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Phoenix Gold rises on copper-zinc plans

Shares in junior Phoenix Gold Resources shot up 48% yesterday as the company announced plans to acquire an historically-mined copper-zinc project in Newfoundland.
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York Harbour in Newfoundland

Staff reporter

"York Harbour gives Phoenix direct exposure to the copper market, as well as being positioned with gold, silver, zinc and now possibly cobalt," CEO Andrew Lee said.

Phoenix said it had signed an option agreement with WBN Prospecting Group to acquire the York Harbour property, for C$95,000 in cash, almost 1.5 million in shares and spending $3 million on exploration within three years.

WBN would retain a 2% net smelter returns royalty and Phoenix could purchase 1% for $1 million within a year of starting commercial production.

York Harbour was said to have produced about 90,000 tonnes of ore grading 3-12% copper and 7% zinc between 1898-1913.

Exploration by various companies since has generated several historical resources and "noteworthy cobalt concentrations of 0.05-0.15%" in sampling by Messina Minerals in 2009.

The above sample was reported from the outcropping A Zone lens, which was "rediscovered" after being covered by debris for 100 years.

Phoenix said it would work towards designing and planning an exploration programme for 2021.

Phoenix Gold's namesake gold project is in Nevada.

Its 2019 plans to acquire Fox Automotive Switzerland were terminated in April 2020 as the proposed transaction was not completed in the time allowed under the letter of intent.

Phoenix had negative working capital of $243,438 at October 31, then raised $1.4 million at 20c per unit in December.

Its shares (TSXV: PXA), which were trading about 4c 12 months ago, reached a one-year high of 47c intraday.

They closed up 48.1% to 40c to capitalise it at $13.7 million (US$10.8 million).