Empire Mine Open Pit Status Update

Phoenix Copper Limited / Ticker: PXC / Sector: Mining

15 December 2021

Phoenix Copper Limited

('Phoenix' or the 'Company')

Empire Mine Open Pit Status Update

Exploratory drilling encounters further high-grade oxide mineralisation

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 a status update on its Empire Mine Open Pit Project in Idaho, USA.

Highlights

·    Three shallow exploratory drill holes into an area of the Empire Mine Open Pit not previously drilled all encountered further oxide mineralisation, including:

o  18.3 metres ('m') of 0.61% copper, and 12.8 grammes/tonne ('g/t') silver from surface including 4.6 m of 0.86% copper, 15.5 g/t silver, and 1.02% zinc from 9.1 m 

·    The Empire Mine Open Pit project remains on course for Production

·    The Empire Mine Oxide Open Pit feasibility study remains on schedule for completion in early Q2 2022 and will include an update of the resources

·    The Empire Mine Oxide Open Pit operating plan was presented to the community of Mackay, Idaho during a Town Hall meeting on 1 December 2021

Ryan McDermott, Chief Executive Officer, said, "We have received the analytical results from Empire step-out drill holes KX21-01 to KX21-03, and from three condemnation drill holes. These drill holes were completed using a reverse-circulation drill rig that was available for a short period while our core drilling rig was busy completing an oriented coring program for the feasibility-level slope stability studies.

"We completed three exploratory drill holes on the south end of the Empire oxide copper deposit in an area that had no previous drilling but surface indications suggesting it to be prospective.  Copper, silver, and zinc mineralisation was intercepted in all three of the drill holes KX21-01 - KX21-03 (see results in Table 1, below), including grades in excess of the average grade used in our preliminary economic model.  KX21-02 was of significant interest, with an average oxide copper grade of 0.61% from the surface down 18.3 m, and including 4.6 m of 0.86% copper.  This mineralised zone appears contiguous with the main Empire oxide deposit but has not yet been included in the resource.  KX21-01 encountered a shorter interval of 3.1 m of zinc mineralisation grading 1.56% at 47.2 m depth, and KX21-03 encountered a 1.5 m interval of 1.46% copper at a depth of 29.0 m.  The Phoenix team is assessing these results for additional drilling in the future, as well as inclusion in the next resource update in early Q2 2022.

"Analytical data from the condemnation drilling was as expected with no significant mineralised intercepts.  The 2021 geotechnical oriented core drilling program was also successful in providing data for slope stability calculations to be used in the feasibility study. 

"Our focus is now squarely on bringing the Empire Open Pit into production as soon as possible. With over 400 holes drilled, we have a profound understanding of the resource at the Open Pit and have planned our budgets accordingly. To be finding evidence of additional ore at prospective grades is very good news.  We are also pleased to confirm that the feasibility study for the Empire Open Pit Project remains on track for completion in early Q2 2022, and that the Company held its first Town Hall community meeting in Mackay on 1 December 2021, as part of our ESG and Sustainability Program's community liaison process. More than 135 citizens attended the meeting, wherein the Phoenix team presented a description of the proposed operating plan and then fielded questions and comments from the attendees. The questions and comments from the community included, but were not limited to, transportation and supply routes, mine staffing and staff housing, and economic community benefits. The information gathered will be invaluable in the future operating design. I want to personally thank everyone who attended the meeting for taking time out of their busy schedules to do so."

Table 1 - Empire Drilling Results 15 December 2021

The Empire Open Pit Copper Oxide Project

The Empire Open Pit copper oxide project contains a Measured & Indicated resource of 87,543 tonnes of copper, 43,871 tonnes of zinc, 238,406 ounces of gold and 7.6 million ounces of silver. At a $3.60 copper price the preliminary economic model shows a pre-tax 7.5% NPV of $105 million with a 57% IRR, and a post-tax NPV of $88 million with a 47% IRR. Estimated capital expenditure of $53 million is paid back within two years, and gross revenue over 10 years is $836 million. At current metal prices the pre-tax NPV rises to $159 million with a 92% IRR, and post-tax NPV rises to $144 million with an 82% IRR. Capital expenditure is paid back in less than one year, and gross revenue over 10 years is $911 million. It is hoped that these economics can be improved as a result of the ongoing work on the feasibility study.

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 out extensive drill programmes which resulted in the publication of a NI 43-101 PEA in October 2020 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 maiden resource of 103,000 tonnes containing 173.4 g/tonne silver, 0.85 g/tonne gold and 3.85% lead (1.6 million ounces silver equivalent) was reported in an NI 43-101 technical report published in May 2019. Additionally, the district includes the Navarre Creek Project, a volcanic hosted, precious metals target in 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.