REG - Phoenix Copper Ltd - Conditional Subscription for $80m of Copper Bonds

Phoenix CopperAnnouncement

15/05/2024 16:45

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RNS Number : 6071O  Phoenix Copper Limited  15 May 2024

Phoenix Copper Limited / Ticker: PXC / Sector: Mining

15 May 2024

Phoenix Copper Limited

('Phoenix' or the 'Company')

 

 Conditional Subscription for US$80 million of Corporate Copper Bonds due
2029 to 2033

 

 

Phoenix Copper Ltd (AIM: PXC, OTCQX ADR: PXCLY), the AIM quoted USA focused
base and precious metals emerging producer and exploration company, is pleased
to report that its corporate copper bond issue (the "Bonds") has been fully
subscribed for a principal value of US$80 million (before Bonds issue
expenses).

 

The Company has entered into a subscription agreement with NIU Invest SE, a
European private equity investment company (the "Bonds Investor"), pursuant to
which the Bonds Investor has subscribed for US$80 million of Bonds, subject to
certain conditions being met. The Bonds will be drawn down in tranches in
accordance with a drawdown schedule in order to fully fund the construction of
the Company's Empire Open-Pit Mine in Idaho, USA (the "Empire Mine") for the
production of copper, gold and silver, and for general working capital.

 

Subject to the Directors being granted the authority to allot relevant
securities at the Company's forthcoming Annual General Meeting ("AGM"),
scheduled to be held on 29 May 2024, unless and until agreed otherwise, the
Bonds will be drawn down as to US$5,000,000 on or around 31 May 2024 (the
"Initial Drawdown"), US$5,000,000 on or around 30 June 2024, US$20,000,000 on
or around 31 August 2024, and the balance of US$50,000,000 in two tranches
during the first half of 2025.

 

The Bonds are not convertible. However, subject to the Initial Drawdown being
received, the Company has agreed to pay the Bonds Investor an arrangement fee
by way of an issue of 33.88 million new ordinary shares of no par value in the
Company ("New Ordinary Shares"), and a drawdown fee by way of warrants to
subscribe at no cost for a further 22.59 million New Ordinary Shares (the
"Warrants"). The Warrants will vest pro-rata over drawdown of the first US$30
million of Bonds, and remain valid for a period of five years from Initial
Drawdown. On a fully diluted basis, the Bonds Investor will have the right to
accumulate up to a 25% strategic investment in the Company over a five-year
period, based on the current issued share capital of the Company.

 

Further information on NIU Invest SE can be found on https://niu-invest.com
(https://niu-invest.com) . NIU Invest SE is wholly owned by Mr Cevdet Caner,
an Austrian entrepreneur.

 

Bond Terms

 

As disclosed in the Company's interim accounts dated 28 September 2023, the
Company approved the creation of a class of Floating Rate Secured Minimum 8.5%
Bonds due 2029 to 2033 in an authorised amount of US$300 million, in
anticipation of closing the initial tranche required to construct the Empire
Mine. The Bonds will pay a floating rate coupon subject to a minimum of 8.5%
per annum and a maximum of 20% per annum. The coupon is calculated as to the
higher of a copper price coupon linked to the copper price on the London Metal
Exchange, or an interest rate coupon linked to the US Federal Discount Rate.
The coupon is payable semi-annually on 30 June and 31 December and will be
payable on the principal value of Bonds drawn down. The coupons payable on 31
December 2024 and 30 June 2025 will be escrowed at 8.5% with the Escrow Agent,
pending payment.

 

The Bonds are not convertible, are secured over the Company's interests in the
Empire Mine, and have a final maturity date of 10 years with the Bonds
Investor's option to request redemption at principal value after six years and
the Company's option to offer redemption at a 10% premium to principal value
after five years. M&G Trustee Company Limited is acting as Security
Trustee and Escrow Agent, and The Bank of New York Mellon as Custodian and
Transfer, Paying and Settlement Agent. The Bonds have already been issued and
are currently held by the Settlement Agent on behalf of the Company, pending
onward transfer to the Bonds Investor. It is the Company's intention for the
Bonds to be listed on a recognised European stock exchange and further
information regarding this will be announced in due course.

 

Environmental, Social, and Corporate Governance ("ESG")

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 to further the permitting process, but as
importantly, will be used as the building blocks for the Company's ongoing ESG
platform, overseen by the Company's ESG & Sustainability Committee. The
Company also publishes annual Sustainability Reports, which can be viewed on
the Company's website.

 

Market Abuse Regulation ("MAR") Disclosure

The Company deems the information contained within this announcement to
constitute inside information as stipulated under the Market Abuse Regulations
(EU) No. 596/2014, which has been incorporated into UK law by the European
Union (Withdrawal) Act 2018. Upon the publication of this announcement via the
Regulatory Information Service, this inside information is now considered to
be in the public domain.

 

Contacts

For further information please visit  https://phoenixcopperlimited.com
(https://phoenixcopperlimited.com/) , or contact:

 Phoenix Copper Limited                               Ryan McDermott                                     Tel: +1 208 954 7039

                                                      Brittany Lock                                      Tel: +1 208 794 8033

                                                      Richard Wilkins                                    Tel: +44 7590 216 657
 SP Angel Corporate Finance LLP (Nominated Adviser)   David Hignell / Caroline Rowe/ Kasia Brzozowska    Tel: +44 20 3470 0470
 Tavira Financial Limited (Joint Broker)              Jonathan Evans / Oliver Stansfield                 Tel: +44 20 7100 5100

 WH Ireland (Joint Broker)                            Harry Ansell / Katy Mitchell                       Tel: +44 20 7220 1666
 Panmure Gordon (UK) Limited (Joint Broker)           Mark Murphy / Will Goode / Joseph Tan              Tel: +44 20 7886 2500
 EAS Advisors (US Corporate Adviser)                  Matt Bonner / Rogier de la Rambelje                Tel: +1 (646) 495-2225
 BlytheRay                                            Tim Blythe / Megan Ray                             Tel: +44 20 7138 3204

(Financial PR)

Notes

Phoenix Copper Limited is an emerging producer and exploration company
specializing in base and precious metals, with an initial focus on copper,
gold, and silver extraction from an open-pit mining operation within the
United States.

 

Located in the historic Alder Creek mining district near Mackay, Idaho,
Phoenix's flagship asset is the Empire Mine, in which the Company holds an 80%
ownership stake. The historic Empire underground mine, located beneath the
surface of the Company's proposed open pit, boasts a rich history of producing
high-grade copper, gold, silver, zinc, and tungsten.

 

Since 2017, Phoenix has executed extensive drilling initiatives, resulting in
an expansion of the Empire Open-Pit resource by over 200%. In May 2024 the
Company published its inaugural mineral reserve statement for the Empire
Open-Pit mine. Proven & Probable mineral reserves are 10.1 million tonnes
containing 109,487,970 lbs of copper, 104,000 ounces of gold and 4,654,400
ounces of silver. This reserve was estimated using assay data from 485 drill
holes, extensive geological modelling, metallurgical recovery test work,
geotechnical evaluation, and mine design.

 

In addition to the Empire Mine, Phoenix's holdings in the district also
encompass the Horseshoe, White Knob, and Blue Bird Mines, all of which have
been producers of copper, gold, silver, zinc, lead, and tungsten from
underground operations, a new high-grade silver and lead orebody at Red Star,
and the Navarre Creek gold exploration project, which was first drilled in
2023. The Company's land package at Empire spans 8,434 acres (34.13 sq km).

 

Phoenix also owns two cobalt properties situated along the Idaho Cobalt Belt
to the north of Empire. An Earn-In Agreement has been established with Electra
Battery Materials, Toronto, concerning one of these properties.

 

Phoenix is listed on London's AIM (PXC), and trades on New York's OTCQX
Market (PXCLF and PXCLY (ADRs)). More details on the Company, its assets and
its objectives can be found on PXC's website
at  https://phoenixcopperlimited.com/
(https://nam11.safelinks.protection.outlook.com/?url=https%3A%2F%2Fphoenixcopperlimited.com%2F&data=05%7C02%7Cpaul.degruchy%40phoenixcopper.com%7Cd3c94638cd2a404fd97908dc4457be72%7C0ab43313efbd470e8b202b53ae10513d%7C0%7C0%7C638460390942473879%7CUnknown%7CTWFpbGZsb3d8eyJWIjoiMC4wLjAwMDAiLCJQIjoiV2luMzIiLCJBTiI6Ik1haWwiLCJXVCI6Mn0%3D%7C0%7C%7C%7C&sdata=zDJLf9dFwaNJhQmfkjPJtPnIxiqtCJb%2F1IuX1s1r7kQ%3D&reserved=0)

 

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