Shares in Phoenix Copper Ltd (AIM:PXC, OTCQX:PXCLF) jumped 45% after the company announced a letter of intent with a US-based investor for a proposed $75 million bond placement, aimed at advancing its mining operations in the United States.
Under the deal, the investor would subscribe to secured, floating-rate copper bonds yielding a minimum of 8.5%, with maturities ranging from 2029 to 2033.
Pending due diligence and final legal documentation, the funding would be released in three tranches, starting with an initial $30 million.
The agreement also includes the issuance of convertible preference shares, which could potentially give the investor up to a 10.5% stake in Phoenix’s expanded share capital. A seat on the board will be granted once the first tranche is received.
While the company cautioned that the deal is not yet finalised, it noted that discussions are progressing positively and further updates will follow.
Richard Wilkins, Chief Financial Officer of Phoenix, commented: “We have been in discussions with the Investor for a number of months, and we look forward to completing the appropriate legal documentation and welcoming the Investor on board as both a Bondholder and, through the proposed conversion of the preference share, a shareholder.
“This proposed placement of Bonds will provide the Company with the cash resources to complete construction of the Empire open-pit copper, gold and silver mine in Idaho, USA and proceed into production, as well as commencing an underground drilling programme on the Empire sulphide vein system, by way of driving an initial adit to the known high-grade (8.38% copper) zone.”
