LONDON, UK: Phoenix Copper Ltd has entered into agreements with Honolulu Copper Corporation and Mackay LLC to acquire part of the 2.5% royalty payable to each of them, and the Honolulu mining claims, pursuant to the Mining Leases on the Empire Mine in Idaho, USA.
Pursuant to the terms of the Agreements, Phoenix has acquired 1.25% of the royalty payable to Honolulu, including Honolulu’s underlying patented and unpatented mining claims, and 1% of the royalty payable to Mackay, for a total consideration of $1.3 million payable in cash, $550,000 of which has been paid, and $750,000 of which is payable in three instalments of $250,000 each, due on 31 December 2021, 2022, and 2023.
Following the acquisition of the royalty, Konnex Resources Inc, the Company’s 80% owned Idaho registered subsidiary and operator of the Empire Mine, will pay a 1.25% royalty to Honolulu plus a 1.25% royalty to Phoenix, or a 1.5% royalty to Mackay plus a 1% royalty to Phoenix, based on the order in which the respective claim blocks are mined.
The underlying patented and unpatented mining claims acquired from Honolulu will be owned by Phoenix’s 100% owned Idaho registered subsidiary, Lost River Resources Inc.
As a result, the Mining Lease with Honolulu has been terminated and will be replaced by a new mining agreement between Konnex and Lost River with substantially the same terms as the prior Mining Lease with Honolulu. Konnex’s existing rights and obligations with regard to the Empire Mine will therefore remain unchanged. The terms of the Mining Lease with Mackay will also remain unchanged.
Richard Wilkins, CFO of Phoenix Copper, commented: “Our preliminary economic model for the Empire open pit mine, which is based on a $3.60 copper price, forecasts gross revenue of $836 million over an initial 10-year project life. The royalty now payable to Phoenix should therefore represent significant additional revenue to Phoenix over the same period and is intended to contribute additional funds to the corporate dividend policy which we plan to adopt for the benefit of our shareholders.
“As some of the mining claims cover portions of the potential Red Star silver – lead deposit, Phoenix will also benefit from the royalty otherwise payable to Honolulu or Mackay on Red Star, as well as on the deeper underground sulphide copper deposit, as and when those projects start to generate revenue. The patented mining claims now owned by Phoenix’s 100% owned Idaho registered subsidiary, Lost River, are considered fee simple (private land) and the ownership includes both surface and mineral rights.”
Leave a Reply