Phoenix Copper (AIM: PXC, OTCQX ADR: PXCLY) has successfully filled a US$80 million corporate copper bond issue with a single investor, NIU Invest, a European private equity firm. This subscription is contingent on meeting specific conditions.
The funds from the bonds will be released in phases corresponding to the progress of the Empire Open-Pit Mine in Idaho, USA. The schedule for fund release includes US$5 million on May 31, 2024, another US$5 million on June 30, 2024, US$20 million on August 31, 2024, and the remaining US$50 million in two instalments in the first half of 2025.
These bonds are non-convertible and involve an arrangement fee of 33.88 million shares, along with no-cost warrants for an additional 22.59 million shares. Over a five-year period, NIU Invest has the potential to acquire up to a 25% strategic stake in Phoenix Copper on a fully diluted basis.
Marcus Edwards-Jones, the Executive Chairman of Phoenix Copper, expressed optimism about the project’s progress and the current copper market conditions. “Copper is trading close to the significant $10,000 per tonne mark after a strong recent rally. Despite some setbacks, it seems our efforts are aligning at last. Challenges in the Chinese and US economies delayed the impact of electrification and supply issues on copper prices, but it appears that realization is now setting in,” he stated.
Edwards-Jones also highlighted the strategic corporate activity in the copper industry, citing the BHP Group’s bid for Anglo American PLC as an example of companies preferring to acquire existing copper resources rather than developing new ones. He suggested that this strategy, often influenced by short-term decision-making, supports a ‘higher for longer’ copper price scenario.
This is expected to generate about 70% of Phoenix’s projected revenue from the Empire mine in Idaho, a state known for its consistent support of mining projects.
Additionally, Phoenix reported that its investment in the Empire project increased to US$38 million in 2023, while the company posted an annual loss of US$1.57 million.
