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Phoenix Copper Ltd (LSE/: PXC.L) GBp 48.40 – (OTCQX: ADR: PXCLY) $6.75 FRA:5HR €0.55
Base Metal Shines – PXC Empire Mine is A $1 Billion Project – Production Start – First Half Of 2023 

The Motley Fool Advisors Recommends Buying Phoenix Cooper Ltd For Long-Term Investors

The Motley Fool Advisors has provided investing insights and financial advice to millions of people for over 25 years and recommends Phoenix Cooper (LSX:PCX) to buy today. Copper consumption is likely to balloon as global construction rates ramp up. In particular, demand for the red metal is tipped to soar as urbanization rates in emerging regions accelerate. This is why the Motley Fool Advisors are thinking of investing in Phoenix Copper (LSE: PXC) right now. This penny stock (which trades at 48p) is developing the Empire mine in Idaho with a view to producing the first material in H1 next year. The asset contains some 129,641 tonnes of copper.

Industry: Mining – Base/Precious Metals Explorer and Developer in Idaho

Phoenix Copper Ltd (LSE/: PXC.L) GBp 50.40 – (OTCQX: ADR: PXCLY) $7.45 FRA:5HR €0.58
Base Metal Shines – PXC Empire Mine is A $1 Billion Project – Production Start – First Half Of 2023  

Phoenix Copper Ltd is a base and precious metals E&D Company located in Idaho, USA. The core asset is the Empire Open Pit Mine; the start of production is targeted for mid 2023. The life of mine is ten years. At current metal prices, the post-tax NPV for PXC 80% share discounted at 7.5% is $146.7mil. and gross revenue of $884.5mil.  Less than 1% of the potential ore system has been explored to date, and the potential sulfide resource under open pit mine and along strike could be a game-changer for Phoenix. In addition, the Red Star high-grade silver-lead project could become a potential producing silver mine; and just a few days ago, geophysical surveys on the Navarre property indicates significant resource potential. PXC offers investors the opportunity to be part of a potentially world-class base and precious metals project in Idaho, one of the most attractive mining jurisdictions in the world. Our unrisked fair value at £1.44 per share, assumes PXC successfully executes their work programs

INVESTMENT HIGHLIGHTS

♦️ The Empire Copper-Oxide Open Pit Deposit is the main focus of Phoenix Copper to bring the near surface copper oxide resource in late 2022 or early 2023 into production and generate cash flows. The production plan incorporates 14.32m tones of oxide ore, equivalent to 62.5% of the M&I (Measured & Indicated) resources at 2.1 million tons per annum at a 0.5% copper cut-off grade, over the initial seven years. Based on the Company’s Economic Model (EM) announced in February 2021, PXC estimated strong cash flow and rapid payback of the pre-production capital in less than two years and forecasted an average annual production of 8,550 tons of copper and 1,970 tons of zinc in the first phase of production and 17,235 ounces of gold and 680,050 ounces of silver in the second recovery phase respectively. The life-of-mine is at least ten years, and at current metal prices, the post-tax NPV discounted at 7.5% is $146.7 million, and gross revenue of $884.5 million.

♦️ Plan of Operation – further to the submission of the Plan of Operations in June 2021, the permitting process for the Empire Copper-Oxide Open Pit is ongoing as planned, with the hydrological drilling program nearly completed. The related feasibility study is also ongoing in accordance with the anticipated timetable, with final engineering and process designs on schedule. The Company has also begun to purchase staff housing and warehouse facilities in and near Mackay as part of executing the plans for long-term metals production from the properties. Discussions are underway with potential debt financiers to construct the project, and production is targeted for the first half of 2023.

♦️ Significant long-term potential exists to develop a word-class copper-precious metals mine at Empire by exploiting sulfide or body beneath the oxide layer and adjacent claims. If further exploratory drilling reveals a significant sulfide copper resource beneath the Empire open pit, then this could have substantial valuation implications. Exploration efforts at Red Star, and the Navarre Creek gold project are ongoing, and Navarre could become a Carlin-style gold deposit. Cash flow generated from the Empire Mine Project will facilitate further development at these prospects. The boom in Idaho for cobalt mining his heating up, PXC is excellent positioned with two highly-prospective copper-cobalt properties to benefit from the skyrocketing demand for minerals needed to build electric vehicles, Smartphone’s Tablet’s etc.

Phoenix Copper is well-financed and led by a highly experienced management team. The flagship of the PXC, the Empire Project is expected to come into production by mid 2023. The potential for significant copper sulfide finds below the open pit exists; this could be a game-changer for Phoenix and the first step in developing a world-class copper and other base metals project. PXC has an ESG Committee in place to enhance its social and environmental strategy as a responsible corporate citizen. For listed mining companies – of any size – an important starting point is to understand the current and target investors’ ESG topics they care about. Our fair value of £1.44 is based on post-tax NPV estimate of $146.7m for the Empire Mine and the upside potential for Red Star, the Navarre and the emerging Cobalt and other projects. We are initiating coverage on Phoenix Copper with a SPECULATIVE BUY RATING and a 12-months target price of £1.44, $17.90 for ADR shares and €1.72

This memorandum is for informative purposes only. SISM Investors is an investment research firm without any investment banking activities and is publishing research reports concerning the securities of its clients. The information contained in these reports is based on sources that we consider reliable but is not guaranteed by us, nor do our reports represent a solicitation to buy or sell the securities discussed therein. While the information contained has been obtained from sources believed to be reliable, we do not represent that it is accurate or complete, and it should not be relied upon as such. Risks to our valuation include fluctuation in general economic and metal price conditions, the ongoing effects of the COVID-19 pandemic continue to be unpredictable with an adverse impact on the business, results of operations, and financial condition. SISM Investors, Erlenweg 15, 8302 Kloten Switzerland. All rights reserved 

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