Phoenix Copper Limited / Ticker: PXC / Sector: Mining

20 October 2021

Phoenix Copper Limited

('Phoenix' or the 'Company')

Red Star Ground Magnetics Survey significantly expands Red Star high-grade silver / lead potential

Phoenix Copper Ltd (AIM: PXC, OTCQX: PXCLF), the AIM quoted USA focused base and precious metals emerging producer and exploration company, is pleased to provide the results from the ground magnetics survey at the Company's Red Star project in Custer County, Idaho, USA.

Red Star is located 330 metres northwest along strike from the present northern limits of the proposed Empire Mine open pit and appears to be part of the same mineralised system. Three holes drilled in 2018 generated a maiden NI 43-101 compliant resource of 1.6 million silver equivalent ounces, with silver grades as high as 1,100 g/tonne ("g/t") and lead grades above 21%. An additional 10 holes were drilled in 2020. The Company commissioned a ground-based magnetics geophysical survey to better understand the nature and orientation of potential mineralisation and to inform the location and direction of a further drilling programme.

Highlights

·    Four high-amplitude areas of interest have been identified, including the discovery outcrop that was drilled in 2018 and 2020;

·    The size and amplitude of the three new areas of interest appear to be significantly greater than that of the discovery outcrop, which generated a maiden resource in 2018;

·    Further north-northeast magnetic anomalies trending from the Red Star discovery outcrop also identified;

·    The survey results will be used to guide the location and direction of the upcoming drill programme at Red Star;

·    Further survey results are awaited for the Horseshoe-White Knob area to the north, and the Navarre Creek gold project.

Ryan McDermott, Chief Executive Officer, said, "I am pleased to report the findings from the ground magnetics survey at our Red Star high-grade silver-lead project. The highlight was the discovery of three new high-amplitude magnetic anomalies.

"The size and amplitude of the three new anomalies are significantly greater than that of the discovery outcrop which generated the initial maiden resource for Red Star. These new discoveries exhibit a dynamic range of magnetic response as high as 26,412 nanoteslas ("nT") of magnetic relief. This magnetic response is considered extreme when compared to similar surveys in other locations and is not commonly observed. It suggests strong magnetite / magnetic mineralisation. Understanding these three new anomalies better is now a priority and will be the focus of additional drilling.

"The survey also identified a trend of lesser magnetic anomalies which roughly parallels the patented claim boundary, trending off the patented claims to the northeast. This is the same trend that was targeted in 2020 using float and sub-crop geochemistry, and will also be the subject of future drill targeting.

"The Red Star drilling program is planned to expand the NI 43-101 compliant 2018 maiden resource of 103,500 tonnes, which resulted from the 2018 drilling. The maiden resource contains 1.6 million silver equivalent ounces, with silver grades as high as 1,100 g/t (32 ounces / tonne) and lead grades above 21%. Approximately 3,000 meters of new drilling has been budgeted at Red Star and Horseshoe and is currently being targeted using the recent magnetics data, as well as existing geological and geochemical information.

"The ground magnetics survey in the Red Star area also included the magnetics surveying of the Horseshoe-White Knob area to the north, as well as the Navarre Creek gold project. The final reports for Horseshoe-White Knob and Navarre Creek are still in process and have not yet been received by the Company. The Horseshoe-White-Knob report will be important as we believe that area is similar in geology and geochemistry to the Red Star area. The Company will post the Red Star and Horseshoe-White Knob Magnetics Survey Report to our website as soon as the Horseshoe-White Knob portion of the report is received from the geophysical consultant.

"In addition to our examination of the magnetics survey results, the Phoenix team continues engineering for the feasibility study of the Empire Open-Pit Copper Oxide deposit, including final slope stability, metallurgical recovery and design, general arrangement layout, and hydrological characterization in the leach pad area. Meanwhile we also await further assay results from the drilling completed thus far in 2021.

"Whilst the Phoenix team remains healthy and productive, Covid-19 related delays in the shipping of parts and materials, as well as the contact tracing quarantine requirements, have delayed a number of our contractors, vendors and suppliers. We are encouraged by the magnetic survey results received to date and are continuing our exploration programs as quickly as we can.  We appreciate everyone's patience and look forward to reporting additional information and data as soon as it is received."   

Red Star and Horseshoe-White Knob Projects

Phoenix drilled three holes at Red Star in 2018 and an additional 10 holes in 2020. The results of both drilling programmes were promising. The 2018 programme resulted in a NI 43-101 compliant maiden resource of 1.6 million silver equivalent ounces, with silver grades as high as 1,100 g/t (32 oz/t) and lead grades above 21%. The geological and mineralogical complexity of the project area, coupled with the lack of discernible outcrop, created challenges for effectively targeting additional core holes. As a result, Dr. David W. Rodgers, a Ph.D. structural geologist and Idaho State University geology professor, was hired to complete high-resolution mapping of the project area and to assess the mineralogical characteristics of the deposit.

Following detailed surface mapping of the Red Star project area, which included some work southward toward the Empire Mine and northward toward the historic White Knob and Horseshoe Mines, as well as detailed analysis of the Red Star core and drill cuttings, Dr. Rodgers concluded that higher grade silver and lead mineralisation occurs primarily in the contact region between the Mackay Granite formation and the White Knob limestone formation. This is important in that mineralisation does not occur between these two formations elsewhere in the main Empire Mine area.

Furthermore, Dr. Rodgers concluded that the higher-grade silver mineralisation was focused in areas within the magnetite-bearing skarn that had been subjected to a superimposed event, possibly highly acidic, wherein the later-stage silver-bearing fluids leached the magnetite skarn. Because the silver mineralisation only occurs in iron-rich portions of the skarn, which are dominated by magnetite, then those areas near the contact of Mackay Granite and White Knob limestone with magnetite development are thought to be favorable targets for higher grade silver.

Due to the lack of discernible outcrop at Red Star, it is difficult to determine the underlying geology, Dr. Rodgers recommended the use of ground magnetic surveying, coupled with geologic mapping, to better define future drilling targets.

The historically mined high grade Horseshoe and White Knob claim blocks produced average grades of 204 g/t silver, 19% lead, 6.5% zinc and 0.73% copper. In 2018, Phoenix collected rock chip and channel samples from the Horseshoe Mine claim block. The results of the sampling programme were reported in October 2018 and showed results as high as 9.19% copper, 580 g/t silver, and 20% lead. This clearly opens up another significant prospect within the Empire ore system. During the construction of the Empire open pit copper/gold project the Company will continue to actively explore the Red Star and related area, with a view to early development of this exciting opportunity.

Qualified Person

The foregoing technical information contained in this news release has been reviewed and verified by Zachary J. Black, SME-RM, General Manager. Mr. Black is a resource geologist with more than 17 years of domestic and international experience in the mining and construction industries. Mr. Black has a degree in Geological Engineering from the University of Nevada, Reno and is a registered member of the Society for Mining, Metallurgy, and Exploration, Inc. He is a Qualified Person under the AIM Rules. Mr. Black 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 ongoing Environmental, Social, and Corporate Governance ("ESG") platform, overseen by the Company's ESG & Sustainability Committee.

Market Abuse Regulation (MAR) Disclosure

The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014 which has been incorporated into UK law by the European Union (Withdrawal) Act 2018. Upon the publication of this announcement via Regulatory Information Service, this inside information is now considered to be in the public domain.

Contacts

For further information please visit https://phoenixcopperlimited.com or contact:

Notes

Phoenix Copper Limited is a USA focused, base and precious metals emerging producer and exploration company, initially targeting copper and zinc production from an open pit mine from late 2022.

Phoenix's primary operations are focused near Mackay, Idaho in the Alder Creek mining district, at the 80% owned Empire Mine property, which historically produced copper at grades of up to 8%, as well as gold, silver, zinc and tungsten, from an underground mine. 

Since 2017, Phoenix has carried our extensive drill programmes which have defined a NI 43-101 compliant PEA (preliminary economic assessment) for an open pit heap leach solvent extraction and electrowinning ("SX-EW") mine, which was updated in October 2020. The contained metal in all NI 43-101 compliant categories of resources, measured, indicated and inferred, stand at 129,641 tonnes of copper, 355,523 ounces of gold, 10,133,772 ounces of silver and 58,440 tonnes of zinc. Phoenix updated its economic model in February 2021 to include the processing of all contained metals through a two phased approach.

In addition to Empire, the district includes the historic Horseshoe, White Knob and Blue Bird Mines, past producers of copper, gold, silver, zinc, lead and tungsten from underground mines. A new discovery at Red Star, 330 metres northwest of the Empire Mine proposed open pit, has revealed high grade silver / lead 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. Additionally, the district includes Navarre Creek, a volcanic hosted, Carlin-type gold discovery which hosts a 6.1 km gold strike length within a 14.48 km² area. The Company's total land package at Empire comprises 8,034 acres (32.51 sq kms).

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. The stated aim of the Company is to fund this phased exploration through free cashflow generated by its initial mine. A Plan of Operations in respect of the initial open pit mine was filed with the relevant regulatory authorities in June 2021.

Phoenix also has two wholly owned cobalt properties on the Idaho Cobalt Belt to the north of Empire. An Earn-In Agreement has been signed with First Cobalt Corporation, Toronto, in respect of one of those properties.

More details on the Company, its assets and its objectives can be found on PXC's website at https://phoenixcopperlimited.com.