Phoenix Copper raises £16.45m to fund development of Empire Mine
(AIM: PXC ) has raised £16.45m and conducted an open offer to raise up to £1.95m, both of which will be used to fund the development of its Empire Mine.
The Company said it has raised a total of £12.30m in aggregate before costs at 35p and made a direct subscription for 11,870,009 new Shares to raise £4.15m. In addition, Phoenix said it will conduct an Open Offer which will enable it to raise up to a further £1.95m.
The precious metal emerging producer and exploration company is carrying out a feasibility study to bring the historically producing Empire Mine, in Idaho, USA, back into production.
Phoenix acquired an 80% interest in the Empire Mine property back in 2017. Since the acquisition, Phoenix has increased the claim area from 818 acres to 5,717 acres, mainly to the northwest and west, and in doing so has increased the potential for additional oxide and sulphide copper resources, as well as the potential for stand-alone gold and silver resources.
The proceeds will aid the ongoing development of the Empire Mine open pit 'starter' project to produce copper, zinc, gold and silver. This activity includes, amongst other things, mine optimisation, metallurgical test work, a plan of operations and a related reclamation plan.
This fundraising follows the completion of a new economic model for the Empire Mine open pit project last month which indicated an “impressive” starter operation that would deliver revenue of $784 million with a pre-tax 7.5% NPV of $105 million and an IRR of 57%.
This demonstrated a significant increase in the NPV from a previous EM in August 2019.
Shares in Phoenix Copper have more than doubled in value since the start of May 2020. The stock was trading 12.12% lower this morning immediately following the announcement.
The funds will also enable Phoenix to pursue ongoing exploration at the Red Star high grade silver-lead deposit just north of the Empire open pit area as well as the recently staked Navarre Creek gold project, with magnetic surveys and geochemical work planned for both.
Marcus Edwards-Jones, Chairman of Phoenix said the Company intends to commence this work, as well as drilling programmes on both properties, in 3Q21 with a view to adding to its maiden Inferred resource at Red Star and generating an initial resource at Navarre Creek.
The Company added that it is also planning to commence an initial drilling programme into the deeper high-grade underground sulphide deposit below the Empire Mine open pit which was historically mined at head grades of between 6-8% copper from 1902 to 1942.
The balance of the fundraising will also be used to repay the recently announced £2 million loan facility as well as to provide the Group with additional working capital, Phoenix said.
“We are grateful for the support we have received from both new and existing shareholders and the Directors believe this Fundraising provides the Company with a clear line of sight to production and cash flow, without the need for further equity raises in the foreseeable future,” added Edwards-Jones.
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