Phoenix Copper Ltd said it has agreed to buy the remaining 1.25% of the 2.5% net smelter royalty for the Empire Mine property from Honolulu Copper Corp.
The property in Idaho, USA includes the Empire Mine oxide open-pit, the Red Star silver-lead project, and the historically mined sulphide deposit below the open pit.
Phoenix agreed to pay an additional $450,000 to acquire the remaining part of the net smelter royalty.
Back in October it purchased an initial 1.25% of the Honolulu NSR, and all of Honolulu's patented and unpatented mining claims, as well as 1% of the 2.5% NSR payable to Mackay for a total of US$1.3mln.
So far, US$800,000 of the original payment has been made by the AIM-quoted company, with US$500,000 payable in two equal further instalments due on 31 December 2022 and 31 December 2023.
Following the purchase, Phoenix's 80% owned Konnex Resources subsidiary, which is operator of the Empire Mine, will pay a 2.5% NSR to Phoenix from future production originating on the former Honolulu claim block, and a 1.5% NSR to Mackay plus a 1% NSR to Phoenix from future production originating on the Mackay claim block, based on the order in which the respective claim blocks are mined.
"Our preliminary economic model for the Empire open pit mine, which is based on a $3.60 copper price, forecasts gross revenue of $836mln over an initial 10-year project life," said Richard Wilkins, chief financial officer of Phoenix.
"The entirety of the Honolulu 2.5% NSR now payable to Phoenix, plus the 1% NSR purchased from Mackay LLC, 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 in due course."
Phoenix also announced that it has appointed Tavira Securities as joint broker with effect from 1 January 2022, in place of Brandon Hill.