TIDMPXC
RNS Number : 3478M
Phoenix Copper Limited
16 September 2019
The information contained within this announcement is deemed by
the Group to constitute inside information as stipulated under the
Market Abuse Regulations (EU) No. 596/2014 ("MAR").
Phoenix Copper Limited / Ticker: PXC / Sector: Mining
16 September 2019
Phoenix Copper Limited (PXC) (the "Company" or "Phoenix")
Interim Results
Phoenix Copper Limited (AIM: PXC; OTCQX: PGMLF), the AIM quoted
North American focused base and precious metals exploration and
development company, is pleased to announce its unaudited interim
results for the six months ended 30 June 2019.
Highlights
Empire Copper Mine, Idaho, USA
- Updated 'Measured & Indicated' open pit resource
containing 73,872 tonnes copper, 29,813 tonnes zinc, 139,000 ounces
gold and 6.038 million ounces silver
- New open pit economic model to produce 7,665 tons copper
equivalent annually (7,000 tons copper and 1,600 tons zinc) over
the life of mine (with initial production of 8,600 tons per
annum)
- Bankable Feasibility Study ("BFS") on open pit heap leach SX-EW project underway
- Land acreage increased to 5,717 acres, including 2,420 acre Navarre Creek gold zone
- Maiden 'Inferred' sulphide resource at newly discovered Red Star lead / silver zone
- Lead financial adviser appointed to arrange structured project finance
Corporate and Financial
- $2.1 million raised during the period
- $1.0 million invested in the Empire Mine
- Net assets increased to $10.56 million (2018: $9.61 million)
- 20% decrease in administrative costs to $452,129 (2018:
$568,381), excluding (non-cash) share-based payments charge of
$211,124
- Net loss for the period of $666,682, comprising administrative
costs and (non-cash) share based payments charge (2018:
$679,817)
- Company name changed to Phoenix Copper Ltd
Chairman's Statement
Dear Shareholders
We are pleased to present our first set of interim results as
Phoenix Copper Ltd. The name change reflects our focus on the
mining-friendly state of Idaho and our commitment to commence early
production of copper from the Empire mine.
Since my last letter to you we have been preparing the updated
economic model for the open pit copper project at Empire, and I am
glad to say the economics of this project are increasingly robust.
We plan average annual production of 7,665 tons of copper
equivalent (7,000 tons copper and 1,600 tons zinc) over the 11 year
life of the mine, with initial production of 8,600 tons per annum.
The initial head grade of 0.60% copper is significantly higher than
the global average for copper oxide mines.
According to a May 2018 study by Mining Intelligence, operating
mines currently have an average grade of 0.53%, a figure which
includes higher-grade sulphide ore mines such as we have underneath
our open-pit project, while copper projects under development have
an average grade of 0.39%.
With an initial estimated capital cost of $51 million, and a
life-of-mine copper equivalent cash cost of $1.33/lb in the early
years, rising to $1.72/lb, the project generates a life of mine
EBITDA of $202 million and after tax cash flow of $177 million at
$3.25/lb copper, resulting in a 7% NPV of $55.5 million post-tax
and IRR of 33% at $3.25/lb copper, and $25.5 million and 20% at
$2.75/lb copper.
We also have 139,000 ounces of gold and 6 million ounces of
silver in the open pit at Empire, which are not included in the
above projections.
At the time of writing, copper is trading just above a two year
low at $2.63/lb. The market seems more fearful of a continued US -
China trade war and threat of a global recession, than optimistic
about the accelerated roll-out of the electric vehicle pool and the
switch to green energy. It must be remembered that the copper story
is also one of a growing supply deficit as there are few new mines
being built, and the grades in the existing ones are declining.
Wood Mackenzie, one of the more reliable forecasters, sees
copper rising to over $3.80/lb in 2020 and $3.70 in 2021, which is
when we hope to commence production, and a long-term price of
$3.30, which would suit us very nicely.
We believe that the Empire open pit represents the first stage
in a potential world class mine, surrounded by significant
exploration upside, and offering exposure to high-value metals with
compelling demand and supply fundamentals, and a major role to play
in a new world order of clean energy and electric vehicles.
As announced recently we are working closely with our project
finance advisers, Medea Natural Resources, on raising the mezzanine
and construction finance, predominantly through debt rather than
equity, and look forward to updating the market with developments
in the coming months.
Thank you all for your support.
Marcus Edwards-Jones MA
Chairman
For further information please visit
www.phoenixcopperlimited.com or contact:
Phoenix Copper Dennis Thomas / Richard Wilkins Tel: +44 7827
Limited 290 849 (Dennis)
/
+44 7590 216
657 (Richard)
SP Angel Lindsay Mair / Caroline Rowe Tel: +44 20 3470
(Nominated Adviser 0470
and Joint Broker)
----------------------------------- ------------------
Brandon Hill Capital Jonathan Evans / Oliver Stansfield Tel: +44 20 3463
(Joint Broker) 5000
----------------------------------- ------------------
Medea Natural Resources Leonidas Howden / Fred White Tel: +44 20 7770
Ltd (Financial 6926
Advisor)
----------------------------------- ------------------
Blytheweigh Tim Blythe / Camilla Horsfall Tel: +44 20 7138
(Financial PR) / Megan Ray 3204
----------------------------------- ------------------
Principal activities and review of the business
I am pleased to report that it has been another period in which
the goals set have been achieved and which are summarised
below.
Empire Mine - Open Pit Copper Project, Idaho, USA
Following our 2017 and 2018 drilling programmes, in May 2019 we
announced an updated NI 43-101 compliant resource for the Empire
open pit heap leach solvent extraction and electro-winning
("SX-EW") project. The model used a 0.184% copper cut-off grade and
resulted in an updated "Measured and Indicated" resource containing
73,872 tonnes of copper, 29,813 tonnes of zinc, 139,000 ounces of
gold, and 6,038,000 ounces of silver giving a combined metal value
at current prices of approximately $850 million.
Based on the updated open pit resource, the Company announced
the completion of a new economic model in August 2019, the
highlights of which were as follows:
- Average annual production of 7,665 tons of copper equivalent
(7,000 tons copper and 1,600 tons zinc) over the life of the mine
(with initial production of 8,600 tons per annum)
- 11-year mine life, including processing of a lower grade
stockpile, leaching 1.6 million tons per annum
- Initial head grade of 0.60% copper
- Initial capital cost of $51 million
- Life of mine copper equivalent cash cost of $1.72/lb ($1.33/lb in early years)
- Life of mine EBITDA of $202 million and after tax cash flow of
$177 million at $3.25/lb copper
- 7% NPV of $55.5 million post-tax and IRR of 33% at $3.25/lb copper
- 7% NPV of $25.5 million post-tax and IRR of 20% at $2.75/lb copper
The Company used the pit production schedule prepared by Hard
Rock Consulting and production, capital and operating cost
estimates prepared by Phoenix staff in conjunction with Hard Rock
Consulting. The new economic model was based on ore production of
1.6 million tons per annum over an initial nine-year mine life,
with an additional two years of low-grade ore processing at the end
of mining. The model also used current market data and forms the
basis of the BFS, currently underway and scheduled for completion
in Q2 2020. However, it should be noted that the new economic model
accounted for the recovery of copper and zinc but did not consider
recovery of the contained gold and silver. The BFS will be based
only on the "Measured and Indicated" resources. At a 0.325% copper
cut-off grade there are over 10 million tonnes in the "Measured and
Indicated" category with an average grade of 0.60% copper and 0.21%
zinc, plus five million tonnes of low-grade stockpile for
subsequent processing.
Idaho is a mining friendly jurisdiction ranked equal first for
least perceived risk by the Mining Journal Risk Report 2018. The
local community of Mackay wholly supports the re-opening of the
Empire Mine, which will revive a town originally established to
support the historic mining activity. There are also no apparent
environmental or permitting obstacles. Empire is a brownfield site
with no legacy issues, and no known flora, fauna, indigenous
tribal, migratory fish or water issues. Furthermore, much of the
project is on patented land.
In July 2019 the Company announced the appointment of Medea
Natural Resources Ltd ("Medea"), a specialist mining finance
advisory firm, as the lead financial adviser to arrange structured
project financing of up to $70 million to construct the Empire Mine
open pit project, including $10 million of advance mezzanine debt
financing. The Company is now working closely with Medea and Hard
Rock Consulting to further optimise the economic model as part of
the BFS process.
Empire Mine - Property Claims
At the time of the Company's IPO in mid-2017, the Empire Mine
property consisted of 818 acres. In 2018 the property area was
increased to 1,837 acres after acquiring an additional 54 claims
containing the northern extension of the Empire Mine skarn orebody
through to the Horseshoe, White Knob and Bluebird past producing
mines. In February 2019 another 194 claims were staked which
increased the property to 5,717 acres (23.14 square kilometres).
The extension includes more than 30 historical prospects, shafts
and adits north of the Horseshoe block into the Windy Devil area,
resulting in an overall length of identified contiguous skarn
mineralisation of some 5.38 kilometres. It also includes the
Navarre Creek area some 6.5 kilometres west of the Empire Mine, a
2,420-acre zone, geologically similar to the Carlin Trend gold belt
in Nevada and suggesting excellent potential for gold and silver
discoveries.
Empire Mine - Sulphide Potential and high-grade Red Star
Discovery
In early 2018 the Company was pleased to report the results from
two deep diamond drill holes completed in late 2017, which
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 hosting significant values of
tungsten at depth. 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. The new acquisitions of the Horseshoe and Windy
Devil blocks of claims to the north of the Empire block also
present sulphide potential for lead, zinc and silver, as well as
copper at depth, and further sampling will take place on these
properties.
In 2018, a new zone of surface mineralisation, now named Red
Star, was discovered, located 330 metres north-northwest of the
Empire oxide pit on the patented mining property. Red Star was
identified from a 20 metres wide surface outcrop across the skarn
structure, exposed during drill road construction, with the surface
mineralisation a spectacular mixture of oxides and sulphides, with
strong chrysocolla and bornite showings, exposed in a heavily
timbered canyon. Three reverse circulation drill holes were drilled
on the target and assay results reported the presence of high-grade
lead and silver sulphides including intercepts of 20% lead and
1,111 g/t silver over 1.52 metres. 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.
Red Star represents an exciting exploration prospect.
Empire Mine - Medium/Long Term Exploration Potential
In April 2019 Nigel Maund, our consultant geologist, completed
an update of his 2015 overview report of the Empire Mine geological
setting and mineralisation. He visited the property in March 2019
to review the work completed in 2018 and 2019. Amongst his
conclusions, he confirmed that the Empire Mine comprises a world
class polymetallic ore system containing tungsten and molybdenum as
well as copper, gold, silver, zinc and lead and that the mine is
sited along a major north south structure with some five kilometres
of geologic strike, compared with one kilometre covered by the heap
leach SX-EW copper project. Furthermore, he reported that
exploration has to date focused on the near surface open pit oxides
and he is of the opinion that only 1% to 2% of the ore system has
been tested to date.
Empire Mine - Navarre Creek - Gold
In February 2019, the Company staked a 2,240-acre group of
claims along Navarre Creek, some 6.5 kilometres west of the Empire
Mine. This zone is comprised of a mineralised jasperoid,
geologically similar to the Carlin Trend gold belt in Nevada, which
is exposed almost continuously in both outcrop and surface float
for 9.3 kilometres and pinches and swells from 15 metres to in
excess of 100 metres along strike. The Navarre Creek geology is
predominantly volcanic showing strong argillic and silicic
alteration typical of a near surface hydrothermal system, and
suggests excellent potential for near surface precious metal
discoveries.
Borah Resources - Idaho Cobalt Belt
Borah Resources is a 100% owned Idaho registered subsidiary of
the Company. Given the world's growing need for battery metals, our
Redcastle and Bighorn cobalt properties represent a timely
acquisition for the Company, strategically located in the USA's
only prospective cobalt region, the Idaho Cobalt Belt,
approximately 161 kilometres north of the Empire Mine. In 2018 the
results of the reconnaissance programme of 46 surface grab samples
showed cobalt values ranging from two ppm to 0.31% cobalt. The 2018
exploration programme focused on detailed structural and
stratigraphical mapping, as well as rock chip and channel sampling.
The Company's historical sampling results confirm the presence of
cobalt across both properties, and especially the continuity of the
rocks at Redcastle from First Cobalt's Iron Creek property, which
augurs well for future exploration plans.
Gordon Lake Gold - Northwest Territories, Canada
In February 2018, the Company signed an option agreement with
ExGen Resources Inc to earn into an 80% interest in the Gordon Lake
high grade, shear-hosted gold exploration project located 110
kilometres northeast of Yellowknife, in the Northwest Territories,
Canada. In early 2019, and taking into account the gold exploration
potential of the Navarre Creek claim block, a decision was made to
let the option lapse in order to focus our activities in Idaho.
Outlook
We entered 2019 waiting for the last of the Empire Mine 2018
drilling assay results. The new resource, completed in May 2019,
coupled with our recent economic model of the Empire open pit,
provides the platform on which to complete the BFS with the
objective of achieving early copper cathode and zinc
production.
At the beginning of July, we announced our Company change of
name from Phoenix Global Mining Ltd to Phoenix Copper Ltd, a
positive statement to the market of our intention to be one of
North America's first new copper producers in the short-term and
reinforcing the Company's focus on our operations in the USA, and
Idaho in particular.
We view the initial open pit development at the Empire Mine as
very much the "starter mine" in a significant mineralised system
that also contains the high grade Red Star discovery, the deeper
underground sulphide orebody at Empire and three other past
producing mines at Horseshoe, White Knob and Bluebird. The Red Star
discovery has given us an immediate and seriously attractive low
cost near surface sulphide exploration target, and the expanded
claim holdings secure our future, providing the Company with
potential base and precious metals resources and perhaps the
discovery of a world class copper, gold, silver deposit.
Dennis Thomas
Chief Executive Officer
Financial Overview
The Group reports a loss for the six months ended 30 June 2019
of $666,682 (2018: $679,817. This loss includes $211,124 (2018:
$99,629) of (non-cash) share-based payments attributable to
warrants and options granted by the Company. Net assets totalled
$10.56 million (2018: $9.61 million).
During the period the Company raised a further GBP1.65 million
($2.11 million) issuing 9,705,882 new ordinary shares at 17 pence
per share. Outstanding share capital is now 42,784,881 shares. The
Company also has 6,272,102 warrants and 1,225,000 options in issue.
Of the warrants, 327,094 are exercisable at 60 pence and expire on
31 December 2019, 127,962 are exercisable at 21 pence and expire on
14 June 2020, 641,157 are exercisable at 40 pence and expire on 28
June 2020, 427,343 are exercisable at 35 pence and expire on 30
June 2020, and 4,748,546 are exercisable at 28 pence and expire on
31 January 2022. The options are exercisable at 45 pence and expire
on 21 June 2020.
The directors recognise the importance of sound corporate
governance and have applied the Quoted Companies Alliance's
Corporate Governance Code 2018 (the "QCA" Code) from September
2018. The Company's Corporate Governance Statement is published on
the Company's website and is reviewed annually.
Richard Wilkins
Chief Financial Officer
Unaudited Unaudited Audited
6 months to 6 months to 12 months
30 June 30 June to
Condensed consolidated income 2019 2018 31 December
statement 2018
Note $ $ $
Continuing operations
Revenue 3 - - -
Exploration and evaluation
expenditure (3,429) (13,516) (169,863)
-------------
Gross loss (3,429) (13,516) (169,863)
------------ ------------ -------------
Administrative expenses (663,253) (668,010) (1,347,980)
Expenses of placing 4 - - (136,127)
Total administrative expenses (663,253) (668,010) (1,484,107)
------------ ------------
Loss from operations 5 (666,682) (681,526) (1,653,970)
Finance income - 1,709 1,709
Loss before taxation (666,682) (679,817) (1,652,261)
Taxation - - -
------------ ------------ -------------
Loss for the period (666,682) (679,817) (1,652,261)
------------ ------------ -------------
Loss attributable to:
* Owners of the parent (660,100) (672,393) (1,635,428)
* Non-controlling interests (6,582) (7,424) (16,833)
------------ ------------ -------------
(666,682) (679,817) (1,652,261)
------------ ------------ -------------
Basic and diluted loss per
share - cents 6 (1.87) (2.80) (5.82)
------------ ------------ -------------
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
2019 2018 2018
$ $ $
---------- ---------- -------------
Loss for the period and total comprehensive
income for the period (666,682) (679,817) (1,652,261)
---------- ---------- -------------
Total comprehensive income for the
period attributable to:
Owners of the parent company (660,100) (672,393) (1,635,428)
Non-controlling interests (6,582) (7,424) (16,833)
---------- ---------- -------------
(666,682) (679,817) (1,652,261)
---------- ---------- -------------
Condensed consolidated statement
of
financial position Unaudited Unaudited Audited
30 June 30 June 31 December
Note 2019 2018 2018
$ $ $
------------------- ------------------ ---------------
Non-current assets
Property, plant and equipment
- mining property 7 10,879,130 7,531,057 9,876,697
Intangible assets 8 222,160 253,522 207,160
Total non-current assets 11,101,290 7,784,579 10,083,857
------------------- ------------------
Current assets
Trade and other receivables 9 159,963 449,009 212,516
Cash and cash equivalents 316,393 2,501,811 112,964
---------------
Total current assets 476,356 2,950,820 325,480
------------------- ------------------ ---------------
Total assets 11,577,646 10,735,399 10,409,337
------------------- ------------------ ---------------
Current liabilities
Trade and other payables 10 260,656 363,772 501,301
Total current liabilities 260,656 363,772 501,301
------------------- ------------------ ---------------
Non-current liabilities
Provisions 11 757,702 757,702 757,702
------------------- ------------------ ---------------
Total non-current liabilities 757,702 757,702 757,702
------------------- ------------------ ---------------
Total liabilities 1,018,358 1,121,474 1,259,003
------------------- ------------------ ---------------
Net assets 10,559,288 9,613,925 9,150,334
------------------- ------------------ ---------------
Equity
Share capital 12 - - -
Share premium account 15,226,865 12,927,703 13,362,353
Retained deficit (4,787,412) (3,449,604) (4,338,436)
Translation reserve (18,588) (18,588) (18,588)
Capital and reserves attributable
to the owners of the parent company 10,420,865 9,459,511 9,005,329
Non-controlling interests 138,423 154,414 145,005
Total equity 10,559,288 9,613,925 9,150,334
------------------- ------------------ ---------------
Condensed consolidated statement of changes in equity
Share premium Retained Translation Total Non-controlling Total
deficit reserve interests Equity
$ $ $ $ $ $
Balance at 1 January 2018 9,034,541 (2,876,840) (18,588) 6,193,113 161,838 6,300,951
Loss for the period - (672,393) - (672,393) (7,424) (679,817)
Other comprehensive income -
for
the period - - - - -
-------------- ------------ ------------ ----------- ---------------- -----------
Total comprehensive income
for
the period - (672,393) - (672,393) (7,424) (799,943)
-------------- ------------ ------------ ----------- ---------------- -----------
Shares issued in the period 4,195,901 - - 4,195,901 - 4,195,901
Share issue expenses (302,739) - - (302,739)) - (302,739))
Share-based payments - 99,629 - 99,629 - 99,629
Total contribution by owners 3,893,162 99,629 - 3,992,791 - 3,992,791
-------------- ------------ ------------ ----------- ---------------- -----------
Balance at 30 June 2018 12,927,703 (3,449,604) (18,588) 9,459,511 154,414 9,613,925
Loss for the period - (963,035) - (963,035) (9,409) (972,444)
Other comprehensive income - -
for
the period - - - -
-------------- ------------ ------------ ----------- ---------------- -----------
Total comprehensive income
for
the period - (963,035) - (963,035) (9,409) (972,444)
-------------- ------------ ------------ ----------- ---------------- -----------
Shares issued in the period 457,826 - - 457,826 - 457,826
Share issue expenses (23,176) - - (23,176) - (23,176)
Share-based payments - 74,203 - 74,203 - 74,203
Total contribution by owners 434,650 74,203 - 508,853 - 508,853
-------------- ------------ ------------ ----------- ---------------- -----------
Balance at 31 December 2018 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)
Other comprehensive income -
for
the period - - - - -
-------------- ------------ ------------ ----------- ---------------- -----------
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
-------------- ------------ ------------ ----------- ---------------- -----------
Condensed consolidated statement
of cash flows Unaudited Unaudited Audited
6 months 6 months 12 months
to to to 31 December
30 June 30 June 2018
2019 2018
$ $ $
------------ ------------ ----------------
Loss before taxation (666,682) (679,817) (1,652,261)
Adjustments for:
Depreciation
Share-based payments 211,124 99,629 173,832
Exchange differences - - -
Other reserve movements - (9,742) -
------------ ------------
(455,558) (589,930) (1,478,429)
Changes in working capital
(Increase)/decrease in trade and
other receivables 52,553 (7,543) (198,266)
Increase/(decrease) in trade and
other payables (240,645) 164,010 291,797
------------ ------------ ----------------
Cash (used in)/generated from operating
activities (643,650) (433,463) (1,384,898)
------------ ------------ ----------------
Investing activities
Purchase of intangible assets (15,000) (185,953) (139,591)
Purchase of property, plant and
equipment (1,002,433) (2,248,461) (4,594,101)
Cash transferred with business
combination - - -
Cash acquired with business - - -
------------ ------------
Net cash outflow from investing
activities (1,017,433) (2,434,414) (4,733,692)
------------ ------------
Cash flows from financing activities
Proceeds from the issuance of ordinary
shares 2,105,000 4,195,901 4,653,727
Share calls waiting receipt - (427,216) -
Share-issue expenses (240,488) (302,739) (325,915)
Share-issue expenses waiting payment - - -
Net cash inflow from financing
activities 1,864,512 3,465,946 4,327,812
------------ ------------ ----------------
Cash and cash equivalents at beginning
of period 112,964 1,903,742 1,903,742
Net increase in cash and cash equivalents 203,429 598,069 (1,790,778)
------------ ------------ ----------------
Cash and cash equivalents at end
of period 316,393 2,501,811 112,964
------------ ------------ ----------------
1. Basis of preparation and principal accounting policies
The condensed consolidated interim financial information was
approved for issue by the Board on 16 September 2019.
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.
The Group has adopted IFRS16 Leases effective from 1 January
2019. There was no effect on the Group's consolidated income, net
assets or net liabilities.
Basis of consolidation
Basis of consolidation
The 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.
4. Expenses of placing
Unaudited Unaudited Audited
6 months 6 months 12 months
to to to 31 December
30 June 30 June 2018
2019 2018
$ $ $
----------- ----------- ------------------
Admission to trading on the OTCQX
Market. - - 136,127
----------- ---------- ------------------
In October 2018 the Company was admitted to trading on the OTCQX
Market in New York.
5. Share-based payments
Total administrative expenses include share-based payments of
$211,124 (30 June 2018: $99,629; 31 December 2018: $173,832). The
related credits to equity are taken to the retained deficit.
6. Loss per share Unaudited Unaudited Audited
6 months 6 months 12 months
to to to 31 December
30 June 30 June 2018
2019 2018
$ $ $
------------------- ------------------- -----------------
Loss for the period attributable
to equity holders of the parent
company (660,100) (672,393) (1,635,428)
------------------- ------------------- -----------------
Number Number Number
Weighted average number of ordinary
shares for the purposes of basic
and diluted loss per share 35,701,078 23,657,058 28,120,264
------------------- ------------------- -----------------
Loss per share - basic and diluted
(cents) (1.87) (2.80) (5.82)
------------------- ------------------- -----------------
Non-current assets
Mining Total
7. Property, plant and equipment - mining property Property
$ $
---------------- -------------
Cost or valuation
At 1 January 2018 5,282,596 5,282,596
Additions 2,248,461 2,248,461
At 30 June 2018 7,531,057 7,531,057
Additions 2,345,640 2,345,640
At 31 December 2018 9,876,697 9,876,697
Additions 1,002,433 1,002,433
At 30 June 2019 10,879,130 10,879,130
---------------- -------------
Depreciation
At 30 June 2018, 31 December 2018 and 30 June - -
2019
---------------- -------------
Net book value:
30 June 2018 7,531,057 7,531,057
---------------- -------------
31 December 2018 9,876,697 9,876,697
---------------- -------------
30 June 2019 10,879,130 10,879,130
---------------- -------------
Mining development assets relate to the past producing Empire
Mine copper - gold - silver - 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 early stage in the Company's project to reactivate the
mine.
A provision for decommissioning costs of $100,000 has been
recognised at 30 June 2018, 31 December 2018 and 30 June 2019 based
on directors' estimates and taking into account appropriate
qualified professional advice. The cost of the decommissioning
asset is included within mining development assets.
8. Intangible assets
Exploration
and evaluation
expenditure Total
$ $
---------------- ----------
Cost or valuation
At 1 January 2018 67,569 67,569
Additions 185,953 185,953
---------------- ----------
At 30 June 2018 253,522 253,522
Additions 108,818 108,818
Projects terminated (155,180) (155,180)
---------------- ----------
At 31 December 2018 207,160 207,160
Additions 15,000 15,000
---------------- ----------
At 30 June 2018 222,160 222,160
---------------- ----------
Exploration and evaluation expenditure in the period relates to
the Bighorn and Redcastle cobalt properties for the Group's two
claim blocks on the Idaho Cobalt Belt in the USA. In the second
half of 2018 the Group ceased exploration on the Gordon Lake gold
property in Northwest Territories, Canada and $155,180 was charged
to exploration and evaluation expenditure.
9. Trade and other receivables Unaudited Unaudited Audited
30 June 30 June 31 December
2019 2018 2018
$ $ $
---------- ---------- ------------
Other receivables 135,604 19,813 212,516
Issued shares called but not - 427,216 -
paid
Prepayments 24,359 1,980 -
---------- ---------- ------------
159,963 449,009 212,516
---------- ---------- ------------
10. Trade and other payables Unaudited Unaudited Audited
30 June 30 June 31 December
2019 2018 2018
$ $ $
----------- ----------- ------------
Trade creditors 216,398 352,196 401,231
Other creditors 39,177 - 41,570
Accrued expenses 5,081 11,576 58,500
----------- ----------- ------------
260,656 363,772 501,301
----------- ----------- ------------
11. Provisions Unaudited Unaudited Audited
30 June 30 June 31 December
2019 2018 2018
$ $ $
---------- ---------- ------------
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
2019 2018 2018
Number Number Number
----------- ----------- ------------
Allotted and issued
Ordinary shares with no par value 42,784,881 31,800,075 33,078,999
----------- ----------- ------------
The Ordinary Shares rank pari passu. On 6 February 2019 the
Company issued 5,588,235 new Ordinary Shares at a price of GBP0.17
and on 24 May 2019 the Company issued a further 4,117,647 new
Ordinary shares at a price of GBP0.17.
Notes
Phoenix Copper Limited is a North American focused, base and
precious metal explorer and developer, which is fast-tracking the
historically-producing Empire Mine in Idaho, USA, back into
production, and exploring for cobalt in Idaho.
Phoenix's flagship project is a brownfield, past producing,
copper, gold, silver, zinc and tungsten underground mine, the
Empire Mine near Mackay in Idaho. Phoenix acquired an 80% interest
in the property in 2015. 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 June 2018 a drilling campaign consisting of 8,600
metres in 93 holes was started and completed in late 2018. This
programme was designed to upgrade and increase the oxide resources,
provide samples for ongoing metallurgical testwork, 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 resulted
in an increase from the PEA resources of 37% contained copper and
108% contained zinc. This resource has been used for this economic
analysis and will now be used as the basis for the Bankable
Feasibility Study ("BFS") scheduled for completion in 2020.
At Empire, it is estimated that only 1 to 2% of the potential
ore system has been explored to date and, accordingly, there is
significant opportunity to increase the resource through phased
exploration; the current resources relate to the oxide resource
only, with the exception of the Red Star discovery "Inferred"
resource, which remains open along strike and does not include the
deeper, higher grade sulphides. In addition, Phoenix has increased
the claim area from 818 acres at the time of its acquisition to
5,717 acres, mainly to the northwest and west, and in so doing has
increased the potential for additional oxide and sulphide resources
by a total strike length of approximately 2,500 metres towards
another brownfield mine, the Horseshoe Mine, which is now within
the property boundary.
The Company also holds two prospective cobalt properties in
Idaho, US, which are located north of the Empire Mine. These are
situated close to the town of Cobalt and are close to projects
being advanced by Canadian junior miners, including eCobalt
Solutions and First Cobalt. Fieldwork, consisting of mapping and
sampling and locating drill holes for the 2019 drilling programme,
has been completed.
With a management team that has successfully constructed,
commissioned and operated mines and low risk, mining-friendly
jurisdictions with excellent infrastructure, Phoenix is looking to
fulfil its ambitions to become a mid-tier base metal, precious
metal and cobalt production company, offering exposure to high
value and high demand metals with compelling demand/supply
fundamentals.
More details on the Company, its assets and its objectives can
be found on PXC's website at www.phoenixcopperlimited.
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 SFEFIDFUSEIU
(END) Dow Jones Newswires
September 16, 2019 02:00 ET (06:00 GMT)
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