Phoenix Copper Ltd - Empire OP Mine NI 43-101 Compliant Resource Update

Phoenix Copper Limited / Ticker: PXC / Sector: Mining 

26 October 2020

Phoenix Copper Limited

("Phoenix" or the "Company")

Empire Open Pit Mine shows continued increase in gold, silver, copper and zinc - NI 43-101 Compliant Resource Update

Phoenix Copper Ltd (AIM: PXC, OTCQX: PXCLF), the AIM quoted North American focused base and precious metals company, is pleased to announce an updated NI 43-101 compliant resource for its Empire Open Pit Mine in Idaho, USA. The results of the Empire Mine work programme, to date, were published throughout the period from 2017 onwards, and can be found on the Company's website at www.phoenixcopperlimited.com. 

Highlights

·    Updated NI 43-101 compliant resource reported at the Empire Mine Open Pit

·    19% increase in the Measured & Indicated resource and a US$122 million increase in contained metal value at current metal prices

·    Measured and Indicated resource - 22.9 million tonnes (May 2020: 19.3 million tonnes) - an increase of 19%

o  Gold - 238,406 ounces (May 2020: 217,500 ounces) - an increase of 10%

o  Silver - 7.59 million ounces (May 2020: 6.82 million ounces) - an increase of 11%

o  Copper - 87,543 tonnes (May 2020: 81,948 tonnes) - an increase of 7%

o  Zinc - 43,871 tonnes (May 2020: 37,650 tonnes) - an increase of 17%

·    Updated resource established following a 32-hole drilling programme, at a direct cost of less than US$300,000, and representing 7% of a total of 445 drill holes in the current resource model

·    An updated Preliminary Economic Assessment underway for the Empire Mine Open Pit project based on this resource update and recent environmentally friendly metallurgical test work

Ryan McDermott, Chief Executive Officer, commented: "Following the completion of our latest 32-hole drilling programme that was focused primarily on increasing gold and silver resources, as well as converting the existing Inferred resources to Measured & Indicated (M&I) resources, I am pleased to report a 19% overall increase in the M&I resource from May 2020, which includes the addition of 20,906 gold ounces, 770,738 silver ounces, 5,595 tonnes of copper, and 6,221 tonnes of zinc.  This increased measured and indicated metal resource equates to 172,912 copper equivalent tonnes, which is an increase of over US$122 million in gross metal value at US$3.00/lb copper, compared to the May 2020 M&I resource of 154,502 copper equivalent tonnes at the same copper price.    This increase in gross metal value alone equates to over three times our current market capitalisation.  Considering the relatively inexpensive cost of the 32-hole drilling programme, at less than US$300,000, I would venture to say that we have received great value for the money spent.  In fact, since declaring our maiden resource in 2017, we have increased our M&I tonnage by 220% and the contained metals substantially.

"In this updated resource estimation, Hard Rock Consulting ("HRC") modelled the various mineralised trends separately so that substantial gold and silver grades could stand on their own and not be subjected solely to the surrounding copper values.  This resulted in a larger overall pit shell that is inclusive of significantly more metal.  The Phoenix team continues with the metallurgical evaluation of process designs for the polymetallic ore with the objective of maximising the recovery of copper, zinc, gold and silver, versus the alternative of processing oxide-copper ore and taking the other metals simply as by-products from the oxide copper processing.

"Including the Inferred resources, we now have 129,641 tonnes of copper, 58,440 tonnes of zinc, 10,133,772 ounces of silver and 355,523 ounces of gold.

"I look forward to reporting the results of the 2020 Empire Preliminary Economic Assessment, which will be completed by HRC and is currently under way."

Empire Mine -October 2020 Resource Update

In May 2020, an NI 43-101 compliant resource for the Empire polymetallic open pit was generated for an agitation tank leach plant to recover gold and silver using ammonium thiosulfate ("ATS") leach, followed by copper and zinc tank leach in the same circuit.  The current gold and silver price performance, coupled with the more environmentally friendly sodium cyanide alternative ATS, has provided an opportunity to expand the Empire resource base to include all metals.

Using the same modelling parameters used in the May 2020 resource update and adding the assays from the recent 32-hole drilling programme, HRC estimated this updated NI 43-101 compliant resource using the value of all gold, silver, copper and zinc in the deposit using a cut-off grade of 0.292% copper equivalent oxide, and 0.497% copper equivalent sulphide, compared with the May 2020 resource at a  copper equivalent only cut-off of 0.36%, is tabulated as follows: -

The HRC report entitled "October 2020 Resource Updated for the Empire Mine Project" for Konnex Resources (Phoenix's 80% owned US operating subsidiary) will be available for review on the Company's website at www.phoenixcopperlimited.com within 45 days of the issuance of this news release.  This report will be in imperial units (1 US short ton = 2,000 lbs, 1 metric tonne = 2,204.6 lbs). HRC estimated the mineral resource for the Project based on drill hole data constrained by geologic boundaries with an Ordinary Krige algorithm. Leapfrog Geo V4.4.2 software was used to complete the resource estimate. 

The mineral resources for the Project have been estimated in a manner consistent with the NI 43-101 Committee of Mineral Reserves International Reporting Standards ("CRIRSCO") of which both the Canadian Institute of Mining, Metallurgy and Petroleum ("CIM") and Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (the "JORC Code") are members.

An updated Preliminary Economic Assessment for the Empire Mine Open Pit Project based on this updated resource and revised processing methods will follow in due course.

Qualified Person

The information in this announcement has been reviewed by Roger Turner A.C.S.M., M.Sc., M.I.M.M.M., C.Eng., Chief Technical Officer and Director of the Company. Mr Turner is a graduate mining engineer from the Camborne School of Mines with an MSc in Economic Geology from Leicester University with more than 40 years' experience in mine development, construction and operation and is a qualified person under the AIM Rules. Mr Turner consents to the inclusion of the information in the form and context in which they appear.

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 future Environmental, Social, and Corporate Governance (ESG) platform.

 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 2020 and October 2020.

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.