Phoenix Copper Ltd (AIM: PXC; OTCQX: PXCLF), the AIM quoted USA focused base and precious metals emerging producer and exploration company, is pleased to announce that it has entered into agreements with Honolulu Copper Corporation (“Honolulu”) and Mackay LLC (“Mackay”) to acquire part of the 2.5% royalty payable to each of them, and the Honolulu mining claims, pursuant to the Mining Leases on the Empire Mine in Idaho, USA (the “Agreements”).
Pursuant to the terms of the Agreements, Phoenix has acquired 1.25% of the royalty payable to Honolulu, including Honolulu’s underlying patented and unpatented mining claims, and 1% of the royalty payable to Mackay, for a total consideration of $1.3 million payable in cash, $550,000 of which has been paid, and $750,000 of which is payable in three instalments of $250,000 each, due on 31 December 2021, 2022, and 2023.
Following the acquisition of the royalty, Konnex Resources Inc, the Company’s 80% owned Idaho registered subsidiary and operator of the Empire Mine (” Konnex “), will pay a 1.25% royalty to Honolulu plus a 1.25% royalty to Phoenix, or a 1.5% royalty to Mackay plus a 1% royalty to Phoenix, based on the order in which the respective claim blocks are mined.
The underlying patented and unpatented mining claims acquired from Honolulu will be owned by Phoenix’s 100% owned Idaho registered subsidiary, Lost River Resources Inc (” Lost River “). As a result, the Mining Lease with Honolulu has been terminated and will be replaced by a new mining agreement between Konnex and Lost River with substantially the same terms as the prior Mining Lease with Honolulu. Konnex’s existing rights and obligations with regard to the Empire Mine will therefore remain unchanged. The terms of the Mining Lease with Mackay will also remain unchanged.
Richard Wilkins, CFO of Phoenix Copper, commented: “Our preliminary economic model for the Empire open pit mine, which is based on a $3.60 copper price, forecasts gross revenue of $836 million over an initial 10-year project life. The royalty now payable to Phoenix should therefore represent significant additional revenue to Phoenix over the same period and is intended to contribute additional funds to the corporate dividend policy which we plan to adopt for the benefit of our shareholders.
“As some of the mining claims cover portions of the potential Red Star silver – lead deposit, Phoenix will also benefit from the royalty otherwise payable to Honolulu or Mackay on Red Star, as well as on the deeper underground sulphide copper deposit, as and when those projects start to generate revenue. The patented mining claims now owned by Phoenix’s 100% owned Idaho registered subsidiary, Lost River, are considered fee simple (private land) and the ownership includes both surface and mineral rights.”
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 ongoing Environmental, Social, and Corporate Governance (” ESG “) platform, overseen by the Company’s ESG & Sustainability Committee.
Market Abuse Regulation (MAR) Disclosure
The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014 which has been incorporated into UK law by the European Union (Withdrawal) Act 2018. Upon the publication of this announcement via Regulatory Information Service, this inside information is now considered to be in the public domain.
Contacts
For further information please visit https://phoenixcopperlimited.com or contact:
Phoenix Copper Limited
Ryan McDermott
Tel: +1 208 954 7039
Dennis Thomas
Tel: +44 7827 290 849
Richard Wilkins
Tel: +44 7590 216 657
