Phoenix Copper Limited / Ticker: PXC / Sector: Mining

8 September 2022

Phoenix Copper Limited

("Phoenix" or the "Company")

Operational & Financing Update

Phoenix Copper Ltd (AIM: PXC, OTCQX ADR: PXCLY), the AIM quoted USA focused base and precious metals emerging producer and exploration company, is pleased to provide an update on operations at its Idaho, USA projects, as well as the Company's corporate copper bond issue.

Highlights:

·    Drilling at the Empire open pit copper mine ("Empire") commenced in June 2022 to further the Company's understanding of metallurgical recovery using Ammonium Thiosulfate ("ATS") reagent;

·    Trade-off, optimization, and engineering studies progressing on Empire;

·    Exploratory drilling in the North Pit/Red Star area to commence on 15 September 2022;

·    Navarre Creek drilling plan approved by US Forest Service ("USFS"); and

·    Corporate copper bond issue underway with an initial tranche expected to complete in the next few weeks.

Ryan McDermott, CEO of Phoenix Copper Limited said: "The work carried out this summer is moving the Company closer to its goal of bringing Empire into production in the most economical and environmentally sustainable way possible. We are making progress across all fronts, though are not immune to the same supply chain and contractor staffing challenges that companies throughout the industry are experiencing.

"Metal prices, as well as equipment and supply pricing, are fluctuating wildly as we pivot back toward pre-covid norms. While equipment and supply pricing stabilize, our staff are using this time to evaluate and test technologies that we hope will improve the project economics for Empire and reduce our environmental footprint, such as aerial tramming from the open pit to the processing facility versus classical truck haulage, and concurrent leaching of copper and precious metals using the environmentally friendly ATS reagent.

"There is currently a heavy focus on the domestic production of metals for green energy technologies like wind turbines, solar panels, and electric vehicles, particularly with the recent news that the California Air Resources Board has mandated that all new vehicle sales will be electric or hydrogen by 2035, and that several other States, as well as Canada and the E.U., are following suit. Our key value proposition is the copper resource at Empire that will help meet the global demand created by these green electrification initiatives and mandates.  As more and more of these green energy programs are initiated, we expect the demand for copper and critical EV metals to increase, likely far surpassing supply. We are well positioned to meet some of that demand, initially from the open pit mine and ultimately from the previously mined deeper sulfide deposit where we have intercepted copper grades in excess of 8%.

"I am also pleased to report that we have now managed to secure a second drill rig which will arrive on site on 15 September and will commence an exploratory drilling program at the North Pit/Red Star area.

"I should also mention that we have received a Decision Memo from the USFS approving the first drilling program at our Navarre Creek gold project.  We submitted an operation plan for the drilling on 15 April 2021, it was approved on 30 August 2022 and will commence in June of next year. This will allow us to follow up on the encouraging surface geochemistry and geophysics completed at Navarre Creek over the last few years.

"Finally, the corporate copper bond issue launched in June has attracted considerable interest from potential investors, given the positive long-term outlook for copper demand. Despite a difficult market, an initial tranche is expected to complete in the next few weeks, which will enable us to accelerate the ongoing development of Empire and the surrounding mineralized district, including placing orders for long lead-time items of equipment, and appropriate preparatory work on our patented land. I look forward to providing our shareholders with further updates regarding the bond issue as appropriate."

Empire open pit  

Phoenix initiated its 2022 drilling program in June to provide samples for ATS metallurgical test work. ATS is the non-toxic, environmentally friendly reagent the Company plans to use for the recovery of base and precious metals from Empire's open pit resource. With the results of these studies, the Company will determine whether the production of precious metals can be moved from the secondary phase of the operation to the primary phase. If feasible, this would potentially enhance Empire's projected economics in the early years of production.

There is no statutory timeframe for approval of the Plan of Operations (the "Empire Plan"). However, it appears that few, if any, negative impacts from future operations will exist and Phoenix is confident that it will be able to address any concerns that regulators may raise. The Company is positioning itself to commence construction of the mine and processing facilities, immediately followed by initial production, as soon as the Empire Plan is approved.

Red Star

A second drill rig is scheduled to arrive on site in the middle of September 2022 and will report to the North Pit/Red Star area upon its arrival. The month-long drilling program is anticipated to improve the Company's understanding of mineralization in the area.

Navarre Creek (Gold)

Phoenix Copper submitted a Plan of Operations for drilling activities at Navarre Creek to the USFS on 15 April 2021 (the "Navarre Creek Plan").  The USFS posted a public scoping notice of the Navarre Creek Plan on 18 November 2021, and the Navarre Creek Plan was approved on 30 August 2022, clearing the way for an initial drilling program comprised of up to 60 reverse-circulation ("RC") drill holes from 30 drill pads located on various targets on the Navarre Creek claim block. The Navarre Creek Plan was approved under a Categorical Exclusion, meaning that it is categorically excluded from documentation in an Environmental Assessment or Environmental Impact Statement, for the following reasons: 1) the initial drilling program will be completed in one year or less, 2) the Navarre Creek Plan proposes less than one mile of new road construction (existing roadways will be utilized for access), and 3) the Navarre Creek Plan proposes use of overland equipment travel (low ground pressure equipment). The Company has reserved an RC drilling rig from Alford Drilling that is scheduled to arrive in June 2023.

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.

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 programs 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 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 Navarre Creek, a volcanic hosted precious metals target in a 14.48 sq km 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 Electra Battery Materials (formerly First Cobalt Corporation), Toronto, in respect of one of those properties.

Phoenix is listed on London's AIM (PXC), and trades on New York's OTCQX Market (PXCLF and PXCLY (ADRs)). 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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