Resource Report, Empire Mine Operational Update

Phoenix Copper Limited / Ticker: PXC / Sector: Mining 

9 December 2020

Phoenix Copper Limited

("Phoenix" or the "Company")

NI 43-101 Compliant Resource Report, Empire Mine Operational Update, New Corporate Presentation

Phoenix Copper Ltd (AIM: PXC, OTCQX: PXCLF), the AIM quoted North American focused base and precious metals company, is pleased to announce that the complete NI 43-101 "Updated Mineral Resource Estimate for the Empire Mine Project Custer County, Idaho USA" is now available on the Company's website at  www.phoenixcopperlimited.com.   The Company is also pleased to provide an operational update for the Empire Mine, and announces that an updated Corporate Presentation is now available on the website.

Ryan McDermott, Chief Executive Officer, commented: "I am pleased to announce that the completed NI 43-101 Resource Update Report is now available on the Company's website.  The updated resource shows a 19% increase in Measured and Indicated resource and a US$122 million increase in contained metal at a $3.00/lb ($6,612/tonne) copper price following a 32-hole drilling programme earlier this year. Including the Inferred resources, we now have 129,641 tonnes of copper, 58,440 tonnes of zinc, 10,133,772 ounces of silver and 355,523 ounces of gold.

"I would also like to provide an operational update for our Empire Mine open pit project.  Laboratory and bench scale metallurgical test work began on the Empire Mine magnetite ore this past summer as a follow-up to high-grade gold values encountered in drilling and channel sampling.  Leach testing using sodium cyanide and ammonium thiosulfate ("ATS") was conducted and specifically targeted gold and silver recovery.  It was concluded that the environmentally friendly ATS worked as well as sodium cyanide in the bench-scale tests, showing gold recoveries as high as 97.8%.  This test work was reported by the Company on 29 June 2020.

"In the time since the metallurgical testing was initiated, the price of copper has reached $3.50/lb ($7,714/tonne), the highest since February 2013. The copper at the Empire Mine open pit now represents approximately 60% of the contained metal value within the deposit.  As a result we are extending the metallurgical test work to focus on maximising the recovery of copper, alongside the optimal recovery of gold, silver and zinc. Noting that Goldman Sachs, JP Morgan and Jefferies all confirm that copper and gold are entering a commodities' bull market, further comprehensive metallurgical testing of all metals will therefore continue for a while longer in order to take full advantage of rising metal prices and to optimise the economics of the open pit project.

"The Company has shipped approximately 12 metric tonnes of ore material, a mix of multiple ore types, to the metallurgical lab for bench-scale and bulk pilot testing. When the initial testing is completed, the results will be used to estimate capital and operating costs for use in a Preliminary Economic Assessment ("PEA"), and ultimately be used to develop a full process design for the Empire Mine open pit deposit. While the bulk metallurgical test work will continue well into the ongoing feasibility study process, with continued refinement of the process design, I anticipate that the initial metallurgical test work on all metals necessary to complete the PEA level studies will be completed in the next few weeks, allowing us to complete and publish an updated PEA shortly thereafter.

"The Phoenix team remains fully engaged in metallurgical testing and metal recovery optimisation.  The results of this work are critical in the short and long term planning of the Empire Mine and, as always, I look forward to sharing the results as they become available.

"We are also pleased to announce the publication of our new Corporate Presentation on the Company website. This Presentation will be further updated when the PEA is completed."

Empire Mine open pit - 2020 Resource Update and Report

In compliance with NI 43-101 Standards of Disclosure for Mineral Properties, Section 4.2 (5) (iii), a  completed technical report for the 26 October 2020 resource disclosure has been filed and is available on the Company's website at www.phoenixcopperlimited.com/reports.  The updated resource estimate shows the following:

·    A 19% increase in the Measured & Indicated resource and a US$122 million increase in contained metal value as compared with the previous resource statement

·    A Measured and Indicated resource of 22.9 million tonnes comprised of -

o  Copper - 87,543 tonnes

o  Gold - 238,406 ounces

o  Silver - 7.59 million ounces

o  Zinc - 43,871 tonnes

Hardrock Consulting ("HRC") estimated this updated NI 43-101 compliant resource using the value of all gold, silver, copper and zinc in the deposit using a cut-off grade of 0.292% copper equivalent oxide, and 0.497% copper equivalent sulphide, and is tabulated as follows:

The mineral resources for the 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.

Pilot-Scale Metallurgical Testing

As part of the Company's ongoing Empire Mine work programme, a bulk sample was collected from outcrops near the location of channel samples analysed in 2018. The head-grade of the initial bulk sample assayed at 12.8 grammes per ton gold.  The sample was submitted to AuRIC Metallurgical Laboratories in Salt Lake City, Utah for cyanide-alternative laboratory and bench scale agitated-tank leach testing.

AuRIC performed four laboratory scale amenability tests and two bench scale extraction tests using sodium cyanide lixiviant, and four laboratory scale amenability tests and two bench scale extraction tests using the non-toxic ammonium thiosulfate lixiviant, on splits from the primary sample.  The results of this test work indicate that ATS works equally as well as sodium cyanide on both the laboratory scale samples (30 grammes to 250 grammes) and the bench scale samples (3,000 grammes). Gold recovery using ATS on the two bench samples resulted in 97.8% and 97.7%, and silver recovery was 69.8% and 78.2% after six hours of leaching.  ATS reagent consumption for both tests was 4.32% and 4.42%, respectively.  

By comparison, the sodium cyanide gold recoveries on splits of the same sample were 97.8% and 97.7%, and silver recoveries of 68.1% and 65.5% following six hours of leach time.  The sodium cyanide reagent consumption for both tests was 6.00%. A detailed laboratory report titled "Laboratory and Bench Scale Metallurgical Extraction Tests Performed Using Sodium Cyanide and Ammonium Thiosulfate Leaches on a Composite Sample of Magnetite Ore from the Empire Mine, Custer CO, ID" was reported by the Company on 29 June 2020 and can be viewed on the Company's website at www.phoenixcopperlimited.com/research.

Following the 29 June 2020 reporting, the Company has shipped approximately 12 metric tonnes of samples representing various ore types from the Empire Mine open pit deposit.  Bulk pilot testing and the development of metal recovery and process design elements have been ongoing.

An updated Preliminary Economic Assessment for the Empire Mine Open Pit Project based on this updated resource and metallurgical testing results is anticipated in early Q1 2021.

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 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.