INTERIM CHAIRMAN'S STATEMENT

Dear Shareholders,

On behalf of the Board, I'd like to make an unreserved apology for the events referred to in our announcements of 9th February and 9th March 2026, whereby our former Executive Chairman and former Chief Financial Officer made unauthorised payments to Lloyd Edwards-Jones SAS ("LEJ") without the current Board's knowledge or approval ('the LEJ payments'). These payments took place over a 9-year period since the initial IPO and were unknown and unauthorised by any other Board member, past or present. These payments were uncovered internally, and the Board took immediate steps to suspend the two individuals involved while the Board undertook a full investigation, the results of which have been fully reported to our professional advisers, and the financial reporting impact has been disclosed in note 16. Following the investigation the Company terminated the former Executive Chairman and former Chief Financial Officer's employment and removed their directorships with immediate effect. This action was taken following a robust disciplinary process overseen closely by the Company's legal counsel.

The LEJ payments were accounted for as commissions on financing transactions and amounted to $1,746,145. They were made between the years 2017 to 2024 with a further unauthorised payment of $21,440 made in 2025. For clarity: no other Phoenix director, past or present, has improperly benefited from shareholders' funds.

The Group's consolidated financial statements have been restated to reverse $1,746,145 of the unauthorised LEJ payments made between 2017 to 2024 as disclosed in note 16. The additional unauthorised payment of $21,440 made in 2025 has been written off in the year.

The Company is taking active steps within the law to seek reimbursement of the unauthorised payments from Marcus Edwards-Jones and Richard Wilkins. These proceedings are at an early stage. We have received a repayment of $40,000 in 2026, this recovery and other potential recoveries, net of projected expenses, will be included in the financial statements for the current year ending 31 December 2026. The Board considers that further recovery is uncertain and may not exceed legal expenses to be incurred by the Company.

The investigation also uncovered other unauthorised payments amounting to $0.64 million, the majority of which was paid to a third-party intermediary in connection with potential additional issues of 10-year copper bonds. These payments were also made without Board knowledge or approval.  The remainder was directed to various brokers and to a public relations firm after the Board had formally resolved that these payments should cease. The Company is also seeking to recoup these additional unauthorised payments. The financial statements have not been restated for these additional unauthorised payments, as they were not made to entities where Marcus Edwards-Jones or Richard Wilkins had an interest and are already presented in the consolidated income statement.

Our stakeholders have justifiably questioned how these transactions were able to occur in a business with appropriate corporate governance safeguards. The specific control weakness identified was that dual control of the bank mandate was held by the two individuals in question. As a Board, we have resolved that bank statements will be circulated to all Board members monthly along with reconciled monthly management reports, to ensure full transparency of all cash movements.

We believe that these actions will significantly strengthen the Group's control environment going forward. The Board also reaffirms future adherence to the Corporate Governance code. The Board is satisfied that the governance weaknesses were isolated and has taken the steps outlined above to mitigate against the possibility of a recurrence.

As a Board, we have taken steps to engage with shareholders personally, to reassure them that those of us who remain are committed to stabilising the Company progressing the development of the Empire Mine and related mining properties. To continue this development requires the Company to consider additional sources of finance to progress the development of the mine, the next stage of which is to conclude the necessary final engineering design. The macro-economic environment and current metals prices are in our favour, and the excellent economics of the Empire Mine and related mining properties remain as compelling as ever. The CEO's statement includes a comprehensive explanation of how we plan to move the project forward.

All shareholders, irrespective of the size of their holding, are welcome to email me or Ryan McDermott to request a call.

The Phoenix team is delighted to welcome David Jarvis to the Board. David is a highly experienced mining engineer and has been working with the Company since 2023. I would also like to take this opportunity to wish two key members of our advisory board, Dennis Thomas and Andre Cohen, all the very best following their retirement, and to thank them both for their immense contribution to the Company over the years.

We look forward to updating you with our operational progress in the months to come.

Catherine Evans

Interim Non-Executive Chairman

18 June 2026

CHIEF EXECUTIVE OFFICER'S REPORT

The Interim Chairman's statement presented a detailed summary of the actions of the Company's two former directors and Company's response to those actions.  Despite their actions, the mining assets in Idaho, specifically the Empire Mine, did not suffer any loss of mineral resources or reserves.   The same quantity of viable copper, gold and silver reserves at Empire has remained unchanged, as has the mineral potential on our surrounding exploration projects.

Our path forward is quite simple.  Funding - detailed engineering - permitting - construction - production. Our consultants were able to get a good start on detailed engineering at the end of 2024 following the publication of the PFS and prior to placing them on standby for funding reasons. We have continued to collect baseline environmental data, including completion of the Waste Rock Facility and Access Road archaeological surveys, all of which will feed into the final engineering and the Plan of Operations for the permitting submittal.  Additionally, the Idaho team completed the required 2025 reclamation work in the Navarre Creek area. The Company's assets, including our mining claims, buildings, and equipment continue to be maintained.

Metal prices have held at near all-time highs since the publication of the PFS in September 2024. The cash flow model presented in the PFS for the Empire Open-Pit used trailing average pricing for copper, gold, and silver, and were $4.45/pound copper, $2,325/oz gold, and $27.25/oz silver, respectively. As of now, (June 2026), copper is trading at $6.33, gold is $4,348, and silver $68.11. Should metal prices maintain these levels during production, the cumulative net free cash flow will improve significantly from the already favorable PFS cash flow.

As I mentioned before, the quantity of copper, gold and silver in the Empire asset has not changed since the publication of the PFS.  The processing plan remains as crush-grind-flotation-tank leach-cementation circuit which will recover all three metals from our Empire ore.  The processing facility has been engineered with a small enough footprint for siting on the Company's patented mining claims near the open pit.  The proximity of the mill to the open pit reduces the haulage distance of the ore to the crusher, which requires a smaller mining fleet in terms of truck count and size, thereby reducing both capital and operating costs. The mill will produce two pay streams, a copper, gold, silver concentrate stream and a cement copper stream, both of which will be shipped to market without the need for further processing or refining at the Empire site.

In addition to processing ore from the Empire open pit, the flotation circuit is being designed to effectively recover copper, gold, and silver as a concentrate from the higher-grade sulphide vein material that exists below the open pit and was mined extensively until the early 1940s.  Exploration planning of the deeper sulphide vein system is ongoing and subject to funding. Known sulphide mineralization includes the 8.38% copper interval intercepted in the 2021 core drilling program, which also assayed 1.31 grammes per tonne ("g/t") gold and 120 g/t silver. Historically mined grades from the sulphide vein system below the open pit were recorded as high as 8% copper, with smelter recoveries at the time recorded as averaging 3.64% copper, 1.64 g/t gold, and 54 g/t silver. 

2024 Empire Proven and Probable Mineral Reserves

A Proven and Probable reserve estimate was completed by Hardrock Consulting in April 2024 and reported for the polymetallic Empire Mine open pit oxide deposit. The estimate reports Proven and Probable reserves in the Empire open-pit oxide deposit of 10,097,000 tonnes containing 49,677 mt of copper, 104,000 oz of gold, and 4,654,400 oz of silver, for a combined 66,467 mt of copper equivalent metal. It was estimated using assay data from 485 drill holes, extensive geological modelling, metallurgical recovery test work, geotechnical evaluation, and mine design.

Mineral Reserve Statement for Empire Mine, after Hard Rock Consulting April 2024

Fully diluted tonnes at a Net Smelter Return ("NSR") cut-off of $22.59/mt

The mineral reserves reported herein for the Empire project have been estimated in a manner consistent with the NI 43-101 Committee of Mineral Reserves International Reporting Standards ("CRIRSCO"), of which both the Canadian Institute of Mining, Metallurgy and Petroleum ("CIM") and Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (the "JORC Code") are members.

2024 PFS - Summary of Economic Results

The economic analysis of the base case scenario for the Empire open pit mine uses metal prices of $4.45/lb for copper, $2,325/oz for gold and $27.25/oz for silver. The economic model shows a pre-tax NPV of 7.5% of $87.86 million using a $22.59/tonne NSR cut-off, as well as a pre-tax IRR of 46.4%. The table below summarises the projected cashflow, NPV at varying rates, IRR, years of positive cash flows to repay the negative cash flow ("Payback Period"), and multiple of positive cash flows compared to the maximum negative cash flow ("Payback Multiple") on both after-tax and before-tax bases.

The metal prices used in the PFS economic analysis were based on near-term trailing averages at the time the PFS was being written and were considered to be conservative.  The Company will consider re-evaluating these lower metal prices as part of the final detailed engineering work and if determined prudent will re-optimize the economics using higher updated metal prices.

PFS - Metallurgy and Process Design

3,502 feet (1,067 metres) of core from the Empire copper oxide deposit was sampled and evaluated for the metallurgical recovery of copper, gold, and silver. The results of the metallurgical test work, as presented in the PFS, show that a crush-grind-flotation-tank leach milling process provides the optimum metal recoveries for the cost. The flotation-leaching circuit that has been designed for the Empire open pit ore has a much smaller footprint than a classic heap leach design, allowing for the processing plant to be sited on the Company's patented (private) mining claims near the open pit.  The proximity of the plant to the open pit will reduce overall operating costs by reducing the ore haulage distance.  The improved haulage cycle-time gained from the shortened haulage distance also allows for the use of smaller, less expensive haul trucks.

In addition to the cost benefits of a smaller footprint plant sited on private land, the flotation-leaching circuit will be capable of processing sulphide material currently being explored elsewhere on the Empire property.  From an environmental permitting standpoint, siting the processing plant on private land should help to simplify the overall permitting process.

The flotation + leaching metallurgical recovery results and reserve pit optimization parameters are shown in the table below. Optimization of the processing circuit will be an important part of the final detailed engineering.

Red Star - High grade silver Inferred Resource

Red Star is a high-angle silver-lead vein system hosted in andradite-magnetite and located 330-metres north-northwest of the Empire oxide pit.  Red Star was identified from a 20-metre wide surface outcrop across a skarn structure.

In May 2019, the Company announced a small maiden Inferred sulphide resource of 103,500 tonnes, containing 577,000 ounces of silver, 3,988 tonnes of lead, 957 tonnes of zinc, 338 tonnes of copper, and 2,800 ounces of gold, as summarized in the table below.

Navarre Creek Gold Claim Block

During the summer of 2023, 28 reverse-circulation drill holes were completed into four (4) target areas within the 16.18 square kilometer Navarre Creek gold claim block. Drilling at two of the four target areas resulted in the identification of continuous, low-grade gold mineralization ranging from 4.5 metres to 22.9 metres thick in the Lehman Creek target area, and anomalous silver and antimony along a structure in the west fork of Navarre Creek.

The initial assays from the two Navarre Creek targets showed low-grade mineralization worthy of further investigation. As a result, an additional 400 acres of unpatented mining claims were staked to the south-west of the Lehman Creek fault target, expanding our Navarre Creek claim block to 197 unpatented claims covering 4,070 acres.

Empire Mine Expansion - Horseshoe, Whiteknob, and Windy Devil

The Horseshoe, Whiteknob, and Windy Devil claim blocks, located immediately north of the Empire Mine project, are situated within the core of the Empire mineralization and remain attractive exploration targets. The core Empire claim group has grown to 8,434 acres (34.13 sq kms) by expanding north to the former Horseshoe and Whiteknob Mines and onto Windy Devil. This expansion covers approximately 30 historic adits, shafts and prospects, which exhibit geology and mineralogy similar to Red Star, and which will be the subject of further exploration going forward.

Idaho Cobalt Belt - Redcastle and Bighorn Projects 

The Company owns two strategically located properties on the Idaho Cobalt Belt in Lemhi County, Idaho: Redcastle and Bighorn. The Redcastle property is held by Borah Resources, our 100% owned, Idaho registered subsidiary. In May 2021, the Redcastle holding was signed to an earn-in agreement with Electra Battery Materials Corporation, the Toronto-based owner of the Iron Creek Cobalt Mine, which shares a common border with the Redcastle property. The earn-in agreement with Electra Battery Materials on the Company's Redcastle cobalt project was renewed and extended in mid-2024.

The Bighorn property, located on the northern end of the Idaho Cobalt Belt, is held by Salmon Canyon Resources, another 100% owned, Idaho registered subsidiary. 

In addition to copper, cobalt is a critical metal for electric vehicles and global electrification projects.  Cobalt deposits are rare, particularly in first world jurisdictions. The Company's cobalt projects are located in the USA's only prospective cobalt region, the Idaho Cobalt Belt, approximately 100 miles north of the Empire Mine. In 2018 we announced the results of our 2017 reconnaissance program of 46 surface grab samples which gave cobalt values ranging from 2 parts per million to 0.31% cobalt.  

Outlook

With copper prices holding above $6.00/lb, gold above $4,000/oz, and silver above $60/oz the outlook for mining and milling at Empire is outstanding.  Despite the recent challenges faced by the Company, the Empire mineral reserve remains intact. 

The Phoenix team has a singular focus, that being to move the Empire project through final engineering and permitting, and ultimately into production.  The demand for metals on a global scale continues to be strong, particularly from domestic sources in mining friendly jurisdictions like Idaho.

Conclusion

I understand the shock and disappointment experienced by all stakeholders at the actions of the Company's former directors and I want to extend my unreserved apologies. The bright light at the end of this long, challenging tunnel is the fact that their actions have not impacted the copper, gold and silver mineral reserves at the Empire Mine.  The metal is still in the ground and the mining and processing design developed by our consultants for the PFS is still very much applicable. I believe this fact alone will be our saving grace.

Thank you to all of our stakeholders for your continued support, understanding, and patience. The focus of our team is on the road ahead, not on the road behind.

Ryan McDermott

Chief Executive Officer

18 June 2026