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PXC Phoenix Copper Limited

0.00 (0.00%)
24 May 2024 - Closed
Delayed by 15 minutes
Phoenix Copper Investors - PXC

Phoenix Copper Investors - PXC

Share Name Share Symbol Market Stock Type
Phoenix Copper Limited PXC London Ordinary Share
  Price Change Price Change % Share Price Last Trade
0.00 0.00% 19.25 16:11:26
Open Price Low Price High Price Close Price Previous Close
19.25 19.00 19.25 19.25 19.25
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Posted at 21/5/2024 10:09 by kooba
DP remember this..
The company had told investors it would not dilute their holdings with any further share issues, so it opted for a bond linked to the copper price, Edwards-Jones added.

Just saying.

Issuing shares for 25% of the company for zero cost is very dilutive and the shares are free from a shareholder perspective as there is zero price paid.
Not all bond issues would carry such an arrangement fee ..but as you say this is not normal for a number of reasons.

No good saying that investors should have expected a quarter of the equity to be issued for free as that has never been alighted to in any way by the company until it dropped.

The funding maybe a big positive and get the whole project up and running but the single investor situation and the lack of detail in planning remains a concern for me.
Posted at 20/5/2024 19:45 by kooba's a simple guide to a bankable feasibility study might be of interest and certainly is normally the minimum required to raise any serious funding..from a bank or PXC confirmed themselves. There are good reasons for this kind of detail being achieved.
Posted at 16/5/2024 13:01 by donald pond
Since Phoenix Copper announced that it has received subscriptions for $80m of copper-linked bonds, I have had a large number of investors contact me asking for further background information. I’ve attempted to identify the most common questions and to answer them as follow:

1) How much do you know about the investor?

The board have been speaking to the bond investor over a period of 18 months. His background is as an entrepreneur, which is why he is willing to invest in the Empire project without having a bankable feasibility study. He sees the opportunity and wants to be a strategic, long term investor in Phoenix, and to help the company achieve a substantially higher market cap.

The company can also confirm that all compliance, anti-money laundering and client due diligence checks that are required by regulation imposed on multiple entities have been completed. The London market is among the most heavily regulated in the world, and the investor has met all of the requirements.

Some investors have found one or two “colourfulR21; stories about the investor. He is an extremely successful entrepreneur who has passed all compliance checks and has contractually agreed to provide Phoenix with $80m of funding. We believe having the support of someone who is willing to make decisions and back his judgment is of great value to the company.

The board are confident that the investor is aligned with the company’s goals and are delighted to have secured the financing that will enable the Empire mine to be brought into production.

2) What is the position of Exgen?

Exgen own 20% of Konnex, the holding company of the Empire site. Phoenix own the remaining 80%. Under the terms of an agreement between the parties, each is required to fund the development of the mine in proportion to their shareholding.

There are certain formalities that need to be completed before a “call” can be made on Exgen to provide their share of the funding. Phoenix is working on the assumption that Exgen will provide their share of the funding, but if they cannot, there is a mechanism for their share to be diluted to reflect the relative contributions made to Konnex.

Importantly, the $80m that has been raised has been judged to be sufficient to bring the mine into production, and includes both a contingency and an allowance for making interest payments on the bonds.

3) When will we get an economic study for the mine?

Following the AGM, and the first drawdown of bonds, the company expects to purchase a number of key items of equipment. It is anticipated that these, the majority of which have been identified within a reasonable distance of the mine, will be bought at a significant discount to the as new price. In the Annual Report we mentioned the laboratory equipment, ball mills and disk filtration circuit for filtration and dewatering of process tails that have already been acquired. These key purchases were all made at a fraction of the new price.

When drafting a PFS, the regulations demand that equipment to be acquired is priced at cost price plus 25% contingency. As we will only be producing one PFS, it is important that it accurately reflects the actual costs of the project.

The Annual report set out the assumption that the cost of mining would be a little under $21 per tonne, and last week we published our first reserves statement. These are the result of extensive work carried out by the company and are key pieces of information that will form a key part of the process to calculate the economics of the Empire open pit.

4) How will we pay interest on the bonds?

Interest on the bonds will eventually be paid from the production from the mine. In the period before production, the company will hold back a portion of the funds advanced and place them in an escrow account. It is important to highlight once again that the company is confident that it will be able to bring the mine into production and to service the coupon payable under the bonds from the $80m subscription.

Interest is payable at a rate that is the higher of either 8.5% or the amount, on a sliding scale linked to the price of copper, up to 20%. At present, we are very close to the tipping point where the interest rate would be linked to the copper price. However, the benefit of any increase in the copper price will feed into the economics of the project. As a rough guide, once in production the company will benefit from 80-90% of the upside in the copper price, with the balance going to increases in interest payable.
Posted at 16/5/2024 10:24 by kooba
Investorman33"KoobaI've seen donald pond (as investor relations) say on a few occasions that 2nd hand equipment will be bought before pfs is published - and reason for placing 2 months ago was to buy 2nd hand equipment as well. so story has been consistent"I am aware of the fundraise and reason was to purchase specific plant which they announced was done and the forecast release of PFS end Q1begining Q2 was confirmed at the time.There has been no "Official" change in that expected timetable ..apart from it has been stated before communication through closed user groups on social media is not an acceptable way of giving information and guidance to your shareholders. If it were where is the economic analysis promised on the 24th April within a week or so was this to be done when the CEO is still scouting for more plant??So less than 5 years to can really access the cost of the bond funding on that ...oh there is a bit of a problem as we will have lost the mine by then!
Posted at 16/5/2024 09:52 by tim000
Thanks investorman. I’m not a commercial banker by profession, so don’t know what covenants would be normal for this type of finance. Obviously any covenants that address the risk of default, such as late payment of interest or capital, are the ones of most interest. Small companies with no revenues and a single mine in development are risky affairs, no matter what PXC management say, and there have been several complete write-offs on the LSE in recent years, of which HZM today is just the latest. They too told investors wonderful stories of future cashflow. But the project turned out to be completely unmanageable.
Posted at 07/5/2024 16:39 by kooba
Only thing with the "positive" of a reserves report probably indicates they are not that close to producing the full PFS report and this has been put out in an attempt to pacify investors and put something out . But why put this out in isolation if PFS is close? Unfortunately no indication given in this rns. One of the company's many brokers seems more upbeat."Phoenix Copper's reserve statement for the Empire open pit in Idaho is an important step forward, according to WH Ireland.With an advanced project in mining-friendly Idaho, Phoenix is now well positioned to benefit from surging demand and strong copper prices, said the broker.A pre-feasibility study is ongoing and WHI expects the numbers to be reported shortly."As an indication of the direction of travel, we remind readers that Phoenix recently announced the advanced purchase of second-hand ball mills."This purchase introduces significant time and cost savings compared to buying new and will enhance the economics of the pre-feasibility study once reported."Shares were 16.5p, down 3% today."
Posted at 01/5/2024 12:58 by kooba
Not my intention ..but tell me then what has caused a spike when official information from the company has not changed and they are already late in delivering the PFS (officially end Q1 beginning Q2).The only thing I am aware of is this SM post last week confirming slightly changed timetables and what might be delivered and talking of when information will be given at the AGM ..though no results yet !! All adding to expectation on timing and certainly appearing to have influenced the price. If you think an employee of the company posting such information to a small group of shareholders on social media is appropriate and provides a level playing field for investors then you are mistaken.I seem to remember that the FD posted the funding will be in place in 3 weeks kind of post too, that again prompted a major spike at the end of last year , was that also a harmless comment on timing ? In terms of share price impact what transpired it appears straight forward misinformation that likely cost investors who jumped in on it.They need to tidy up their act and put out regulated announcements properly when they have something to say and stop puffing on social media ...time they delivered on their promises not talk about it and move the goalposts again.
Posted at 19/1/2024 09:57 by haveapunt1
Also, what level of interest from investors? Another area the company court easily shed light on through an investor meet company or similar. There is interest and there is serious interest, yet investors are left second guessing.

Economic model 99.5% complete - but it’s going to take another 3-4 months to finish that 0.5% when the commercial metrics where issues over a year ago and openly published though PR? Hopefully you see my point re the company making it up as they go along. They have had months to finish the economic plan, and it’s naive not to think doing this would give them a huge carrot to dangle in front of potential investors yet they seem to have gone to the bond market with “yeah mate we think it’s about $800 revenue”. Naive.

The commercial viability should have been totally nailed before even looking at investors parting with $80mil on a company with assests to support this of less the one third.

As I say, it’s either utter naivety, or incompetence - if I am wrong I apologise but this is where the company need to help investors to understand!

I’d also love to question them on their plans for cost reductions as a board of directors to show they are with shareholders rather than simply raising funds to self fund their salaries
Posted at 18/1/2024 21:26 by haveapunt1
I think it’s even easier that than saucepan.

In my head I’m applying simple logic again.

We were told the existing facility was not being extended and needed to be rolled into a bigger facility for working capital. This RF loan expires 24 march.

We are now told that the PFS is back on the table to be completed in the spring

For me, it’s clear that they have known for some time bonds will not be issued for a while, maybe logic also suggests that interest has been not as good as expected without the PFS. For me this is schoolboy error number 1. They should have had all this ironed out BEFORE seeking investors. The final PFS is the carrot!

Now they have understood this, the decision was made to enter a new RF facility to keep the lights on, as the intention is to complete PFS and then go back and try again in the summer (hence the new need for more working capital).

My frustration is (as Trek sums up on LSE) is the manner in which the company hides news until the last minute and even now hasn’t been transparent.

Just say we made an error the funders want a full economic model (the norm) so that’s what we doing. Yes price would sink but at least then investors have a clear choice based on facts. As it stands we had investors buying at 30p plus based on hype by the board. This bond issue hasn’t been something that’s come to light the last month! It’s not how it works.

Everything has become second guessing which I don’t like any longer. I mean, how long can you be in advanced discussions!

My guess is bonds with settlement agent, investors what more detail to be tempted, PXC have opted to finish PFS then go try again with more “meat on the bones”. I have no issue with that, but at least don’t treat holders as mugs

Sold out at a heavy loss but will wait until funding now. The closer it gets to march the more likely it’s looking to drop into single digests
Posted at 20/10/2023 17:40 by seagreen

Please answer the question your response implies you simply do not know?

I find your response totally uncompelling.

It is irelevant what you think or imagine or what anyone else imagines?

You state:

"Bank financing needs a full economic model. Bond financing is more novel and needs whatever the investors require. I imagine they would want to have some sort of economic model, though the degree of detail would be much less than a bank requires."

"It will need some sort of economic study, though the last metallurgy RNS gave some idea on that front, and I assume it is only going to get better."


You state:

"And you keep claiming I said the permit depended on the weather. I didn't. I said the permit would be issued after we apply for it and the authorities have the opportunity to go and verify the environmental data. That requires the land to be clear of snow. So they need the summer season to do those checks."

"But I don't think any funding will wait on the permit."

Firstly your response clearly is weather dependent and will not be completed until the summer (that is weather in my book)


In the absence of precise simple answers all your doing is blowing PR smoke up your faithful desciples backsides who have made a few bob on trading who will not even entertain honest questions.

If you want to attract new investors state some facts not your views.

If in fact the investors requirements do not require a permit and do not require a full economic model or require a simple model just say it

Now that would be good IR or PR not waffle

Investors and potential investors deserve to know otherwise they will think you do not even know what is required to get investors to invest, which clearly you do not but the BOD must?

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