TIDMPXC
RNS Number : 6050Z
Phoenix Copper Limited
24 May 2021
Phoenix Copper Limited / Ticker: PXC / Sector: Mining
24 May 2021
Phoenix Copper Limited
("Phoenix" or the "Company")
Earn-in Agreement with First Cobalt Idaho on the Redcastle
Cobalt Property
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 an earn-in
agreement (the "Agreement") with First Cobalt Idaho, the wholly
owned subsidiary of Toronto-based First Cobalt Corporation (TSX.V:
FCC, OTCQX: FTSSF), in respect of the Company's Redcastle cobalt
property on the Idaho Cobalt Belt. The Company's cobalt holdings
can be viewed on the Phoenix website at
https://phoenixcopperlimited.com.
Overview of the Agreement
-- In consideration of signing the Agreement, First Cobalt will
pay US$50,000 and issue 200,000 unrestricted shares to Phoenix.
-- First Cobalt can earn a 51% interest in Borah Resources Inc,
the Company's 100% owned subsidiary and owner of the Redcastle
property, by spending no less than US$1,500,000 in exploration and
related work on Redcastle over an initial three year period, and by
paying a further US$100,000 to Phoenix on the third anniversary of
the Agreement ("Phase 1").
-- Subject to the completion of Phase 1, First Cobalt may earn
an additional 24% interest in Borah Resources, for a total interest
of 75%, by spending no less than a further US$1,500,000 in
exploration and related work on Redcastle over a further two year
period, and by paying a further US$150,000 to Phoenix in cash or
the equivalent in unrestricted First Cobalt shares, at Phoenix's
option, on the fifth anniversary of the Agreement, and by providing
Phoenix with a NI 43-101 compliant Preliminary Economic Assessment
("PEA") for the Redcastle property ("Phase 2").
-- Upon completion of Phase 1 and Phase 2, Phoenix and First
Cobalt will enter into a joint venture agreement (the "JV"), with
First Cobalt as managers, and will share in the capital
expenditures for the ongoing development of Redcastle in accordance
with their respective ownership interests (First Cobalt 75%,
Phoenix 25%). If either party does not contribute pro-rata to its
ownership interest, that interest will be diluted accordingly.
Should Phoenix's interest in the JV be reduced to 10% or less, a
2.5% royalty shall become payable to Phoenix. This royalty can be
acquired by First Cobalt for US$500,000 per each 0.5%.
-- The Company's Bighorn cobalt property on the Idaho Cobalt
Belt does not form part of the Agreement and is being transferred
from Borah Resources Inc into Salmon Canyon Resources Inc, a wholly
owned subsidiary of the Company.
Ryan McDermott, Chief Executive Officer, commented:
"Our Redcastle property is located in Lemhi County in the
southern half of the Idaho Cobalt Belt approximately 110 miles
north of the Empire Mine. The property shares a common border with
First Cobalt's Iron Creek property and consists of 600-acres of
unpatented mining claims. The Iron Creek Mine currently hosts
indicated cobalt and copper resources of 2.37 million tonnes,
grading 0.32% cobalt and 0.61% copper. Additional inferred cobalt
and copper resources have been estimated at 2.95 million tonnes at
0.28% cobalt and 0.68% copper. We are delighted to be partnering
the development of Redcastle with First Cobalt, a TSX quoted
company with a market capitalisation of approximately C$168
million.
"First Cobalt has been drilling from surface and underground
workings at Iron Creek since 2018. They are well-positioned to
carry out exploration at our Redcastle property adjacent to Iron
Creek with the expertise, staffing, and infrastructure already in
place locally. This Agreement will enable development of the
Redcastle property to progress, at no cost to Phoenix, while we
concentrate our efforts on our flagship Empire Mine in Custer
County.
"The capital cost savings to Phoenix are likely to be
considerable, given that the Redcastle ore will be mined and
processed as an extension to First Cobalt's Iron Creek mine. In
addition to this local infrastructure, First Cobalt also owns the
only cobalt refinery in North America, located in Ontario, Canada.
This refinery will receive cobalt from the Idaho operations, saving
Phoenix additional costs which would be incurred in developing or
sourcing refining capacity. The refinery will employ a low carbon
footprint hydrometallurgical process and will provide battery grade
refined cobalt sulfate suitable for the electric vehicle market.
Both Phoenix and First Cobalt recognise the potential future
synergies as we work together on the Idaho Cobalt Belt, whilst at
the same time enabling us to focus on our base and precious metals
projects at Empire.
"This Agreement, as well as the progress currently being made at
our Empire Mine, is supported by a strong macroeconomic environment
for the materials required for sustainable energy transition. The
U.S. Administration has proposed an infrastructure bill that
supports the domestic production of base metals, such as cobalt and
copper, both required for global electrification and clean energy
initiatives.
"Our 580-acre Bighorn cobalt property, located approximately 25
miles north of Redcastle in the northern half of the Idaho Cobalt
Belt, is not included in this current agreement with First Cobalt
as it is situated outside of the immediate Iron Creek area.
"I look forward to working with the First Cobalt team in the
development of Idaho-based cobalt and copper resources from the
Idaho Cobalt Belt."
Trent Mell, First Cobalt Chief Executive Officer, commented:
"We are pleased to enter into this earn-in agreement with
Phoenix Copper on the Redcastle property. The property is directly
adjacent to our Iron Creek Project and lies just 750 metres east of
our Ruby Zone cobalt-copper prospect, which is exposed at surface.
The host rock sequence to the sulfide mineralization is interpreted
to extend to the Redcastle property, so we believe the
prospectivity of this area is quite high. Phoenix's experience of
working in Idaho on their own copper projects should help us
advance our programme quickly."
Redcastle and Iron Creek Cobalt - Lemhi County, Idaho
The Redcastle property is located in the southern half of the
Idaho Cobalt Belt in Lemhi County approximately 110 miles north of
the Empire Mine. The property consists of 600-acres of unpatented
mining claims situated due east, and sharing a common border with,
First Cobalt's Iron Creek Cobalt Project.
The Iron Creek Cobalt Project is located along the most prolific
trend of cobalt mineralization in the USA that includes the
historic Blackbird Mine. Iron Creek consists of 1,698 acres of
patented and unpatented mining claims. It was first discovered in
1946 and extensively explored in the early 1970s. First Cobalt has
completed over 29,000 metres of diamond drilling and published a NI
43-101 compliant resource estimate in 2019. Significant
infrastructure is in place to support multiple drills and surface
and underground activity for future work. Historic underground
development includes 600 metres of drifting from three adits and an
all-weather road connecting the project to Idaho State Highway 93.
Further information can be found at
https://www.firstcobalt.com.
Market Abuse Regulation (MAR) Disclosure
This announcement contains inside information for the purposes
of Article 7 of the Market Abuse Regulation (EU) 596/2014 as it
forms part of UK domestic law by virtue of the European Union
(Withdrawal) Act 2018 ("MAR"), and is disclosed in accordance with
the Company's obligations under Article 17 of MAR.
Contacts
For further information please visit
https://phoenixcopperlimited.com or contact:
Phoenix Copper Ryan McDermott Tel: +1 208
Limited Dennis Thomas 954 7039
Richard Wilkins Tel: +44 7827
290 849
Tel: +44 7590
216 657
SP Angel (Nominated David Hignell / Caroline Tel: +44 20
Adviser) Rowe 3470 0470
----------------------------------- ---------------
Brandon Hill Jonathan Evans / Oliver Stansfield Tel: +44 20
Capital (Joint 3463 5000
Broker)
----------------------------------- ---------------
WH Ireland (Joint Harry Ansell / Adam Pollock Tel: +44 207
Broker) / Katy Mitchell 2201666
----------------------------------- ---------------
Panmure Gordon John Prior / Hugh Rich / Tel: +44 20
(UK) Limited Ailsa Macmaster 7886 2500
(Joint Broker)
----------------------------------- ---------------
EAS Advisors Matt Bonner / Rogier de la Tel: +1 (646)
(US Corporate Rambelje 495-2225
Adviser)
----------------------------------- ---------------
Blytheweigh Tim Blythe / Megan Ray Tel: +44 20
(Financial PR) 7138 3204
----------------------------------- ---------------
Notes
Phoenix Copper Limited is a USA focused, base and precious metal
emerging producer and exploration company, 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 27.8 km (2)
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
km(2) 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 for all metals.
Present contained metal in all NI 43-101 compliant categories of
resources, measured, indicated and inferred, stand at 355,523
ounces of gold, 129,641 tonnes of copper, 10,133,772 ounces of
silver and 58,440 tonnes of zinc. Following the latest NI 43-101
compliant resource, Phoenix updated its economic model in February
2021 to include the processing of all contained metals through a
two phased approach.
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 https://phoenixcopperlimited.com
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