Drilling Returns High-Grade Results

Phoenix Copper Limited / Ticker: PXC / Sector: Mining 

25 August 2020

Phoenix Copper Limited

('Phoenix' or the 'Company')

Red Star Core Drilling Returns High-Grade Silver &

Empire Mine Open Pit Gold Zone Drilling Continues to Show Robust Gold, Silver and Copper

Phoenix Copper Ltd (AIM: PXC, OTCQX: PXCLF), the AIM quoted, North American-focused base and precious metals exploration and development company, is pleased to announce the first analytical results from the Company's 2020 Red Star core drilling programme and further results from the reverse circulation ('RC') drilling programme at the Empire Mine open pit project in Idaho, USA (the 'Empire Mine').

(silver equiv = silver equivalent where the value of by-products metals are expressed as silver equivalent ounces per tonne)

Ryan McDermott, Chief Executive Officer, said, "I am pleased to present the first assay results from the Company's 2020 Red Star diamond drilling programme and additional assay results from the ongoing programme at the Empire Open Pit Gold Zone.  

"The results from the first six Red Star core holes confirm the orientation and continuation of the high-grade silver and lead system, both down-dip and to the south of the discovery outcrop, which was first discovered in our 2018 exploratory RC drilling programme.  Especially noteworthy are the results from core holes RSD20-01 and RSD20-03, with 1.5 metre intercepts of 204 g/t (6.56 oz/tonne) silver and 2.31% lead, and 360 g/t (11.57 oz/tonne) silver and 7.79% lead, respectively, though numerous other silver intercepts in excess of 115 g/t (3.70 oz/tonne) were received. 

"Our team is currently evaluating these latest analytical results, along with the significant geological and mineralogical information gained from the core and is targeting the next round of drill holes which are scheduled for this autumn. The Red Star area is geologically complex with a general lack of surface outcroppings and we have determined that the most successful exploration is best achieved through short drilling programmes, followed by evaluation of new data prior to additional targeted drilling.  

"The results from the continuing Empire Mine Gold Zone programme are also particularly encouraging.  RC drill hole KX20-09 returned 6.1 metres of 2.05 g/t gold and KX20-15 returned a gold value of 9.78 g/t over 1.5 metres.  Of particular interest, in addition to gold, are the elevated silver and copper values shown throughout all of the drilling.  Drill hole KX20-18 returned 1.5 metres of 508 g/t silver with 2.41 g/t gold and 6.13% copper, and holes KX20-19 and KX20-20 both showed values above 140 g/t silver, with copper intercepts above 4%.

"These results are not unusual given the polymetallic nature of the Empire Mine and are vitally important in understanding the connection between the near surface, high-grade polymetallic oxide zones and the connection with the deeper, high-grade polymetallic sulphide vein system. These latest results complement our previously reported high-grade RC drilling and channel sampling programmes.  Once our team has evaluated these latest results, additional drilling locations will be targeted with the aim of continuing the drilling programme into late Q3.  The Empire Mine resource will be re-modelled in Q4 2020 and will include the gold, silver and copper assays from the 2020 drilling programme.

"The Phoenix team has remained healthy and productive over the past several months due in large part to the adherence to our strict COVID-19 procedures and protocols that we established in April. However, some business sectors are experiencing a new and slower "speed of business" as they adjust to the changing conditions caused by the pandemic. I want to thank everyone for their patience, and I look forward to keeping shareholders informed as soon as additional drilling and sampling results become available."   

Red Star Drilling Update

Phoenix has completed 10 drill holes for a total of 455 metres of HQ-diameter diamond drilling at Red Star thus far in 2020. All drill samples have been delivered to the ALS Global laboratory in Nevada. The drill hole results received to date are from core holes RSD20-01 through to RSD20-06.  RSD20-07 through to RSD20-10 are pending.  Additional core drilling is planned at Red Star beginning in Q3 2020 following the evaluation of the first 10 core holes.

Table 1 - Red Star Drilling Results

Empire Mine Drilling Update

Phoenix has completed a total of 1,658 metres of drilling at Empire in 2020. To date this consists of 1,550 metres of RC drilling and 108 metres of diamond drilling. All drill samples have been delivered to the ALS Global laboratory in Nevada. The drill hole results received to date are from RC drill holes KX20-01 through to KX20-21. The results for RC drill holes KX20-22 through to KX20-30, and diamond drill holes KXD20-01 and KXD20-02, are pending. Additional RC and core drilling is planned at Empire beginning in Q3 2020 following the evaluation of the first 32 drill holes.

Table 2 - Empire Drilling Results   

Other Results Pending Analysis

There are currently nine Empire RC holes and two Empire core holes, as well as four Red Star core holes, 30 Empire channel samples, and 25 Navarre Creek rock chip samples awaiting assay results. Results from these samples will be reported as they are received.

Red Star - Silver and Lead Resource and Drilling Programme

Red Star is located approximately 330 metres north-northwest of the Empire open pit resource area within the Empire patented claim boundary.  This boundary is contiguous with the Horseshoe Block to the north and west. A map showing the area can be found on the Company website at www.phoenixcopperlimited.com in the "News" section.  The Red Star Zone was discovered during field mapping and reconnaissance of the northern patented claim boundary and adjacent Horseshoe Block.  Channel samples were collected from the Red Star outcrop itself and results reported by the Company in October 2018.  Three RC drill holes targeting the area at depth were completed and assay results were published in December 2018.  In May 2019, Hard Rock Consulting estimated a maiden inferred resource at Red Star of 103,000 tonnes grading 173.4 g/t silver, 0.85 g/t gold, and 3.85% lead, with minor copper and zinc.  

Empire Mine - Gold and Silver Resource and Drilling Programme

In May 2020, an updated NI 43-101 compliant resource was completed by Hard Rock Consulting and reported for the polymetallic Empire Mine open-pit oxide deposit.  The updated resource contained measured, indicated, and inferred metal content of 130,000 tonnes of copper, 342,000 ounces of gold, 9.5 million ounces of silver and 50,550 tonnes of zinc.  The May resource showed an increase in all metals, but particularly gold and silver, which increased 56% and 13%, respectively, from the previous May 2019 resource.  Resource report details can be found on the Company's website at www.phoenixcopperlimited.com/news and www.phoenixcopperlimited.com/research.

As a result of the May 2020 resource update, and the favourable ammonium thiosulfate gold and silver recovery tests reported in June 2020, the Company initiated a RC drilling programme targeting potential extensions to the gold and silver mineralisation identified in the report, as well as targeting areas of inferred mineralisation in an attempt to upgrade to measured and indicated.  The current RC drilling is focused on the area adjacent to a 2018 channel sample that assayed 36 g/t gold.

Qualified Person

The information in this announcement has been reviewed by Roger Turner A.C.S.M., M.Sc., M.I.M.M.M., C.Eng., Chief Technical Officer and Director of the Company. Mr Turner is a graduate mining engineer from the Camborne School of Mines with an MSc in Economic Geology from Leicester University with more than 40 years' experience in mine development, construction and operation and is a qualified person under the AIM Rules. Mr Turner 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 future Environmental, Social, and Corporate Governance (ESG) platform.

 Market Abuse Regulation (MAR) Disclosure

Certain information contained in this announcement would have been deemed inside information for the purposes of Article 7 of Regulation (EU) No 596/2014 until the release of this announcement.

Contacts

For further information please visit www.phoenixcopperlimited.com or contact:

Notes

Phoenix Copper Limited is a North American focused, base and precious metal explorer and developer, which has carried out a drilling programme and generated a copper, gold, silver and zinc resource on which it is carrying out a feasibility study to bring the historically producing Empire Mine in Idaho, USA, back into production. It is also evaluating the silver and gold resources around three other past producing mines within the 23 km² Empire claims block as well as cobalt in two claims blocks north of Empire in Idaho.

Phoenix's primary operations are focused near Mackay, Idaho in the Alder Creek mining district. This district includes the historical Empire, Horseshoe, White Knob and Blue Bird Mines, past producers of copper, gold, silver, zinc, lead and tungsten from underground mines in the first half of the twentieth century. Additionally, the district includes Navarre Creek a Carlin-trend gold discovery which hosts a 6.1 km gold strike length within a 9.8 km² area.

Phoenix acquired an 80% interest in the historical Empire Mine property in 2017 and, based on a total of 320 drill holes, an oxide resource was completed in late 2017. A NI 43-101 compliant PEA (preliminary economic assessment) for an open pit heap leach solvent extraction and electrowinning ("SX-EW") mine was completed in April 2018. In 2018 a further 8,600 metres in 93 holes was completed to upgrade the oxide resources, provide samples for ongoing metallurgical test work, geotechnical and hydrological studies and condemnation drilling for the heap leach pad site, waste dump and plant site. An updated NI 43-101 compliant resource was completed in early May 2019, which was generated for a heap leach copper SX/EW operation where only copper was recovered. A further updated NI 43-101 compliant resource was generated in May 2020 for all metals, which resulted in an increase of measured and indicated resources of +56% gold, +11% copper, +13% silver and +26% zinc. Present contained metal in all NI 43-101 compliant categories of resources, measured, indicated and inferred, stand at 342,249 ounces of gold, 129,923 tonnes of copper, 9,502,494 ounces of silver and 50,550 tonnes of zinc. 

Since acquiring the Empire project, Phoenix has increased the claim area from 818 acres to 5,717 acres, mainly to the northwest and west, and in so doing has increased the potential for additional oxide and sulphide copper resources, as well as the potential for stand-alone gold and silver resources, along a strike length of approximately 5.4 km towards the other brownfield mines of the Horseshoe, White Knob and Blue Bird Mines now within the property boundary. In particular, a new discovery at Red Star, 330 metres north west of the Empire Mine proposed open pit, has revealed 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.

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.

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