LONDON - Phoenix Copper Limited (AIM: PXC; OTCQX ADR: PXCLY) and ExGen Resources Inc (TSX.V: EXG) have updated their carried interest agreement concerning the Empire Open-Pit Project in Custer County, Idaho. The revision, announced today, modifies the terms of their 2015 Agreement and aims to streamline the funding for the project's construction.
Under the new 2024 Amendment, Phoenix will no longer be required to make an annual payment to ExGen or meet a minimum annual spend on the Project. Additionally, the requirement for Phoenix to provide ExGen with a bankable feasibility study before ExGen funds 20% of the Project's construction costs has been removed.
Instead, Phoenix plans to fund ExGen's share of the construction costs through a shareholder loan to Konnex Resources Inc., the Idaho registered company that owns the project and is 80% owned by Phoenix through its subsidiary, KPX Holdings Inc. This loan, along with accrued interest, is expected to be repaid from ExGen's future cash flows from the project. Details of the loan will be disclosed once terms are agreed upon and funding by Phoenix is finalized.
Ryan McDermott, CEO of Phoenix, expressed satisfaction with the new agreement, which he believes simplifies the partnership and facilitates the funding process for the Empire Open-Pit's construction through a single shareholder loan.
The Empire Open-Pit Project, primarily a copper, gold, and silver venture, is part of Phoenix's broader portfolio in the historic Alder Creek mining district. The project has seen considerable development, with proven and probable mineral reserves reported in May 2024.
Phoenix will retain the Honolulu royalty and mining claims and the Mackay royalty, acquired on October 27, 2021. Future royalties or mining claims acquired by Phoenix or KPXH will be offered for transfer to Konnex as per the terms of the original 2015 Agreement and the 2024 Amendment.
The amendment is considered a related party transaction under AIM Rule 13 due to overlapping directorships between Phoenix, Konnex, and ExGen. However, Catherine Evans, a Non-Executive Director of Phoenix, has, in consultation with the company's nominated adviser, deemed the new terms fair and reasonable for shareholders.
Phoenix emphasizes its commitment to environmental standards and ESG principles, ensuring that the project not only meets legal requirements but also serves as a foundation for the company's ESG platform.
This update is based on a press release statement from Phoenix Copper Limited.
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