Phoenix Copper Share Discussion Threads

[the_debt_collector] 20/2/2020 19:49

Pants

I have to say my research extended to the listing document which I find enthralling, always a stickler for detail.....

I note that the company paid the directors £180,000 so they could buy shares in Phoenix, that's a new one on me.

I note that prior to IPO circa 40m shares were issued at around 2p verses the listing price of 4p (115m issued) Do you know who acquired these shares, I would imagine the recipients would be delighted with circa 100% gain some months later, could this explain why the aftermarket was so poor ?

I find director wages and salaries staggering at £730,000 paid in FY 2018, compare that to the current £4m market valuation.

The revelation the company paid it's directors to buy shares is very unsettling no matter what the circumstances as are the high remuneration levels, onlookers must decide if this is a lifestyle company or not and make their own judgement.

[pantsonfire] 19/2/2020 14:45

I’m glad you agree that the dilution was not the 300% you described. However, my calculations cannot get near to your number. Your insinuation about the directors (and their seed price) I believe has no place. The remainder of your postings have in the main been opinions, which you are obviously entitled to, but which I believe are wide of the mark.
In my opinion, you continue to misunderstand the investment to date, and the value, as I stated earlier, so we will differ no many how many times each of us comments. Environmental investigations for example, are an essential component of any project of this nature, at this stage. Those people on the site are, I believe, making steady progress with this project, doing exactly what is required, and in the right order.
You are obviously an intelligent person by your analysis, but in my opinion, the conversion to active construction project is so close now that any fund raise will be small compared to the opportunity. And here we have the main difference of opinions. I am convinced that in 24 months time you will be upset you did not invest today. Please do come back in 24 months and let’s see. If I’m wrong, I’ll buy you dinner!
In my opinion, the present value of the company is not reflected in the share price, but I believe that’s an issue of risk as perceived by outsiders, and I genuinely believe this will change shortly.

[the_debt_collector] 17/2/2020 19:16

Pants

You have gone through my post with a fine tooth comb, as such it deserves a reply.

In respect of dilution, the IPO RNS clearly shows 115m shares (or 11.5m now) were issued onto AIM, there were circa 13m seed shares before IPO, since IPO another circa 21m issued, so dilution is 200%, not 300% but still a significant number.

Clearly directors have a nice fill of those seed capital shares which were issued at a fraction of the IPO price one assumes, I could look at the full listing document but I have no time.

We agree that £10m has been raised in 30 months, however and unfortunately, the BOD do not seem familiar with the mechanics of AIM, basically small exploration companies with no revenue are usually targeted by the shorting community that can forward sell the next placing - 3 placings in 9 months I note (May 18 to Feb 2019) hence the plummeting share price.

We agree that IPO shareholders are currently sitting on significant loss, from circa 30p to current.

With respect to money spent being waisted, well this is a matter of opinion, £10m spent in under 3 years and the company is now valued at £4m. Significant cash, north of $30m, will be needed to get just one project into production and production is still some way off.

In respect of the move to loan notes, my view is this has been forced on the company as equity is near worthless and market funding conditions poor for juniors. Loan notes are dilutive when converted so existing equity will be diluted further unless the company can pay back the loans in cash (unlikely)

AIM is littered with early stage exploration/production companies, very few win (see EUA or GGP) for investors, you suggest the market will re-rate PXC, this will happen only when it can see a way to production, this means funding needs to be secured (debt) then there are the usual operational hurdles to overcome.

The BOD also implied that the US listing would drive value, I think I commented this was a fairy tale at the time, the admin cost of consolidation and cost of the listing must have been high. Was it worthwhile, many would say no.

The best way to deliver value is to find a deep pocketed JV partner or sell one project (are there buyers?) to fund the other. Do that and shareholders would be happy and the market would look up.

There are also weaknesses in the way they promote this company in my considered opinion, I would have gone about it in an entirely different way, it is necessary to excite the market and there are ways to do it. Most AIM directors have no understanding of how to promote.

Anyway enough for now.

[zaphod99] 17/2/2020 08:49

New presentation available on the website:hTTps://phoenixcopperlimited.com/pxc-media-and-presentations

[zaphod99] 17/2/2020 07:03

Phoenix Copper Limited / Ticker: PXC / Sector: Mining 17 February 2020Phoenix Copper Limited("Phoenix" or the "Company") Appointment of WH Ireland as Joint Broker Phoenix Copper Ltd (AIM: PXC; OTCQX: PXCLF), the AIM quoted North American focused base and precious metals exploration and development company, is pleased to announce the appointment of WH Ireland Ltd as Joint Broker with immediate effect.Marcus Edwards-Jones, Chairman, commented:"We welcome the appointment of WH Ireland as Joint Broker. Their role will also include market making and research coverage. This appointment cements a long-standing relationship between our two organisations. WH Ireland has a strong retail following with offices throughout the UK and we look forward to working together."

[pantsonfire] 13/2/2020 12:19

Hello the_debt_collector. You have issued a damnation of this company, and suggested that “more money waisted (sic) on studies that will deliver no shareholder value for years, if ever” and “Prospective investors beware, a fund-raise is ALWAYS just around the corner”. You then go on to list “The Facts”.
In my definition, a “fact” is “a thing that is known or proved to be true”. On this basis your use of the word “fact” is not appropriate.
Let us take your statements and respond to all of them. I base my response on publically available information, generally from the company.
# You wrote “In 30 months this small company has …. diluted IPO investors by 300%”.This is rubbish. At IPO Phoenix had approx. 23m shares (as consolidated) in issue. They now have approx. 44.8m, which is a dilution of 95%. However, many of the IPO investors also invested in subsequent financings and have therefore protected themselves against dilution.
# You imply that Phoenix has wasted £10m raised. They haven’t. Interim (June 2019) consolidated accounts show that they are carrying Empire and the cobalt at just over $11m. That value has obviously increased since. This is not money that has been thrown away into the P&L account. Also, most of that value is represented by a shareholder loan from Phoenix to Konnex (earning 6% interest pa), and will be recovered in cash when Konnex goes into production, thereby enabling Phoenix to consider paying dividends.
# You say that Phoenix have too many projects. Empire is one project (with lots of different parts therein). You obviously do not understand the company. Phoenix has been clear that they have always tried to focus on one part only. Initially the open pit, but they then discovered Red Star. RS has much better economics and is quite rightly now the sole focus. RS has a better NPV and IRR at current metal prices, lower capex, and is on patented land. So it will be quicker to permit (and the completion of the environmental work is a significant step in this process). That shows flexibility.
# In your first line you wrote “The Empire mine has been mothballed”. That’s rubbish. You obviously have no idea of the company or the opportunity. Just look on the company web site front page, and you will see the words “The Empire Mine Project”. And on the map you will see all these different mineralisations contained within.
# Then you damned the environmental study “more money waised (sic)”. To suggest the money on the environmental studies has been wasted is rubbish. Empire is effectively one (potentially very) large project with different bits that can be focussed on. They have therefore done the environmental work on the main Empire site which covers the open pit and the underground beneath it. Whilst working on the open pit they discovered Red Star. Red Star is in the same location and therefore was already being covered by the studies. Effectively, therefore, Phoenix now has three environmental studies for the price of one, covering the open pit, Red Star and the underground. Damn good value! Where was the money wasted in that?
# You say a financing is always coming. Yes, Phoenix needs money, but the emphasis now, and which has been made very clear indeed, is on loan notes which are far less dilutive than equity. Phoenix has stated that they will continue this emphasis until they are ready to put together the construction finance, which they hope to do later this year. And they intend to minimise dilution in the construction finance as well. RS is very financeable and there will be no need to finance it with 100% equity.
# I do agree with you regarding the fall in share price, but in my opinion the company is doing what it can to address this. It is only a matter of time before the market buys into the story and starts to value it correctly. And it is not helped by an inaccurate posting such as yours. If you are a holder in this share (can you tell us please), then I suggest you communicate your fears to the board, who I know are very open to exchange with their shareholders. If you are not a shareholder, could I suggest you improve your research before posting?
Let me issue my own personal opinion (not offered as advice, please note), based on the facts of this company. Based on company information, The Phoenix is a top opportunity to get into an early mining project through the Empire Mine Project. Feasibility studies have been performed which demonstrate a pay-back of under a year for just one aspect of the project (Red Star), where they are planning to start production before end 2021. Environmental studies have been completed showing no issues. Further and much larger opportunities remain to be worked on. The board of highly qualified and experienced professionals is committed to its success, and appear to be working to advance the project through a maximum of non-dilutive finance.

[goldrush] 12/2/2020 10:35

tdc

But the work also applies to the Red Star area.....

Mr McDermott is getting his ducks in a row....IMHO

[the_debt_collector] 12/2/2020 07:38

Fine except the Empire project has been mothballed - more money waisted on studies that will deliver no shareholder value for years, if ever.



Some facts..........

In 30 months this small company has raised £10m
Has diluted IPO investors by 300%
Lost IPO investors 70% of their initial entry point cash
Shares have fallen from 40p on listing to 11p
Current burn is £350k a month

Typical AIM company, blaming market conditions despite selected junior resource stocks multi bagging over the same period.

Too many projects for a junior to carry.

Prospective investors beware, a fund-raise is ALWAYS just around the corner.

[mrmcnee] 04/2/2020 10:46

I have had a look at the presentations on the website all looks impressive except for the fact that copper has, once again, crashed in price and silver/lead investments are not the range with many investing casualties in the sector (anyone remember Arian Silver)

I think Debt Collector is probably short but the points being made are valid, further research shows they have raised around £9.75m in a very short space of time and sit with a market value of £4m.

Early bird shareholders are sitting on huge losses and that is not what you want for those initial backers.

All the fuss over a US listing achieved nothing so far, no real explanation as to why from the BOD who at the time were pumping this as a value driving event.

I think the Board are not market savvy over how to promote the story, I note the BOD are a mature bunch so that probably explains this - it is essential to draw in retail investors and they have failed to do this.

In all a bit of a sorry assessment from myself but I will continue to watch events closely, in a nutshell they need to deliver something material to excite the market.

[zaphod99] 29/1/2020 13:32

Thanks meanreverter.Doesn't look like licencing in Idaho will be a stumbling block for miners unlike in many other mining jurisdictions throughout the world.I've updated the header of this thread with Mining Journal's latest risk chart that shows Idaho as having improved it's ranking from last year by several points to be the outright leader.

[meanreverter] 29/1/2020 12:50

Video about mining regulation in Idaho:

[the_debt_collector] 27/1/2020 15:24

So it seems PXC are moving to production of silver & lead in 2021, all well and good except they need to raise $30m + fund ongoing G&A costs to boot.

That $30m is 5 times their current market value, not forgetting operational 'challenges' that always occur early doors in the process.

This is still an 'avoid' in my book - more dilution is inevitable.

[pantsonfire] 26/1/2020 15:15

Hi MrMcnee, I was at the recent shareholder meeting with some of the directors. They are not ditching the Empire mine at all, and indeed all the resources are within proximate territories. During exploration work for Empire they discovered an easier to exploit/better return deposit, on the same territory. If you look at the presentation I've linked to below, you can see on page 13 the geographic proximity in a photograph, and in a map on page 15. The Empire mine remains there for the next phase, and they remain positive about it. Meanwhile the Red Star deposit looks to have a payback of under a year. That's pretty dramatic.
hxxps://static1.squarespace.com/static/5914577386e6c0cd77e15c74/t/5dada2ed218aa17443caa360/1571660546946/WEBSITE+USE+Phoenix+Copper+Presentation+Oct+2019.pdf

[mrmcnee] 26/1/2020 10:22

Been following the story, but not invested yet and am still struggling to see near term value.

So are we now saying that they have changed policy ? Have they not already spent a ton of cash on Empire and have now decided to mothball it ?

It does seem a rather strange time ditch Empire given the copper price has been depressed for a long time and seems to be picking up.

[zaphod99] 25/1/2020 17:22

Last week's RNS confirms that board were spot on when they changed tack to concentrate on Red Star rather than continue to prioritise Empire whilst the copper price remains below expectations and vulnerable to the ongoing trade wars and the fallout from the Chinese coronavirus outbreak.

Although the Empire open pit copper project remains viable even at the current lowish copper price, it's clearly been trumped by the Red Star silver/lead discovery.

Lower capex, better potential NPV and IRR figures and an even faster route to production.

The funds raised via the loan notes recently have been put to good use and we now have a better project that can be brought into production as early as the tail end of next year.

I spoke to the company last week and the message I took was that based on the recent positive sample results at Red Star, the initial 3 holes that generated a resource of 500,000oz silver (or 1.6 million oz silver equivalent when including the other metals) could be increased by a multiple of 7 times since the plan is to drill a further 21 holes approx, also funded as far as possible by loan notes to minimise dilution.

As stated in the RNS, the capital costs are expected to be in the region of US$30 million but one of the benefits of having a CEO with local knowledge and local contacts is the possibility of reducing the capex to closer to $20m if they can source quality second-hand plant and machinery.

Financing for the mine construction is likely be more debt rather than equity based and will likely come primarily via specialist mining finance firms with the possibly of involvement by US-based private wealth individuals.

Debt payback period could be as short as around 2 years.

Red Star remains open at both ends so further exploration is likely to result in higher resource figures, improved economics and to add years to the mine's life expectancy. All on patented land so licencing will be straightforward and rapid.

In the meantime, whilst Red Star is being accelerated, the Empire open pit will be on hold but primed and ready to go at hopefully a much higher copper price, when the time is right.

Not forgetting of course that we also have a couple of other irons in the fire in the Navarre Creek gold prospect and the 2 cobalt prospects further north. I believe there is significant interest from other parties about potential partnership deals which I expect we'll hear about in due course.

Once we're in production the resultant cash-flow will open up all sorts of opportunities to exploit the other 99% of the ore system that hasn't been touched yet.

2020 looks like being a very interesting and transformative year for Phoenix.

[pantsonfire] 23/1/2020 12:46

Re your excellent question SOS, in the December meeting company management said that they are currently financing via loan notes and plan to maximise this, so minimising dilution. They did say that they not could rule out some equity for the construction finance but I think the current activity clearly indicates their commitment to minimise future dilution. Since management have a significant share in the company personally, I think we can see that they do genuinely own this intent. But it is a good question, and I hope the company will respond to shareholders shortly clarifying the route forward.

[goldrush] 23/1/2020 07:57

That's a better RNS IMHO.

[sos100] 23/1/2020 07:10

"Whilst our focus will be production from Red Star, anticipated in 2021, the Company will also be evaluating alternatives for the Empire Mine's open pit copper project in an attempt to improve on the revenue, operating and capital cost estimates. The completion of the feasibility study for this project will be accelerated in a more attractive copper price environment.


--

how are they going to finance this?

[zaphod99] 23/1/2020 07:06

Phoenix Copper Limited Red Star Vein Strike Length Extended to 320-MetresSource: UK Regulatory (RNS & others)TIDMPXCRNS Number : 6466APhoenix Copper Limited23 January 2020Phoenix Copper Limited / Ticker: PXC / Sector: Mining23 January 2020Phoenix Copper Limited (the "Company" or "Phoenix")Red Star vein strike length extended to 320-metres and open on both endsTwo additional veins identified in road cutsPhoenix Copper Ltd (AIM: PXC, OTCQX: PGMLF), the AIM quoted North American focused base and precious metals exploration and development company, is pleased to announce the results of ongoing exploration at the Company's Red Star silver deposit, ("Red Star" or the "Red Star Zone") adjacent to the Company's Empire copper deposit in Idaho, USA.Sampling Programme Highlights -- Red Star vein now measured along 320m - open at both ends -- Surface sampling results returned similar values to those from the outcrop that forms the current maiden NI 43-101 Resource -- Two additional veins have been exposed to the southeast -- All of the new vein exposures are situated on the patented Empire property -- These results will now be used to identify further drill targets -- Objective to continue to update the Red Star Resource in preparation for construction and production which is expected in 2021-- A map showing the relevant Red Star vein system can be found on the website version of this press release at www.phoenixcopperlimited.com/news.Ryan McDermott, Chief Executive Officer, commented:"We are pleased with the latest Red Star results which indicate an open-ended extension to the Red Star vein of 320-metres. Additionally, during the Q4 2019 drill road-building work, two additional veins were identified. These new veins are particularly exciting as they may be indicative of a much larger, multi-vein shear zone."During 2020 the Company plans to complete a drilling programme on Red Star to generate a Measured and Indicated resource sufficient to justify a small underground "adit" mine with a flotation process plant to produce lead-silver, copper-gold and zinc concentrates. The scale of operations will be in the region of 450 tonnes of ore a day or 155,000 tonnes a year."The Red Star discovery is a primary high-grade silver/lead sulphide vein and has, after drilling only three holes, generated a maiden NI 43-101 compliant resource of 103,500 tonnes, containing half a million ounces of silver or a silver equivalent resource of 1.6 million ounces when gold, lead, copper and zinc values are included. The value of the contained metal in the NI 43-101 Red Star resource is US$260/tonne of ore at today's metal prices, or US$40.3 million a year at a production rate of 155,000 tonnes of ore a year. Capital costs are anticipated to be in the region of US$30 million."Whilst our focus will be production from Red Star, anticipated in 2021, the Company will also be evaluating alternatives for the Empire Mine's open pit copper project in an attempt to improve on the revenue, operating and capital cost estimates. The completion of the feasibility study for this project will be accelerated in a more attractive copper price environment."My predecessor, Dennis Thomas, has pointed out many times that the polymetallic nature of the Empire System is largely untapped and barely exploited or explored. These latest results are certainly consistent with this view. I would like to take this opportunity to personally thank Dennis for his service to the Company as the former CEO and thank him in advance for his future contribution as VP Investor Relations."Red Star ZoneThe Red Star Zone is located approximately 330 metres north-northwest of the Empire open-pit resource area within the Empire patented claim boundary. This boundary is contiguous with the Company's unpatented Horseshoe Block to the north and west.The Red Star vein was discovered as a single vein outcrop (discovery outcrop) in 2018 during a field mapping and reconnaissance of the northern patented claim boundary and adjacent Horseshoe Block. Geological and structural mapping in the vicinity of the discovery outcrop indicated a N30E to N40E strike dipping 80 degrees north west. The lack of any surface outcropping, besides the discovery outcrop, made it necessary to excavate road cuts through the 2.0 metre to 5.0 metre thick overburden in order to expose the uppermost sub-crop of the underlying rocks.Following the 2018 discovery, the lone discovery outcrop was sampled by cutting one continuous channel comprised of 12 times 1.5 metre long samples. The assay results were reported on 30 October 2018. Silver values in the individual channels ranged from 3.0 g/t ("grammes per tonne") to 78.5 g/t, lead ranged from 0.010% to 0.354% and zinc from 0.038% to 0.278%. Gold values were anomalous, and manganese values were high at 0.379% to 0.837% compared to the surrounding unmineralized rock (Table 1).Apart from the discovery outcrop, no other significant outcrops exist in the Red Star area. In October and November 2019 approximately 2,000 metres of drill access roads were constructed throughout the Red Star Zone with the intent of crossing the vein system and exposing sub-crops beneath the 2.0 metre to 5.0 metre thick overburden along the anticipated strike of the vein. Visibly mineralized sub-crops were exposed in seven road cuts. The geology and geochemistry of the sub-crop intercepts were consistent with the 2018 discovery outcrop channel with silver values ranging from 0.5 g/t to 18.5 g/t, lead ranging from 0.001% to 0.705%, and zinc from 0.011% to 1.361%. Gold was anomalous, and manganese 0.031% to 0.769%. (Table 2). The wider variation in the recent channel sampling results is likely to be due to the highly weathered and broken sub-crop that was exposed in the road cuts.The samples were analysed using 33-element ICP. Silver values above 1 ppm ("parts per million"), and manganese values above 1,000 ppm were significant in the discovery outcrop channel sampling in 2018, as they were indicative of high grade silver and lead below, as proven by subsequent drilling. The 2019 channel samples are indicative of the same and demonstrate the potential for further high grade silver and lead. Table 1 - 2018 Discovery Outcrop Channel Samples --------------------------------------------------------- ID Au g/t Ag g/t Cu % Mn % Pb % Zn % ------------ ----------- ------- --------- 22701 0.03 17.3 1.39 0.583 0.019 0.101 ------------ ----------- ------- --------- ------ ------ 22702 0.03 9.4 0.7 0.578 0.051 0.084 ------------ ----------- ------- --------- ------ ------ 22703 0.02 14.3 1.24 0.512 0.126 0.194 ------------ ----------- ------- --------- ------ ------ 22705 0.07 15.9 0.3 0.687 0.208 0.219 ------------ ----------- ------- --------- ------ ------ 22706 3.64 78.5 0.91 0.503 0.354 0.278 ------------ ----------- ------- --------- ------ ------ 22707 0.13 23.7 0.37 0.837 0.199 0.076 ------------ ----------- ------- --------- ------ ------ 22708 0.04 5.7 0.15 0.753 0.042 0.038 ------------ ----------- ------- --------- ------ ------ 22709 0.24 8.1 0.21 0.494 0.048 0.058 ------------ ----------- ------- --------- ------ ------ 22710 0.03 5.1 0.18 0.489 0.012 0.088 ------------ ----------- ------- --------- ------ ------ 22711 0.02 11 0.69 0.486 0.010 0.077 ------------ ----------- ------- --------- ------ ------ 22712 0.02 3 0.3 0.379 0.012 0.125 ------------ ----------- ------- --------- ------ ------ 22713 0.05 4.7 0.43 0.427 0.057 0.125 ------------ ----------- ------- --------- ------ ------ Table 2 - 2019 Road Cut and Trench Samples ---------------------------------------------------- ID Au g/t Ag g/t Cu % Mn % Pb % Zn % --------- --------- ------- ------- RS19-09

[the_debt_collector] 15/1/2020 11:04

Pantsonfire

In respect of Loan Notes, I do not subscribe to your commentary that they cannot be issued for exploration - see CONroy Gold has recently issued such notes and they are no-where near production.

In respect of your other commentary I say there is too much uncertainty surrounding this company, in particular, the dilution aspect, they have issued shares like confetti so far and what is stopping them now is the woeful share price.

Basically the market (AIM investors generally) have seen through this company and until something material is delivered (apart from more dilution) then the share price will remain in the gutter possibly go lower.

Not forgetting project risk - getting a new mine into production is full of challenges.

Basically they need a deep pocketed JV partner to do the paying, deliver on that one I say.

[zaphod99] 14/1/2020 07:36

Whilst we await further updates.....With Copper Stocks Tapped Out, Banks See a 2020 Price SpikehTTps://www.bloomberg.com/amp/news/articles/2020-01-12/with-copper-stockpiles-tapped-out-banks-see-a-2020-price-spike

[pantsonfire] 02/1/2020 18:06

Happy New Year to all. And to TDC, you are correct, except for one conclusion, which I think you missed. Like many, indeed most people, we make our conclusions like a driver looking in the rear view mirror. And your conclusion was based on the share price, and how it has moved. I cannot question that based on today's price. But I think that the BoD have a plan, and if we look forward I think we may be seeing a slightly different and more positive future. Zaphod said that Phoenix have been "able to weather this negative period by raising funds via loan notes with warrants attached, rather than via equity which at the current sp, would be quite dilutive". Please correct me if I am wrong, but LN’s cannot generally be issued against exploration, and normally can only be issued if production is in sight. If what Zaphod says is correct, as Zaphod suggested, maybe Red Star is already mapped out and will enter production sooner rather than later. Looking globally at this company, and analysing remaining risk, our money has gone into a large exploration programme, so now we have a geological resource which is known; the location is safe politically, and indeed they are encouraging local investment; management know their mining, so as I see it, our only remaining significant risk is the possibility of more dilution when raising finance. And as I have said above, if they can raise funds through loan notes, then looking forward (and not backwards) we should see this soar. Can you question this logic TDC? Yes you are correct when looking backwards, and explaining where we are today. And that works well for established companies with a track record. But for a new opportunity, like this one, it might just not be the correct approach? I don't have the answer, but I am confident still my investment will give me a return, so I'm staying put.

[deuchar] 02/1/2020 17:02

TDC well spoken currently a pathetic loser