Update on ExGen Carried Interest Agreement

Phoenix Copper Limited / Ticker: PXC / Sector: Mining

18 December 2024

Phoenix Copper Limited

("Phoenix" or the "Company")

Phoenix and ExGen Announce Updated Carried Interest Agreement

Phoenix Copper Limited (AIM: PXC; OTCQX ADR: PXCLY), the AIM-quoted, USA-focused base and precious metals emerging producer and exploration company, is pleased to announce an update on its agreement of 15 July 2015 (as subsequently amended) with ExGen Resources Inc (TSX.V: EXG) ("ExGen") and Konnex Resources Inc. ("Konnex") (the "2015 Agreement").

Phoenix owns 80% of Konnex, the Idaho registered corporate vehicle that owns and is developing the Empire Open-Pit Project in Custer County, Idaho, USA, to produce copper, gold and silver (the "Project"), via its wholly owned subsidiary, KPX Holdings Inc ("KPXH"). ExGen owns the remaining 20% of Konnex.

Following recent discussions, Phoenix, ExGen, Konnex and KPXH have signed a further amendment to the 2015 Agreement to include a carried interest arrangement, which simplifies the obligations of Phoenix and ExGen in relation to the Project (the "2024 Amendment"). Under the 2024 Amendment:

·      Phoenix will no longer be required to make an annual payment to ExGen, or meet a minimum required annual spend on the Project;

·      Phoenix will no longer need to provide ExGen with a bankable feasibility study before requiring ExGen to fund 20% of the Project's construction costs; and

·      Phoenix intends to fund ExGen's contribution to the Project's construction costs through a shareholder loan, which will be provided directly to Konnex. It is intended that the loan, plus interest, will be repaid to Phoenix from ExGen's share of the Project's future cash flows. Further details of this shareholder loan, including quantum and key terms, will be announced once agreed between the parties and funding has been finalised by Phoenix.

In addition, Phoenix will retain its Honolulu royalty and mining claims and Mackay royalty, as acquired and announced on 27 October 2021. Any further royalties or mining claims that are acquired in the future, by either Phoenix or KPXH, will be offered for transfer to Konnex in accordance with the terms of the 2015 Agreement and this 2024 Amendment.

Ryan McDermott, Chief Executive Officer, commented: "I am pleased to have reached an agreement with our partners at ExGen that significantly simplifies our relationship, and enables the construction of the Empire Open-Pit to be funded by one co-ordinated shareholder loan managed by Phoenix, rather than two shareholder loans on potentially different terms. Both parties look forward to working together to bring the Project into profitable production as soon as possible and I look forward to providing our shareholders with further updates in due course."

Related Party Transaction

Konnex is a subsidiary of the Company and the Executive Directors of Phoenix and Jason Riley are also Directors of Konnex. Jason Riley is also CEO of ExGen. As such, the 2024 Amendment constitutes a related party transaction for the purposes of AIM Rule 13.

Catherine Evans, a Non-Executive Director of Phoenix who is deemed independent for the purposes of AIM Rule 13, considers having consulted with SP Angel Corporate Finance LLP, the Company's nominated adviser, that the 2024 Amendment is fair and reasonable in so far as the Company's shareholders are concerned.

Market Abuse Regulation (MAR) Disclosure

The Company deems the information contained within this announcement 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 the Regulatory Information Service, this inside information is now considered to be in the public domain.

​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 to further 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.

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

Notes

Phoenix Copper Limited is an emerging producer and exploration company specialising in base and precious metals, with an initial focus on copper, gold, and silver extraction from an open-pit mining operation within the United States.

Located in the historic Alder Creek mining district near Mackay, Idaho, Phoenix's flagship asset is the Empire Mine, in which the Company holds an 80% ownership stake. The historic Empire underground mine, located beneath the surface of the Company's proposed open pit, boasts a rich history of producing high-grade copper, gold, silver, zinc, and tungsten.

Since 2017, Phoenix has executed extensive drilling initiatives, resulting in an expansion of the Empire Open-Pit resource by over 200%. In May 2024 the Company published its inaugural mineral reserve statement for the Empire Open-Pit Mine. Proven and Probable mineral reserves are 10.1 million tonnes containing 109,487,970 lbs of copper, 104,000 oz of gold and 4,654,400 oz of silver. This reserve was estimated using assay data from 485 drill holes, extensive geological modelling, metallurgical recovery test work, geotechnical evaluation, and mine design. The reserve represents a combined 66,467 tonnes of copper equivalent metal.

In addition to the Empire Mine, Phoenix's holdings in the district also encompass the Horseshoe, White Knob, and Blue Bird Mines, all of which have been producers of copper, gold, silver, zinc, lead, and tungsten from underground operations, a new high-grade silver and lead orebody at Red Star, and the Navarre Creek gold exploration project, which was first drilled in 2023. The Company's land package at Empire spans 8,434 acres (34 sq km).

Phoenix also owns two cobalt properties situated along the Idaho Cobalt Belt to the north of Empire. An Earn-In Agreement has been established concerning one of these 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/