towards a Bankable Feasibility Study and further optimise the development scenario and in turn the NPV of the project. At Empire the funds will be deployed on an extensive drilling programme - drilling has already commenced for the current campaign with one reverse circulation drill and one diamond drill. Two additional RC drills and one additional diamond drill are scheduled to start work in June 2018. As soon as the new assays have been received from this drilling campaign a new resource estimate will be completed. In addition, the Company will undertake further metallurgical testwork, process and mine designs, infrastructure designs and environmental studies over the course of the coming months.
The balance of the funds will be used to carry out further work on the Company's recently acquired cobalt properties and for general working capital.
Dennis Thomas, the Company's CEO, said: "I am pleased to report on the successful completion of our oversubscribed fundraising. Our BFS programme at the Empire Mine open pit is already underway and this financing puts the Company in a strong position, with minimal further dilution, to concentrate on the completion of a successful BFS next year and also to focus on construction financing for the operation. The ongoing drill programme will look to expand the resource and also to reclassify some of the existing independently audited resource figures into measured and indicated. Accordingly the Company expects to be in a position to provide regular updates to shareholders over the summer on its drill programme and subsequent results.
In addition, given the considerable demand experienced during the marketing of this financing, the Board elected to increase the size of the issue by 20% to enable additional exploration work to be carried out at our Bighorn and Redcastle cobalt exploration properties. We have seen significant interest of late in both the commodity and the asset, evidenced by the recent acquisition of US Cobalt, owner of the adjacent Iron Creek project, by First Cobalt for a price of circa $149M and we look forward to updating the market during our inaugural exploration program."
Details of the Fundraising
Application will be made for 40 million Placing Shares ("First Placing 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 4 June 2018.
The issue of the remaining 10,071,428 Placing Shares, and the Subscription Shares, is subject to the approval of shareholders of a resolution to authorise the allotment of equity securities at the Annual General Meeting which is scheduled to take place on 11 June.
Related Party Transaction
Following this announcement, the directors of the Company intend to subscribe for a total of 1,565,714 New Shares at the Issue Price ("Director Subscriptions"). The Director Subscriptions will settle as part of the Subscription Shares. Details are as follows:
Director | No of ordinary shares held as at the date of this announcement | No of New Shares to be subscribed | No of ordinary shares held immediately following the Subscription | % of enlarged share capital following the Placing and Subscription |
Marcus Edwards-Jones | 3,155,886 | 571,429 | 3,727,315 | 1.2% |
Roger Turner | 11,150,000 | 285,714 | 11,435,714 | 3.6% |
Dennis Thomas | 10,701,870 | 285,714 | 10,987,584 | 3.5% |
Richard Wilkins | 6,074,963 | 230,000 | 6,304,963 | 2.0% |
Andre Cohen | 1,656,669 | 150,000 | 1,806,669 | 0.6% |
Jason Riley | - | 42,857 | 42,857 | 0.01% |
Ryan McDermott, CEO of Konnex Resource Inc and General Manager of the Empire Mine, also intends to subscribe for 215,000 New Shares, following which his holding will be 1,802,778 ordinary shares, being 0.6% of the enlarged share capital following the Placing and Subscription.
The directors of the Company are related parties to Phoenix, as defined in the AIM Rules for Companies. Ryan McDermott is also considered a related party to Phoenix. His and the Director Subscriptions are therefore related party transactions for the purposes of Rule 13 of the AIM Rules.
As all of the directors are participating in the Fundraising, there are no Directors deemed to be independent of the Fundraising. Accordingly, SP Angel Corporate Finance LLP ("SP Angel"), the Company's nominated adviser, considers that the terms and conditions of the above subscriptions are fair and reasonable insofar as the shareholders of the Company are concerned.
Total Voting Rights
Following the issue of the First Placing Shares, the issued share capital of the Company will consist of 272,286,473 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 First Placing Shares will therefore be 272,286,473.
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.
Appointment as Joint Broker
The Company is pleased to announce the appointment of SP Angel, who are the Company's nominated adviser, as the Company's Joint Broker alongside Brandon Hill.
Issue of Warrants
The Company has also agreed to issue an aggregate of 2,250,714 warrants to Brandon Hill and SP Angel for services in connection with the Placing. The warrants are exercisable at a price of 3.5 pence at any time until 30 June 2020.
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.
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**ENDS**
For further information please visit www.pgmining.com or contact:
Phoenix Global Mining Ltd | Dennis Thomas / Richard Wilkins | Tel: +44 7827 290 849 (Dennis) / +44 7590 216 657 (Richard)
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SP Angel (Nominated Adviser and Joint Broker
| Lindsay Mair / Caroline Rowe | Tel: +44 20 3470 0470 |
Brandon Hill Capital (Joint Broker) | Jonathan Evans / Oliver Stansfield | Tel: +44 20 3463 5000 |
Notes
Phoenix Global Mining Ltd (AIM: PGM) is a North American-focused, base and precious metal explorer and developer, which is fast-tracking the historically-producing Empire Mine in Idaho, USA, back into production and exploring for cobalt in Idaho and gold in Canada.
Having established an initial copper oxide JORC and NI 43-101 resource of 19.4 mt grading 0.47% copper ('Cu') for 90,547t contained Cu, plus zinc, gold and silver, Phoenix has defined a two-phase development strategy. Phase One is focused on commencing low cost, open pit production from the current oxide resource, targeting 8,000t copper cathode per annum. Stage Two will look to extend the life of mine by targeting the deeper (below c.120m), higher grade copper sulphides, where intercepts of up to 11.4% Cu have been recovered. A Preliminary Economic Analysis on the priority open pit oxide resource was completed in April 2018. It is estimated that only 5% of the potential ore system has been explored to date and accordingly there is significant opportunity to increase the resource through phased exploration; the current resource relates to the oxide resource only, which remains open along strike and does not include the deeper, higher grade sulphides. Phoenix owns 80% of Empire.
The Company also holds 100% of the Bighorn and Redcastle cobalt-copper properties in Idaho, USA, which are located north of the Empire Mine on the Idaho Cobalt Belt. These are situated close to the town of Cobalt and are close to projects being advanced by Canadian junior miners, including eCobalt Solutions and First Cobalt. Exploration will continue during 2018 to identify drilling targets.
The Company has also acquired an exclusive option to earn into 80% of the Gordon Lake Project, in the Northwest Territories, Canada, a high-grade shear hosted gold project comprising of 17 known mineralised zones of which only four have been tested with 59 diamond drill holes. The Company will proceed to examine the optimal way forward to develop the project as a low-cost underground gold producer.
With a management team that has successfully constructed, commissioned and operated mines and low risk, mining-friendly jurisdictions with excellent infrastructure, Phoenix is looking to fulfil its ambitions to become a mid-tier base and precious metals producing company, offering exposure to three high value and high demand metals with compelling demand/supply fundamentals.