Empire Mine Open Pit Feasibility Study Update

Phoenix Copper Limited / Ticker: PXC / Sector: Mining 

28 January 2021

Phoenix Copper Limited

("Phoenix" or the "Company")

Empire Mine Open Pit Feasibility Study Update

Navarre Creek surface sampling results confirm presence of volcanic hosted, Carlin-type gold mineralisation

Phoenix Copper Ltd (AIM: PXC, OTCQX: PXCLF), the AIM quoted North American focused base and precious metals emerging producer and exploration company, is pleased to provide this operational update for the Empire Mine.  The Company is also pleased to announce the results of the 2020 Navarre Creek sampling programme. More information on the Navarre Creek project is available on the Company's website at  www.phoenixcopperlimited.com.

Highlights

 Empire Mine Open Pit

-      Optimisation of the Empire Mine open pit economic model and feasibility study materially advanced, including:

-      Cut-off grades and scale of operations

-      Cathode copper and zinc production from heap leach or agitation leach processing

-      Gold and silver production from second stage heap leach or agitation leach processing using environmentally friendly ammonium thiosulphate instead of cyanide

-      Metallurgical testwork and updated preliminary economic model nearing completion

Navarre Creek

-      Surface sampling results confirm presence of volcanic hosted, Carlin-type mineralisation along selected sections of the 6.1 kilometre strike length

-      Majority of samples detect gold and silver, with gold grades as high as 0.569 grammes per tonne ("g/t"), exceeding expectations

-      Surface grades of gold are consistent with historical early-stage exploration grades reported from volcanic hosted deposits in the Carlin trend that host multimillion ounce deposits in Nevada

-      Follow up sampling, geophysics, and drilling scheduled for 2021

Ryan McDermott, Chief Executive Officer, commented: "I am pleased to provide this positive operational update on our Empire Polymetallic Open Pit Mine, as well as exciting initial results from the Navarre Creek gold project.

"We have focused on the metallurgical testwork since October 2020 with  laboratory and bench scale leach testing of the magnetite ore using sodium cyanide and ammonium thiosulfate ("ATS") which was conducted to specifically target precious metals.

"ATS, the environmentally friendly alternative to cyanide, was shown to be as effective as cyanide, with laboratory gold recoveries as high as 97.8%. As it is our intention to produce the full range of metals reported in the mineral resource, we are targeting precious metals recovery using ATS and SX-EW to recover copper and zinc. Current commodity prices make a compelling backdrop to recover the full suite of Empire metals.

"Following the preliminary ATS testing, the Company shipped 12-tonnes of samples from Empire to the laboratory to be used for a variety of metallurgical tests.  The samples are comprised of a combination of Empire ore types. As a result of this positive testwork, a number of favourable processing and production scenarios present themselves. We are now currently in the final stages of optimising the project with regard to scale of production, metal grades and recoveries, capital and operating costs and, of course, timing.

"Inevitably, we have suffered from several Covid-19 related delays that have unfortunately slowed progress. However the laboratory is processing the results as fast as it can, and Colorado based Forte Dynamics is using those results in the ongoing development of an all-metal recovery process that will be used as the framework for updating our August 2019 economic model, and for the future engineering and development of the Empire Mine Open Pit project.

"We believe these continued evaluations will be beneficial to our overall project, and we expect the initial results of this optimisation process to be published shortly, as we advance towards a Preliminary Feasibility Study as quickly as possible.

"Also, it is with particular pleasure that I also announce the initial results of the 2020 Navarre Creek surface sampling programme.  The Navarre Creek claim block to the north west of the Empire Mine was acquired in 2019 and attracted our attention as the geology appeared to be similar to volcanic hosted gold deposits on the Carlin Trend in Nevada, home to several multimillion ounce gold deposits.

"Of the 90 samples, 53 were above the detection limit for gold with a high of 0.569 g/t, and 25 were above the detection limit for silver.  There was also a strong correlation between elevated gold values and elevated antimony values, which is a known marker in Carlin-type gold systems. With the exception of one sample, all samples with a gold value greater than 0.1 g/t were noteworthy in that they occur within the same alteration type, being predominantly a jasperoid-hosted quartz stockwork and micro-veining system. This provides valuable information for future sampling and drill targeting.   

"The 90 samples collected are part of our initial surface reconnaissance exploration programme.  Volcanic outcropping in the Navarre Creek area is strongly weathered and highly leached to depths of two to four metres. As such, the gold grades in these initial geochemical Navarre Creek samples are anomalously high and indicative of higher-grade values in less weathered rocks below the surface oxidised zone. These results are similar to the historic grades encountered in the early exploration phases of the now multimillion ounce deposits on the Carlin Trend in Nevada.

"Follow up sampling, geophysics, and drilling are scheduled for 2021. Photographs of the volcanic rocks at Navarre Creek can be viewed on the Company's website at www.phoenixcopperlimited.com. Table 1 below shows the analytical results for gold, silver, and antimony.

"I look forward to publishing further updates as we progress at Empire, as well as updates relating to our planned upcoming field work at Navarre Creek, and Red Star."

Navarre Creek 2020 exploration programme

The Navarre Creek claim block to the north west of the Empire Mine was acquired in 2019 as a project where the geology appeared similar to volcanic hosted gold deposits on the Carlin Trend in Nevada, home to several multimillion ounce gold deposits.

During the summer of 2020, Konnex Resources' exploration team mapped and sampled the Company's Navarre Creek property, which is comprised of 9.79 square kilometres (2,420 acres) of unpatented mining claims and is located approximately five kilometres north-northwest of the Empire Mine.  90 rock chip and grab samples were collected in the hydrothermally altered volcanic rocks that make up the Navarre Creek claims and sent to ALS Laboratories in Reno, USA for geochemical analysis.

Of the 90 samples, 53 were above the detection limit for gold with a high of 0.569 g/t, and 25 above the detection limit for silver.  There was also a strong correlation between elevated gold values and elevated antimony values, typical in Carlin-type epithermal gold systems.  With the exception of one sample, all samples with a gold value greater than 0.1 g/t occur within the same alteration type, that being predominantly a jasperoid-hosted quartz stockwork and micro-veining system. This provides valuable information for future sampling and drill targeting.  The quartz stockworking and micro-veining appear to occur predominantly in felsic volcanic tuff units in the Navarre Creek area.  One anomalous sample, 32519, registered a gold value of 0.387 g/t, in a magnetite skarn sample located on the southern end of the Navarre Creek claim block where the skarn body occurs as subcrop through the surface volcanics tuffs. Additionally, the presence of limestone in surface float near the skarn sample location is evidence that the Paleozoic sedimentary rocks that occur at the Empire Mine may be near the surface.  The Empire orebody is located roughly five kilometres south east of the Navarre Creek property and is partly comprised of a magnetite skarn body hosted in Paleozoic limestone.  Additional sampling is planned to be conducted in the area around sample 32519, as well as a ground magnetics survey.  It was also noted that volcanic outcropping across the Navarre Creek area is strongly weathered and highly leached to depths of two to four metres.

The 90 samples reported below were collected over an area of 9.79 square kilometres as part of the initial reconnaissance exploration programme: 

Table 1 - Navarre Creek Rock Chip Samples 2020

Notes: g/t (grams per metric tonne or g/tonne), is equivalent to parts per million. ND = Not Detected

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 emerging producer and exploration company, 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.