Red Star Update

Phoenix Copper Limited / Ticker: PXC / Sector: Mining 

16 November 2020

Phoenix Copper Limited

('Phoenix' or the 'Company')

Red Star Update

Structural geology report confirms the significant potential at the Red Star silver deposit  

& Total Voting Rights

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 publication of the independent report "Geologic Mapping and Structural Analysis in the North Pit Region, Mackay Mining District" (the "Report") focusing on the Red Star silver project ("Red Star") by David W. Rodgers, Ph.D., Consultant Structural Geologist to Phoenix.

Highlights:

-      The Report confirms the potential of further high-grade silver and lead at Red Star

-   The Report confirms the likely extension of Red Star through to the historically mined high grade Horseshoe and White Knob claim blocks

-     The Report highlights the association of high-grade silver mineralisation with the magnetite-bearing skarn formation, thus allowing a magnetic geophysical survey to optimise an ongoing targeted drilling programme

Dr. Rodgers is familiar with the geology of the Company's Empire Mine property and the local region. He was the structural geology professor in the Idaho State University (ISU) Department of Geology from 1985 to 2010, Associate Dean of ISU College of Science and Research from 2010-2018, and is currently the Associate Vice-President for Research at ISU.  During Dr. Rodgers' tenure as a structural geology professor, he mapped extensively in the Central Idaho area, including the more distal extents of the same rock formations present at the Company's Empire Mine.   

Ryan McDermott, Chief Executive Officer, said, "I am pleased to provide this update for our Red Star project and present the findings of Dr. Rodgers' report, specifically as it is related to future exploration and drill hole targeting. We are particularly excited by the similarity recognised between Red Star and the historically mined Horseshoe and White Knob claim blocks, and the potential of an extension between the two. The historically mined high grade Horseshoe and White Knob claim blocks produced average grades of 204 g/t silver, 19% lead, 6.5% zinc and 0.73% copper.

"In 2018, Phoenix collected rock chip and channel samples from the Horseshoe Mine claim block.  The results of the sampling programme were reported in October 2018 and showed results as high as 9.19% copper, 580 g/tonne silver, and 20% lead.  This clearly opens up another significant prospect within the Empire ore system. Whilst we construct the Empire open pit copper / gold project we will continue to actively explore the Red Star and related area, with a view to early development of this exciting opportunity.

"Following our recent 10-hole drilling programme at Red Star, the Phoenix team evaluated the data from that programme, as well as the existing data from previous work. The drilling results from 2018 and 2020 were very promising, with silver grades as high as 1,100 g/tonne (32 oz/t) and lead grades above 21%.  However, we recognised the geological and mineralogical complexity of the project area, coupled with the lack of discernible outcrop, which created challenges for effectively targeting additional core holes.  As a result, we engaged Dr. David W. Rodgers, a Ph.D. structural geologist and Idaho State University geology professor, to complete high-resolution mapping of the project area and to assess the mineralogical characteristics of the deposit.  Dr. Rodgers completed his report, entitled "Geologic Mapping and Structural Analysis in the North Pit Region, Mackay Mining District" on 9 November 2020.  His report can be found on the Company website at www.phoenixcopperlimited.com in the "Reports" section.

"Following detailed surface mapping of the Red Star project area, which included some work southward toward the Empire Mine and northward toward  the historic White Knob and Horseshoe Mines, as well as detailed analysis of the Red Star core and drill cuttings, Dr. Rodgers concluded that higher grade silver and lead mineralisation occurs primarily in the contact region between the Mackay Granite formation and the White Knob limestone formation.  This is important in that mineralisation does not occur between these two formations elsewhere in the main Empire Mine area. 

"Furthermore, Dr. Rodgers concluded that the higher grade silver mineralisation was focused in areas within the magnetite-bearing skarn that had been subjected to a superimposed event, possibly highly acidic, wherein the later-stage silver-bearing fluids leached the magnetite skarn.  Because the silver mineralisation only occurs in iron-rich portions of the skarn, which are dominated by magnetite, then those areas near the contact of Mackay Granite and White Knob limestone with magnetite development are thought to be favorable targets for higher grade silver. 

"Because the lack of discernible outcrop at Red Star makes it difficult to determine the underlying geology, Dr. Rodgers has recommended the use of ground magnetic surveying, coupled with geologic mapping, to better define future drilling targets. The Company will therefore be scheduling a ground magnetics survey at the Red Star area as soon as weather and ground conditions permit, in order to optimize the next phase of the drilling programme."

Red Star - Silver and Lead Resource

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. In 2020, 10 HQ-core holes were completed at Red Star.  Core holes RSD20-01 through RSD20-04, and RSD20-06, returned assays of 116.9 g/tonne (3.76 oz/t) to 359.8 g/tonne (11.57 oz/t) silver and lead values from 1.17% to 7.79%, respectively.

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.

Update to Total Voting Rights

Further to the Company's Block Admission announcement on 6 October 2020, a further 127,258 ordinary shares of no par value have been issued as a result of ongoing warrant exercises. The total number of ordinary shares of no par value in the Company as at the date of this announcement is therefore 63,306,747 shares. For the purposes of the Disclosure Guidance and Transparency Rules, shareholders may use this figure as the denominator for the calculations by which they will determine if they are required to notify their interest in, or a change to their interest in, the issued share capital of the Company. No ordinary shares are held in Treasury.

 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 2020 and October 2020 for all metals. Present contained metal in all NI 43-101 compliant categories of resources, measured, indicated and inferred, stand at 355,523 ounces of gold, 129,641 tonnes of copper, 10,133,772 ounces of silver and 58,440 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.