Conditional Subscription for $80m of Copper Bonds

Phoenix Copper Ltd (AIM: PXC, OTCQX ADR: PXCLY), the AIM quoted USA focused base and precious metals emerging producer and exploration company, is pleased to report that its corporate copper bond issue (the "Bonds") has been fully subscribed for a principal value of US$80 million (before Bonds issue expenses).

The Company has entered into a subscription agreement with NIU Invest SE, a European private equity investment company (the "Bonds Investor"), pursuant to which the Bonds Investor has subscribed for US$80 million of Bonds, subject to certain conditions being met. The Bonds will be drawn down in tranches in accordance with a drawdown schedule in order to fully fund the construction of the Company's Empire Open-Pit Mine in Idaho, USA (the "Empire Mine") for the production of copper, gold and silver, and for general working capital.

Subject to the Directors being granted the authority to allot relevant securities at the Company's forthcoming Annual General Meeting ("AGM"), scheduled to be held on 29 May 2024, unless and until agreed otherwise, the Bonds will be drawn down as to US$5,000,000 on or around 31 May 2024 (the "Initial Drawdown"), US$5,000,000 on or around 30 June 2024, US$20,000,000 on or around 31 August 2024, and the balance of US$50,000,000 in two tranches during the first half of 2025.

The Bonds are not convertible. However, subject to the Initial Drawdown being received, the Company has agreed to pay the Bonds Investor an arrangement fee by way of an issue of 33.88 million new ordinary shares of no par value in the Company ("New Ordinary Shares"), and a drawdown fee by way of warrants to subscribe at no cost for a further 22.59 million New Ordinary Shares (the "Warrants"). The Warrants will vest pro-rata over drawdown of the first US$30 million of Bonds, and remain valid for a period of five years from Initial Drawdown. On a fully diluted basis, the Bonds Investor will have the right to accumulate up to a 25% strategic investment in the Company over a five-year period, based on the current issued share capital of the Company.

Further information on NIU Invest SE can be found on https://niu-invest.com. NIU Invest SE is wholly owned by Mr Cevdet Caner, an Austrian entrepreneur.

Bond Terms

As disclosed in the Company's interim accounts dated 28 September 2023, the Company approved the creation of a class of Floating Rate Secured Minimum 8.5% Bonds due 2029 to 2033 in an authorised amount of US$300 million, in anticipation of closing the initial tranche required to construct the Empire Mine. The Bonds will pay a floating rate coupon subject to a minimum of 8.5% per annum and a maximum of 20% per annum. The coupon is calculated as to the higher of a copper price coupon linked to the copper price on the London Metal Exchange, or an interest rate coupon linked to the US Federal Discount Rate. The coupon is payable semi-annually on 30 June and 31 December and will be payable on the principal value of Bonds drawn down. The coupons payable on 31 December 2024 and 30 June 2025 will be escrowed at 8.5% with the Escrow Agent, pending payment.

The Bonds are not convertible, are secured over the Company's interests in the Empire Mine, and have a final maturity date of 10 years with the Bonds Investor's option to request redemption at principal value after six years and the Company's option to offer redemption at a 10% premium to principal value after five years. M&G Trustee Company Limited is acting as Security Trustee and Escrow Agent, and The Bank of New York Mellon as Custodian and Transfer, Paying and Settlement Agent. The Bonds have already been issued and are currently held by the Settlement Agent on behalf of the Company, pending onward transfer to the Bonds Investor. It is the Company's intention for the Bonds to be listed on a recognised European stock exchange and further information regarding this will be announced in due course.

Environmental, Social, and Corporate Governance ("ESG")

Phoenix is committed to meeting and exceeding the environmental standards required by law as a core value of the Company. The baseline environmental data collected to date will be used to further the permitting process, but as importantly, will be used as the building blocks for the Company's ongoing ESG platform, overseen by the Company's ESG & Sustainability Committee. The Company also publishes annual Sustainability Reports, which can be viewed on the Company's website.

Since 2017, Phoenix has executed extensive drilling initiatives, resulting in an expansion of the Empire Open-Pit resource by over 200%. In May 2024 the Company published its inaugural mineral reserve statement for the Empire Open-Pit mine. Proven & Probable mineral reserves are 10.1 million tonnes containing 109,487,970 lbs of copper, 104,000 ounces of gold and 4,654,400 ounces of silver. This reserve was estimated using assay data from 485 drill holes, extensive geological modelling, metallurgical recovery test work, geotechnical evaluation, and mine design.

In addition to the Empire Mine, Phoenix's holdings in the district also encompass the Horseshoe, White Knob, and Blue Bird Mines, all of which have been producers of copper, gold, silver, zinc, lead, and tungsten from underground operations, a new high-grade silver and lead orebody at Red Star, and the Navarre Creek gold exploration project, which was first drilled in 2023. The Company's land package at Empire spans 8,434 acres (34.13 sq km).