TIDMPXC
RNS Number : 8688S
Phoenix Copper Limited
14 July 2020
Phoenix Copper Limited / Ticker: PXC / Sector: Mining
14 July 2020
Phoenix Copper Limited
("Phoenix" or the "Company")
Interim Results
Phoenix Copper Limited (AIM: PXC; OTCQX: PXCLF), the AIM quoted
North American focused base and precious metals company, is pleased
to announce its unaudited interim results for the six months ended
30 June 2020.
Highlights
Corporate & Financial
- $3.79 million raised during the period
- Investment in Empire Mine increased to $12.82 million (2019: $10.88 million)
- Net assets increased to $13.51 million (2019: $10.56 million),
including cash of $2.05 million (2019: $0.32 million)
- 19% decrease in administration expenses to $540,391 (2019:
$663,253), including (non-cash) share based payments charge of
$139,221 (2019: $211,124)
- 15% decrease in net loss to $569,759 (2019: $666,682)
- Phoenix loan to operating subsidiary increased to $9.65 million (2019: $7.40 million)
- Ryan McDermott appointed as Chief Executive Officer
Empire Mine, Idaho, USA
- Open pit Measured, Indicated & Inferred mineral resource
increased to 129,923 tonnes of copper (+11%), 342,249 ounces of
gold (+56%), 9.5 million ounces of silver (+13%) and 50,550 tonnes
of zinc (+26%)
- Ongoing reverse circulation drilling programme into the high
grade (12.8 g/ton) gold zone at the open pit
o 1,000 metres of a 2,500 metre programme completed, assays
pending
- Gold recoveries exceed 97% using environmentally friendly reagent
- Pilot scale gold test programme under development
- Ongoing diamond core drilling programme at the high grade Red
Star silver - lead deposit, adjacent to the open pit
o 300 metres of a 1,500 metre programme completed, assays
pending
- Completion of environmental base-line studies for both the
open pit and Red Star, with no critical issues identified
- Mapping and sampling exploration programme at the Navarre
Creek 2,420-acre gold block underway
- ESG Programme Coordinator appointed
Chairman's Statement
I am pleased to be able to report that, after the exceptional
volatility of the last six months, Phoenix has emerged from the
chaos largely unscathed, thanks to strong management by our newly
appointed CEO, Ryan McDermott, and his team, coupled with the
continued support of both existing and new shareholders.
Having watched copper collapse to $2.10 / pound and silver down
to $11.86 / ounce, and in the midst of a global pandemic, we were
potentially facing an uphill struggle. Instead, assisted by a
recovery in commodity prices, and particularly a strong rise in the
gold price, we have improved the Company's value by substantially
increasing the resource at our Empire open pit, including a 56%
increase in gold resource to some 342,000 ounces. During this six
month period, we were also able to raise money at prices close to
or at a premium to market, and we start the second half of the year
with comprehensive work programmes well underway at the Empire open
pit, the Red Star silver deposit, and the Navarre Creek gold block,
with two drill rigs in operation, over $2 million in the bank, and
pilot test work being conducted on the high grade gold bearing ore
within the Empire open pit.
The pilot test work on the gold bearing ore is particularly
significant since it follows our welcome discovery that we can
recover in excess of 97% of the gold in less than six hours using
the non-toxic, environmentally friendly ammonium thiosulfate
reagent. This should have a very favourable impact on the overall
permitting process and timeline, and potentially brings the Empire
open pit into much earlier production. We therefore could have a
low capex and highly profitable gold mine, in addition to the
silver mine at Red Star, both with the prospect of near-term
production.
We very much look forward to the results of the ongoing
drilling, metallurgical and exploration programmes and expect a
steady stream of newsflow over the coming weeks and months. I
should also mention that ammonium thiosulfate, although not
amenable to many types of ore, is a tried and tested processing
reagent and has been in use at some of the largest gold mines in
the world for many years. We are therefore not experimenting with
new technology. Furthermore, the Empire open pit has had over 400
holes drilled into it and we already have an NI 43-101 compliant
resource, which includes the high grade gold zone. The work we are
now conducting at Empire is development of a known resource,
together with further exploration to enhance its potential.
We expect the remainder of 2020 to be very positive on many
fronts, full of activity, and we look forward to updating all our
stakeholders as we continue to understand and develop what is
without doubt the prolific Empire ore system.
Marcus Edwards-Jones
Chairman
Chief Executive Officer's Report
Principal activities and review of the business
In the first six months of 2020, the Company saw a number of
positive achievements, most notably the issuance of an updated NI
43-101 resource for the Empire polymetallic oxide deposit that
resulted in a 56% increase in gold ounces and a 13% increase in
silver ounces. The increase in the gold and silver resource at the
Empire Mine led to a closer examination of the distribution of
those metals within the deposit and ultimately to the metallurgical
recovery testing of a bulk sample using the non-toxic cyanide
alternative reagent ammonium thiosulfate. The initial metallurgical
test work resulted in gold recoveries above 97% and has provided
the impetus to move into pilot-scale testing immediately. The
Company also commenced a reverse-circulation ("RC") drilling
programme targeting both the possible extensions of the precious
metal resource and the inferred resources with the objective of
upgrading to the measured and indicated category. The variety and
grade of mineralization encountered thus far on the many claim
blocks that make up the Empire group is providing Phoenix with the
unique opportunity to exploit metals other than copper during a
period when the fluctuating copper market is proving challenging
for the industry as a whole. The recent gold recovery testing and
the bullish precious metals markets have brought the gold and
silver potential of Empire very much to the forefront. As a result,
we have also initiated a diamond drilling programme at the Red Star
silver deposit and began a comprehensive mapping and sampling
programme at the Navarre Creek gold property.
The Phoenix team accomplished the goals outlined for the first
half of the year despite the Covid-19 pandemic. Careful logistical
planning by our ESG coordinator, in concert with contractors and
the local community, have been successful in keeping the projects
running smoothly whilst accommodating for occasional business
slowdowns and interruptions both expected, and unexpected, during a
global pandemic.
The Company is in an excellent position, particularly given the
polymetallic nature of its projects, to explore and develop a
variety of metals as markets and prices dictate. As precious metal
prices continue to climb, and copper prices slowly ascend, Phoenix
is well positioned with a variety of metallic resources with early
production potential and superb exploration potential. Two drill
rigs are operating on site and it is also reassuring to note that
the Company is operating in a geopolitically stable jurisdiction in
an area of the United States that has not been hard hit by
COVID-19.
Empire Mine - Polymetallic Open-Pit Oxide Deposit
In May 2020, an updated NI 43-101 compliant resource was
completed by Hardrock Consulting ("HRC") 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 notably gold and silver, which
increased 56% and 13%, respectively, from the previous May 2019
resource.
Based on the examination of the distribution of gold, silver,
and zinc values, and independent of copper values, from the assays
used in the May 2019 Empire oxide resource, HRC estimated this
updated NI 43-101 compliant resource using the value of all gold,
silver, copper and zinc in the deposit at a combined metal cut-off
grade of 0.36% copper equivalent. The Measured & Indicated
Empire Mine open pit resource based on a combined metal cut-off
grade of 0.36% copper equivalent, compared with the May 2019
resource at a copper-only cut-off of 0.184%, is tabulated as
follows: -
Mineral Resource Statement for Empire Mine, after Hard
Rock Consulting May 2020
CLASS Tonnes Cu Equiv Average Grade Metal Content
%
---------------------------
Cu Zn Ag Au Cu Zn Ag Au Cu Equiv
% % g/t g/t Tonnes tonnes ozs ozs Tonnes
Measured 6,389,000 0.82 0.46 0.22 11.8 0.315 29,134 14,184 2,423,810 64,703 52,408
----------- ----- ----- -------- ----------
Indicated 12,913,000 0.79 0.41 0.18 10.6 0.368 52,814 23,502 4,400,649 152,797 102,094
M+I 19,302,000 0.80 0.42 0.20 11.0 0.351 81,948 37,685 6,824,460 217,500 154,502
------------ ----- ----- -------- ----------
Inferred 10,544,000 0.81 0.46 0.12 7.9 0.368 47,975 12,864 2,678,035 124,749 85,043
----------- ------------ ----- ----- -------- ---------- ---------
Phoenix is continuing down the feasibility study and permitting
pathways with the copper-oxide resource, most recently completing
two years of environmental studies directly applicable to the
permitting and mine planning of the oxide-copper open-pit.
The Company is currently examining alternative extraction
methods that may allow for the recovery of gold, silver, and zinc
along with copper from the same process plant.
Empire Mine - Gold and Silver Resource and Metallurgical
Recovery
Following the May 2020 resource update, a bulk metallurgical
sample was collected from outcrops near the location of channel
samples analysed in 2018. The head-grade of the bulk 400-pound
sample assayed at 12.8 g/ton gold. The sample was submitted for
gold and silver metallurgical recovery testing with instructions to
the laboratory to perform cyanide-alternative reagent leach
tests.
Four laboratory scale amenability tests and two bench scale
extraction tests were performed using sodium cyanide lixiviant, and
four laboratory scale amenability tests and two bench scale
extraction tests using the non-toxic cyanide-alternative ammonium
thiosulfate ("ATS") 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 (30g to
250g) and the bench scale samples (3,000g). 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. Tables 1 and 2 show the results of ATS six hour leach
testing.
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%.
Table 1 - 3,000-gram Bench Scale Test Results using Ammonium
Thiosulfate - Run 1
Test 4894C
Time Free ATS Cons. pH Solution Au (g/ton) Ag (g/ton)
(h) ATS (g/L) % Volume
(mL)
----- ----------- ---------- ------ ---------
12.78 13.43
----- ----------- ---------- ------ --------- --------------- --------------
g/ton % Rec g/ton % Rec
----- ----------- ---------- ------ --------- ------- ------ ------ ------
0 14.82 - 10.2 4,500 0 0 0
----------- ---------- ------ --------- ------- ------ ------ ------
1 14.38 2.97 10.2 4,500 10.575 82.7 5.625 41.9
----------- ---------- ------ --------- ------- ------ ------ ------
2 14.3 3.51 10.18 4,500 11.82 92.5 6.173 46
----------- ---------- ------ --------- ------- ------ ------ ------
3 14.22 4.05 10.14 4,500 12.225 95.7 8.888 66.2
----------- ---------- ------ --------- ------- ------ ------ ------
4 14.2 4.18 10.14 4,500 12.48 97.7 9.113 67.9
----------- ---------- ------ --------- ------- ------ ------ ------
5 14.18 4.32 10.11 4,500 12.45 97.4 9.366 69.7
----------- ---------- ------ --------- ------- ------ ------ ------
6 14.18 4.32 10.06 4,500 12.495 97.8 9.374 69.8
----------- ---------- ------ --------- ------- ------ ------ ------
Table 2 - 3,000-gram Bench Scale Test Results using Ammonium
Thiosulfate - Run 2
Test 4899C
Time Free ATS Cons. pH Solution Au (g/ton) Ag (g/ton)
(h) ATS (g/L) % Volume
(mL)
----- ----------- ---------- ------ ---------
12.78 13.43
----- ----------- ---------- ------ --------- --------------- ---------------
g/ton % Rec g/ton % Rec
----- ----------- ---------- ------ --------- ------- ------ ------- ------
0 29.64 - 10.2 4,500 0 0 0
----------- ---------- ------ --------- ------- ------ ------- ------
1 29 2.16 10.2 4,500 10.65 83.3 6.236 46.4
----------- ---------- ------ --------- ------- ------ ------- ------
2 28.85 2.67 10.2 4,500 11.925 93.3 8.543 63.6
----------- ---------- ------ --------- ------- ------ ------- ------
3 28.65 3.34 10.18 4,500 12.27 96 10.193 75.9
----------- ---------- ------ --------- ------- ------ ------- ------
4 28.47 3.95 10.18 4,500 12.48 97.7 10.358 77.1
----------- ---------- ------ --------- ------- ------ ------- ------
5 28.37 4.28 10.19 4,500 12.492 97.7 10.5 78.2
----------- ---------- ------ --------- ------- ------ ------- ------
6 28.33 4.42 10.18 4,500 12.483 97.7 10.5 78.2
----------- ---------- ------ --------- ------- ------ ------- ------
As a result of these positive tests, the Company redeployed the
RC drill rig from Red Star to the open pit gold zone and is now
drilling both for expansion of the gold resource and to convert the
Inferred resource into the Measured and Indicated category. 1,000
metres of drilling has been completed to date and we look forward
to receiving the assay results. In addition, we are proceeding with
a pilot-scale testwork programme, initially at the laboratory, and
then, all being well, on site at Empire. Based on the initial
results of this programme, HRC will update the Empire open pit
resource and issue an updated Preliminary Economic Assessment using
the costs and operating parameters determined in the programme and
a gold-driven all-metals recovery scenario.
Red Star - High-grade Silver
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. Surface mineralisation is
a mix of copper and iron oxides and sulphides, with strong
chrysocolla and bornite showings, exposed in a heavily timbered
canyon. Three RC drill holes were drilled on the target and assay
results reported the presence of high-grade lead and silver
sulphides including intercepts of 1,111 g/t silver and 20% lead. In
early 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.
Class Tons Ag Ag Au Au Pb Pb Zn Zn Cu Cu
(x1000) g/t Oz g/t oz % lb % lb % lb
-------- ------ -------- ------ -------- ----- --------- ----- --------- ----- --------
(x1000) (x1000) (x1000) (x1000) (x1000) % (x1000)
-------- ------ -------- ------ -------- ----- --------- ----- --------- ----- --------
Inferred 114.13 173.4 577.3 0.851 2.8 3.85 8,791.20 0.92 2,108.80 0.33 745
-------- ------ -------- ------ -------- ----- --------- ----- --------- ----- --------
Following the estimation of the inferred resource, a second
drilling programme was approved by the Company targeting the Red
Star vein system along strike and at depth. Due to the depth of
overburden and general lack of outcrop in the area, drill roads
were constructed in late 2019 designed to "cut" below the
overburden and into the sub-crop along the vein system's strike.
Channel samples were collected across the mineralized sub-crop
where the vein system "daylighted" in the road cuts. The results of
the channel sample assays were on par with the channel sample
results taken from the Red Star discovery outcrop in 2018. The 2020
drill programme, which commenced with RC drilling, encountered
difficult ground conditions which resulted in poor sample recovery
which would not give representative assays. Given the exciting
developments within the gold zone at the Empire open pit, a
decision was taken to relocate the RC rig to the open pit and
utilise a diamond core drill rig at Red Star. We are grateful to
the drilling contractor for making available an HQ diamond core rig
at such short notice and drilling is now well underway with
excellent core recoveries in excess of 94% and 300 metres of the
1,500-metre programme completed.
The 2018 drilling at Red Star showed that the copper-silver-lead
mineralization was hosted in andradite-magnetite skarn. All 300
metres (seven holes) of the core drilled so far in 2020 have
encountered andradite-magnetite in intercepts of 3.0 metres to 39.6
metres in length. While the intercepts are not necessarily "true
thickness" and the presence of the andradite-magnetite skarn in the
drill core does not necessarily ensure the presence of
copper-silver-lead mineralization, it is certainly a positive sign
and we look forward to the assay results.
Whilst we await assay results, photographs of the Red Star core
can be viewed in the photo gallery on the Company's website at
www.phoenixcopperlimited.com.
Empire Mine Expansion - Horseshoe and White Knob, Windy Devil,
and Navarre Creek
We have made a point of focusing our efforts on our flagship
Empire Mine projects. However, we have increased our land position
from time-to-time as our geologists recognize prospective and
strategic opportunities. At the time of the Company's IPO in
mid-2017, our Empire Mine property consisted of 818 acres. Since
then, we have increased the core Empire claim group to 3,297 acres
by expanding north to the former Horseshoe and White Knob Mines and
onto Windy Devil. This expansion covers approximately 30 historic
adits, shafts and prospects, which exhibit geology and mineralogy
similar to that of Red Star.
In February 2019 we staked another 2,240 acres in Navarre Creek,
north and west of the core Empire claim group. Navarre Creek is a
four-mile long zone of felsic volcanic and intrusive rocks with
alteration and mineralization characteristics typical of
epithermal, hot spring-type gold deposits. A comprehensive mapping
and sampling programme is now underway.
Empire Mine - Polymetallic Sulphide Potential
The Red Star vein system appears to be a distal, near-surface
expression of a deeper, copper rich sulphide vein system that lies
below the oxide-copper/gold open pit and was mined extensively
underground until the 1940s, at copper head grades of 6-8%. Two
deep diamond drill holes drilled in late 2017 confirmed the
presence of higher-grade sulphide mineralisation in the skarn
structures at depth. Both of the core holes intersected mineralised
skarn over much of their length and the analytical data from both
drill holes intersected numerous significant intervals of copper,
gold, silver, zinc, lead, and tungsten throughout their depths. The
tungsten values were particularly interesting as they positively
reinforced the Company's consulting geologist's predictions of the
Empire system being the uppermost horizon of a larger
molybdenum-tungsten porphyry. In 2018 five drill holes intercepted
copper sulphide mineralisation. One hole returned 5.53% copper,
7.67 g/t gold, and 120 g/t silver, and was further north of any
historical underground mining, whilst another returned 5.19% copper
adjacent to historical underground workings. The gold and silver
grades generally are major considerations, ranging to 7.93 g/t gold
and 256 g/t silver.
It is worth noting that our consulting geologist is of the
opinion that less than 1% of the Empire ore system has been
exploited and explored to date.
Borah Resources - Idaho Cobalt Belt
Borah Resources is a 100% Idaho registered subsidiary of the
Company. Comprised of two strategically located properties,
Redcastle and Bighorn, the Company believes that they are an
important asset in a time of global electrification and the rarity
of cobalt resources from first world jurisdictions, and
strategically 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
programme of 46 surface grab samples which gave cobalt values
ranging from 2 ppm to 0.31% cobalt.
The Company continues to keep the claim blocks in good standing
whilst we consider the optimal way forward to develop these
properties, including perhaps cooperation with a third party.
Environmental, Social and Governance
In addition to the expansion of the oxide-copper/gold resource
into the polymetallic system we currently recognize, I am
particularly encouraged by the results of two years of extensive
baseline environmental studies that we recently released that
included the research of flora, wildlife, hydrological, and
archaeological studies, and indicated that we have no critical
habitat for threatened or endangered plant and wildlife species,
including sage grouse. The studies also concluded that no legacy
impacts to surface or groundwater occurred as a result of any
historical mining operations on the Empire Mine properties.
Archaeological studies were also unable to identify any significant
cultural artefacts on the Empire property. These findings are
important as they clear the path to the permitting of Red Star, the
Empire oxide-copper/gold deposit, and the deeper sulphide
system. That is three metal-rich systems with favourable environmental conditions.
Our successes thus far are related directly to the local
community support we receive from the citizens of Custer County,
Idaho. We are fortunate to work in an area rooted so deeply in
mining and with a population understanding of the economic benefits
of the industry. Our recent roll-out of the Company's
Environmental, Social, and Corporate Governance ("ESG") programme
was based largely on our desire to include the community in our
team. We initiated the programme by appointing Ms. Lenie Wilkie to
the position of ESG Programme Coordinator.
Lenie is a well-respected local businesswoman and community
leader. She has been playing an integral role as liaison between
the community and Phoenix, assisting in the hiring of local labour,
reviewing and selecting the beneficiaries of Company donations, and
managing local supply acquisitions and inventory. She was integral
in the placing of Company donations for the Mackay, Idaho FFA Fish
Lab and the Lost River Robotics Youth Team. Both organizations
provide local youth the opportunity to compete in State and
National level scientific-based competitions. Her deep roots in the
community, her Native American background, and her success driven
work ethic provide her with a unique perspective on the importance
of balancing sustainable job growth with an emphasis on
environmentally and socially responsible business practices. Lenie
is based in Mackay, Idaho and will be responsible for coordinating
all aspects of the Company's ESG programme.
Outlook
My outlook on the Company is as positive as ever, particularly
given the recent cyanide-alternative metallurgical test work on our
gold resource. The Company has continued to expand its copper,
gold, and silver resources through methodical and industry standard
means. The exploration potential, which has expanded from
exploration on a single oxide-copper resource into a polymetallic
oxide deposit with robust metal recoveries, a high-grade silver
vein system, a polymetallic sulphide vein system, a very
prospective volcanic-hosted gold system, and two strategically
located cobalt properties, all within the same geopolitically
stable, pro-mining jurisdiction, is excellent. We also remain
cautiously optimistic regarding Covid-19 as the team follows
carefully the operational procedures developed to ensure both
employee and community safety.
Despite the challenging copper market and the current global
crisis with Covid-19, we are moving into the second half of 2020
with a palpable enthusiasm as we begin developing our pilot-scale
metallurgical testing programme, await assay results from the
ongoing Red Star and Empire drilling and channel sampling
programmes, and begin examining the geological and geochemical
details of Navarre Creek.
Ryan McDermott
Chief Executive Officer
Financial Overview
The Group reports a loss for the six months ended 30 June 2020
of $569,759 (2019: $666,682). This loss includes $139,221 (2019:
$211,124) of (non-cash) share based payments attributable to
warrants and options extended, granted or lapsed during the period,
and which amount is simultaneously credited back to the retained
deficit. Net assets at 30 June 2020 totalled $13.51 million (2019:
$10.56 million), including cash of $2.05 million (2019: $0.32
million).
During the period the Company raised a further $3.79 million,
$3.66 million through the issue of 7,900,000 shares at 15 pence per
share and 9,777,641 shares at 18 pence per share, and $129,000
through the issue of 12% unsecured loan notes. At 30 June 2020
outstanding share capital is 62,462,522 shares, and outstanding
loan notes total $929,000.
During the period 1,225,000 options lapsed, 129,000 warrants
with an exercise price of 16 pence expiring 31 July 2022 and
455,467 warrants with an exercise price of 18 pence expiring 30
June 2023 were granted, and all warrants expiring in June 2020 were
extended to 30 June 2022.
During the period the Company charged its subsidiary entities
$270,000 (2019: $291,736) in respect of management services
provided, and $262,074 (2019: $nil) in respect of interest at 6%
per annum on the Company's inter-company loan to Konnex Resources
Inc, owner of the Empire Mine, the latter amount eliminating on
consolidation. At 30 June 2020 the Company's loan to Konnex
Resources stood at $9.65 million (2019: $7.40 million). This amount
will be repaid from Konnex's operating cash flow in due course, and
will form a platform to return money to shareholders by way of
dividend.
The directors recognise the importance of sound corporate
governance and have applied the Quoted Companies Alliance's
Corporate Governance Code 2018 from September 2018. The Company's
Corporate Governance Statement dated 9 April 2020 can be viewed on
the Company's website at www.phoenixcopperlimited.com .
Richard Wilkins
Chief Financial Officer
Unaudited Unaudited Audited
6 months to 6 months to 12 months to
Condensed consolidated income 30 June 30 June 31 December
statement 2020 2019 2019
Note $ $ $
Continuing operations
Revenue 3 - - -
Exploration and evaluation
expenditure - (3,429) (3,429)
Gross loss - (3,429) (3,429)
------------ ------------ -------------
Administrative expenses 4 (540,391) (663,253) (1,101,811)
-------------
Total administrative expenses (540,391) (663,253) (1,101,811)
------------ ------------ -------------
Loss from operations (540,391) (666,682) (1,105,240)
Finance expenses (29,368) - (22,911)
Loss before taxation (569,759) (666,682) (1,128,151)
Taxation - - -
------------ ------------ -------------
Loss for the period (569,759) (666,682) (1,128,151)
------------ ------------ -------------
Loss attributable to:
* Owners of the parent company (561,040) (660,100) (1,116,563)
* Non-controlling interests (8,719) (6,582) (11,588)
------------ ------------ -------------
(569,759) (666,682) (1,128,151)
------------ ------------ -------------
Basic and diluted loss per
share - cents 5 (1.08) (1.87) (2.76)
------------ ------------ -------------
The revenue, expenditures and operating result for each period
is derived from acquired and continuing operations in North America
and the United Kingdom.
Condensed consolidated statement of
comprehensive income Unaudited Unaudited Audited
6 months 6 months 12 months
to to to
30 June 30 June 31 December
2020 2019 2019
$ $ $
---------- ---------- -------------
Loss for the period and total comprehensive
income for the period (569,759) (666,682) (1,128,151)
---------- ---------- -------------
Total comprehensive income for the
period attributable to:
Owners of the parent company (561,040) (660,100) (1,116,563)
Non-controlling interests (8,719) (6,582) (11,588)
---------- ---------- -------------
(569,759) (666,682) (1,128,151)
---------- ---------- -------------
Condensed consolidated statement
of
financial position Unaudited Unaudited Audited
30 June 30 June 31 December
Note 2020 2019 2019
$ $ $
------------ ------------ ------------
Non-current assets
Property, plant and equipment
- mining property 6 12,824,188 10,879,130 11,671,660
Intangible assets 7 261,895 222,160 246,895
------------
Total non-current assets 13,086,083 11,101,290 11,918,555
------------ ------------ ------------
Current assets
Trade and other receivables 8 172,866 159,963 267,932
Cash and cash equivalents 2,052,544 316,393 210,591
------------
Total current assets 2,225,410 476,356 478,523
------------ ------------ ------------
Total assets 15,311,493 11,577,646 12,397,078
------------ ------------ ------------
Current liabilities
Trade and other payables 9 119,096 260,656 282,900
Borrowings 10 486,000 - -
Total current liabilities 605,096 260,656 282,900
------------ ------------ ------------
Non-current liabilities
Borrowings 10 443,000 - 800,000
Provisions 11 757,702 757,702 757,702
------------ ------------ ------------
Total non-current liabilities 1,200,702 757,702 1,557,702
------------ ------------ ------------
Total liabilities 1,805,798 1,018,358 1,840,602
Net assets 13,505,695 10,559,288 10,556,476
------------ ------------ ------------
Equity
12
Share capital 10 - - -
Share premium account 19,007,487 15,226,865 15,627,730
Retained deficit (5,607,902) (4,787,412) (5,186,083)
Translation reserve (18,588) (18,588) (18,588)
Capital and reserves attributable
to the owners of the parent company 13,380,997 10,420,865 10,423,059
Non-controlling interests 124,698 138,423 133,417
Total equity 13,505,695 10,559,288 10,556,476
------------ ------------ ------------
Condensed consolidated statement of changes in equity
Share premium Retained Translation Total Non-controlling Total
deficit reserve interests Equity
$ $ $ $ $ $
Balance at 1 January 2019 13,362,353 (4,338,436) (18,588) 9,005,329 145,005 9,150,334
Loss for the period - (660,100) - (660,100) (6,582) (666,682)
Total comprehensive income
for
the period - (660,100) - (660,100) (6,582) (666,682
-------------- ------------ ------------ ----------- ---------------- -----------
Shares issued in the period 2,105,000 - - 2,105,000 - 2,105,000
Share issue expenses (240,488) - - (240,488) - (240,488)
Share-based payments - 211,124 - 211,124 - 211,124
Total contribution by owners 1,864,512 211,124 - 2,075,636 - 2,075,636
-------------- ------------ ------------ ----------- ---------------- -----------
Balance at 30 June 2019 15,226,865 (4,787,412) (18,588) 10,420,865 138,423 10,559,288
-------------- ------------ ------------ ----------- ---------------- -----------
Loss for the period - (456,463) - (456,463) (5,006) (461,469)
Total comprehensive income
for
the period - (456,463) - (456,463) (5,006) (461,469)
-------------- ------------ ------------ ----------- ---------------- -----------
Shares issued in the period 435,200 - - 435,200 - 435,200
Share issue expenses (34,335) - - (34,335) - (34,335)
Share-based payments - 57,792 - 57,792 - 57,792
-------------- ------------ ------------ ----------- ---------------- -----------
Total contribution by owners 400,865 57,792 - 458,657 - 458,657
-------------- ------------ ------------ ----------- ---------------- -----------
Balance at 31 December 2019 15,627,730 (5,186,083) (18,588) 10,423,059 133,417 10,556,476
-------------- ------------ ------------ ----------- ---------------- -----------
Loss for the period - (561,040) - (561,040) (8,719) (569,759)
------------ ------------ ----------- ---------------- -----------
Total comprehensive income
for
the period - (561,040) - (561,040) (8,719) (569,759)
-------------- ------------ ---------------- -----------
Shares issued in the period 3,664,000 - - 3,664,000 - 3,664,000
Share issue expenses (284,243) - - (284,243) - (284,243)
Share-based payments - 139,221 - 139,221 - 139,221
Total contribution by owners 3,379,757 139,221 - 3,518,978 - 3,518,978
-------------- ------------ ------------ ----------- ---------------- -----------
Balance at 30 June 2020 19,007,487 (5,607,902) (18,588) 13,380,997 124,698 13,505,695
-------------- ------------ ------------ ----------- ---------------- -----------
Condensed consolidated statement
of cash flows Unaudited Unaudited Audited
6 months 6 months 12 months
to to to 31 December
30 June 30 June 2019
2020 2019
$ $ $
------------ ------------ ----------------
Loss before taxation (569,759) (666,682) (1,128,151)
Adjustments for:
Depreciation
Share-based payments 139,221 211,124 268,916
(430,538) (455,558) (859,235)
Changes in working capital
(Increase)/decrease in trade and
other receivables 95,066 52,553 (55,416)
(Decrease)/Increase in trade and
other payables (163,804) (240,645) 218,402
------------ ------------ ----------------
Cash (used in)/generated from operating
activities (499,276) (643,650) (1,133,053)
------------ ------------ ----------------
Investing activities
Purchase of intangible assets (15,000) (15,000) (39,735)
Purchase of property, plant and
equipment (1,152,528) (1,002,433) (1,794,962)
Net cash outflow from investing
activities (1,167,528) (1,017,433) (1,834,697)
------------ ------------
Cash flows from financing activities
Proceeds from the issuance of ordinary
shares 3,664,000 2,105,000 2,540,200
Share-issue expenses (284,423) (240,488) (274,823)
Proceeds from the issue of loan
notes 129,000 - 800,000
Net cash inflow from financing
activities 3,508,757 1,864,512 3,065,377
------------ ------------ ----------------
Net increase in cash and cash equivalents 1,841,953 203,429 97,627
Cash and cash equivalents at beginning
of period 210,591 112,964 112,964
Cash and cash equivalents at end
of period 2,052,544 316,393 210,591
------------ ------------ ----------------
1. Basis of preparation and principal accounting policies
This condensed consolidated interim financial information was
approved for issue by the Board on 13 July 2020.
This condensed consolidated interim financial information has
not been audited and does not include all of the information
required for full annual financial statements. While the financial
figures included within this interim report have been computed in
accordance with IFRS applicable to interim periods, this report
does not contain sufficient information to constitute an interim
financial report as set out in International Accounting Standard
34: Interim Financial Reporting.
Basis of consolidation
Basis of consolidation
This condensed consolidated financial information incorporates
the financial statements of the Company and entities controlled by
the Company (its subsidiaries) (together the "Group") for each
period. The results of subsidiaries acquired or disposed of during
the period are included in the consolidated income statement from
the effective date of acquisition, or up to the effective date of
disposal, as appropriate.
Control is achieved where the Company has the power to govern
the financial and operating policies of an entity so as to obtain
benefits from its activities.
Non-controlling interests in the net assets of consolidated
subsidiaries are presented separately from the Group's equity.
Non-controlling interests consist of the amount of those interests
at the date of the original business combination and the
non-controlling interest's share of changes in equity since the
date of the combination.
Where necessary, adjustments are made to the financial
statements of subsidiaries to bring the accounting policies used
into line with those used by the Group. All intra group
transactions, balances, income and expenses are eliminated on
consolidation.
2. Information on the Group
Phoenix Copper Limited is engaged in exploration and mining
activities, primarily precious and base metals, primarily in the
United States of America.
The Company was incorporated in the British Virgin Islands on 19
September 2013 (registered number 1791533), and is domiciled in the
British Virgin Islands. The address of its registered office is OMC
Chambers, Wickhams Cay 1, Road Town, Tortola VG1110, British Virgin
Islands.
3. Revenue
The Group is not yet producing revenues from its mineral
exploration and mining activities. During the period the Company
charged its subsidiary entities $270,000 (2019: $291,736) in
respect of management services provided.
4. Share-based payments
Total administrative expenses include share-based payments of
$139,221 (30 June 2019: $211,124; 31 December 2019: $268,916). The
related credits to equity are taken to the retained deficit.
5. Loss per share Unaudited Unaudited Audited
6 months 6 months 12 months
to to to 31 December
30 June 30 June 2019
2020 2019
$ $ $
------------------- ------------------- -----------------
Loss for the period attributable
to equity holders of the parent
company (561,040) (660,100) (1,116,563)
------------------- ------------------- -----------------
Number Number Number
Weighted average number of ordinary
shares for the purposes of basic
and diluted loss per share 51,993,891 35,701,078 40,862,399
------------------- ------------------- -----------------
Loss per share - basic and diluted
(cents) (1.08) (1.87) (2.76)
------------------- ------------------- -----------------
Non-current assets
Mining
6. Property, plant and equipment - mining property Property Total
$ $
---------------- --------------
Cost or valuation
At 1 January 2019 9,876,697 9,876,697
Additions 1,002,433 1,002,433
At 30 June 2019 10,879,130 10,879,130
Additions 792,530 792,530
At 31 December 2019 11,671,660 11,671,660
Additions 1,152,528 1,152,528
At 30 June 2020 12,824,188 12,824,188
---------------- --------------
Depreciation
At 30 June 2019, 31 December 2019 and 30 June - -
2020
---------------- --------------
Net book value:
30 June 2019 10,879,130 10,879,130
---------------- --------------
31 December 2019 11,671,660 11,671,660
30 June 2020 12,824,188 12,824,188
---------------- --------------
Mining property relates to the past producing Empire Mine copper
- gold - silver - zinc - tungsten project in Idaho, USA. The Empire
Mine has not yet recommenced production and no depreciation has
accordingly been charged in the statement of comprehensive income.
There has been no impairment charged in any period due to the
current stage in the Company's project to reactivate the mine. The
property is owned by Konnex Resources Inc, an 80% owned subsidiary
of the parent company, registered and domiciled in Idaho.
A provision for decommissioning costs of $100,000 has been
recognised at 30 June 2019, 31 December 2019 and 30 June 2020 based
on directors' estimates and taking into account appropriate
qualified professional advice. The cost of decommissioning the
asset is included within mining property.
7. Intangible assets
Exploration
and evaluation
expenditure Total
$ $
---------------- --------
Cost or valuation
At 1 January 2019 207,160 207,160
Additions 15,000 15,000
---------------- --------
At 30 June 2019 222,160 222,160
Additions 24,735 24,735
---------------- --------
At 31 December 2019 246,895 246,895
Additions 15,000 15,000
---------------- --------
At 30 June 2020 261,895 261,895
---------------- --------
Exploration and evaluation expenditure in the period relates to
the Bighorn and Redcastle cobalt properties on the Idaho Cobalt
Belt in the USA. The properties are owned by Borah Resources Inc, a
wholly owned subsidiary of the parent company, registered and
domiciled in Idaho.
8. Trade and other receivables Unaudited Unaudited Audited
30 June 30 June 31 December
2020 2019 2019
$ $ $
---------- ---------- ------------
Other receivables 61,447 135,604 243,928
Prepayments 111,419 24,359 24,004
---------- ---------- ------------
172,866 159,963 267,932
---------- ---------- ------------
9. Trade and other payables Unaudited Unaudited Audited
30 June 30 June 31 December
2020 2019 2019
$ $ $
----------- ----------- ------------
Trade creditors 118,559 216,398 178,093
Other creditors 537 39,177 100,270
Accrued expenses - 5,081 4,537
----------- ----------- ------------
119,096 260,656 282,900
----------- ----------- ------------
10. Borrowings Unaudited Unaudited Audited
30 June 30 June 31 December
2020 2019 2019
$ $ $
----------- ----------- ------------
Loan notes due within one year 486,000 - -
Loan notes maturing in one to
two years 443,000 - 800,000
----------- ----------- ------------
929,000 - 800,000
----------- ----------- ------------
The Company has issued loan notes with a redemption value of
$929,000 in units GBP20,000 (approximately $25,000) each. The
coupon is 12% per annum. The final redemption date is 30 September
2021, repayable earlier at the Company's option from new mezzanine
or construction finance for the Empire Mine if secured.
11. Provisions Unaudited Unaudited Audited
30 June 30 June 31 December
2020 2019 2019
$ $ $
---------- ---------- ------------
Decommissioning provision 100,000 100,000 100,000
Potential future royalties payable 657,702 657,702 657,702
---------- ---------- ------------
757,702 757,702 757,702
---------- ---------- ------------
12. Share capital Unaudited Unaudited Audited
30 June 30 June 31 December
2020 2019 2019
Number Number Number
----------- ----------- ------------
Allotted and issued
Ordinary shares with no par value 62,462,522 42,784,881 44,784,881
----------- ----------- ------------
The Ordinary Shares rank pari passu. On 27 February 2020 the
Company issued 7,900,000 new Ordinary Shares at a price of GBP0.15
and on 27 May 2020 the Company issued a further 9,777,641 new
Ordinary shares at a price of GBP0.18.
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:
Phoenix Copper Ryan McDermott Tel: +1 208 954
Limited Dennis Thomas 7039
Richard Wilkins Tel: +44 7827
290 849
Tel: +44 7590
216 657
SP Angel David Hignell / Caroline Rowe Tel: +44 20 3470
(Nominated Adviser) 0470
----------------------------------- -----------------
Brandon Hill Capital Jonathan Evans / Oliver Stansfield Tel: +44 20 3463
(Joint Broker) 5000
----------------------------------- -----------------
WH Ireland (Joint Harry Ansell / Adam Pollock Tel: +44 207
Broker) / Katy Mitchell 2201666
----------------------------------- -----------------
Blytheweigh Tim Blythe / Camilla Horsfall Tel: +44 20 7138
(Financial PR) / Megan Ray 3204
----------------------------------- -----------------
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 km (2) 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
km(2) 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 .
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
IR FLFEEDFIVLII
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