Audited results for the year end 31 December 2018

RNS Number : 7270A

Phoenix Global Mining Ltd

31 May 2019

 

Phoenix Global Mining Ltd

("Phoenix" or the "Company")

Final audited results for the year ended 31 December 2018

Notice of AGM

31 May 2019

Phoenix Global Mining Ltd (AIM: PGM; OTCQX: PGMLF), the North American focused base and precious metals exploration and development company, is pleased to announce its audited results for the year ended 31 December 2018.

Highlights

-      Admitted to trading on New York OTCQX Market in October 2018

-      Completed an additional 8,600 metre, 93 hole drilling programme to update open pit resource

o  46% increase in Measured & Indicated ("M&I") resource to 15.2 million tonnes

o  37% increase in M&I contained copper to 73,872 tonnes

o  108% increase in M&I contained zinc to 29,813 tonnes

o  76% increase in M&I contained gold to 139,000 ounces

o  70% increase in M&I contained silver to 6.038 million ounces

o  60% increase in value of open pit M&I contained metal to $849 million

-      Bankable Feasibility Study on Empire Mine open pit heap leach SX-EW project underway

-      Empire Mine land acreage increased to 5,717 acres

-      Maiden Inferred sulphide resource at newly discovered Red Star lead / silver zone

-      45% increase in Net Assets to $9.15 million (2017: $6.30 million)

-      Additional $1.24 million raised in February 2019 and $900,000 in late May 2019

The Company also announces that the Annual General Meeting ("AGM") will be held at the Washington Mayfair Hotel, 5 Curzon Street, London W1J 5HE on 26 June 2019 at 11.00am.

The Notice of AGM and Forms of Proxy will be despatched to shareholders on 3 June 2019 and will be available on the Company's website at www.pgmining.com.

The Company's Annual Report and Consolidated Financial Statements for the year ended 31 December 2018 will also be available on the website from 3 June 2019.

Market Abuse Regulation (MAR) Disclosure

Certain information contained in this announcement would have been deemed inside information for the purposes of Article 7 of Regulation (EU) No 596/2014 until the release of this announcement.

Contacts

For further information please visit www.pgmining.com or contact:

Phoenix Global Mining Ltd	Dennis Thomas / Richard Wilkins	Tel: [phone] (Dennis) /  [phone] (Richard)
SP Angel (Nominated Adviser and Joint Broker)	Lindsay Mair / Caroline Rowe	Tel: [phone]
Brandon Hill Capital (Joint Broker)	Jonathan Evans / Oliver Stansfield	Tel: [phone]
Blytheweigh (Financial PR)	Tim Blythe / Camilla Horsfall / Megan Ray	Tel: [phone]

Notes

Phoenix Global Mining Ltd (AIM: PGM, OTCQX: PGMLF) is a North American focused, base and precious metal explorer and developer, which is fast-tracking the historically-producing Empire Mine in Idaho, USA, back into production, and exploring for cobalt in Idaho.

Phoenix's flagship project is a brownfield, past producing, copper, gold, silver, zinc and tungsten underground mine, the Empire Mine near Mackay in Idaho. Phoenix acquired an 80% interest in the property in 2015. Based on a total of 320 drill holes an oxide resource was completed in late 2017. A NI 43-101 compliant PEA (preliminary economic assessment) for an open pit heap leach solvent extraction and electrowinning ("SX-EW") mine was completed in April 2018. In June 2018 a drilling campaign consisting of 8,600 metres in 93 holes was started and completed in late 2018. This programme was designed to upgrade and increase the oxide resources, provide samples for ongoing metallurgical testwork, geotechnical and hydrological studies and condemnation drilling for the heap leach pad site, waste dump and plant site. An updated NI 43-101 compliant resource was completed in early May 2019 which resulted in an increase from the PEA resources of 37% contained copper and 108% contained zinc. This resource will now be used as the basis for the Bankable Feasibility Study ("BFS") scheduled for completion in mid 2020.

At Empire, it is estimated that only 1 to 2% of the potential ore system has been explored to date and, accordingly, there is significant opportunity to increase the resource through phased exploration; the current resources relate to the oxide resource only, with the exception of the Red Star discovery "Inferred" resource, which remains open along strike and does not include the deeper, higher grade sulphides. In addition, Phoenix has increased the claim area from 818 acres at the time of its acquisition to 5,717 acres, mainly to the northwest and west, and in so doing has increased the potential for additional oxide and sulphide resources by a total strike length of approximately 2,500 metres towards another brownfield mine, the Horseshoe Mine, which is now within the property boundary.   

The Company also holds two prospective cobalt properties in Idaho, US, which are located north of the Empire Mine.  These are situated close to the town of Cobalt and are close to projects being advanced by Canadian junior miners, including eCobalt Solutions and First Cobalt.  Fieldwork, consisting of mapping and sampling and locating drill holes for the 2019 drilling programme, has been completed.

With a management team that has successfully constructed, commissioned and operated mines and low risk, mining-friendly jurisdictions with excellent infrastructure, Phoenix is looking to fulfil its ambitions to become a mid-tier base metal, precious metal and cobalt production company, offering exposure to high value and high demand metals with compelling demand/supply fundamentals.

More details on the Company, its assets and its objectives can be found on PGM's website at www.pgmining.com

CHAIRMAN'S STATEMENT

Dear Shareholders

I am happy to be reporting to you on what has been a year of exciting progress for Phoenix - our second as a public company. Expenditure of approximately $3 million has resulted in an increase in value of Measured and Indicated ("M&I") contained metal within our proposed open pit of $317 million at current prices, as well as a significant increase in our land acreage, and the discovery of a new high grade lead/silver extension to the existing orebody.

It is a great credit to the technical team and our supportive shareholders that we are still on track for copper and zinc production at the Empire mine in 2021, despite what has been a difficult year for commodity prices and junior miners.

During the 2018 drilling campaign we completed a further 93 holes to add to the 320 already drilled and have boosted our M&I resource from 10.42 million tonnes to 15.17 million tonnes - an increase of 46%. At recent prices, the value of contained metal in the M&I resource has risen 60% from $532 million to $849 million.

Within the M&I resource we have over 10 million tonnes of ore grading at 0.61% copper. This will spearhead our advance to production in 2021. This grade is 30% higher than the 2017 global average for copper oxide open pit mines of 0.47% (source AME global mine database), and higher than the global average, including sulphide deposits, of 0.58%. This grade, combined with the comparatively low costs and ease of operating in Idaho, ensures that our project will generate returns well above standard industry hurdle rates at current metal prices.

The 2018 drilling campaign is a major breakthrough for our company, in that the updated resource shows that the planned Empire open-pit mine, combined with the lower-cost SX-EW processing plant, is now economic at current metal prices and will generate early cashflow to enable us to explore the higher-grade sulphide deposits underneath the open-pit mine, process the gold and silver, and pay dividends in the future.

The Empire project is already attracting interest from mining finance and trading houses, and we hope to be able to fund capital expenditure predominantly with debt and other forms of project and metal offtake finance, involving minimal issues of ordinary shares.

Our medium-term prospects have been significantly boosted by several undertakings during the year. We conducted a successful surface sampling programme at our two Idaho Cobalt Belt properties, Redcastle and Bighorn, finding grades of up to 0.31% cobalt and 4.12% copper. Following our significant discovery at Red Star, north of the Empire open-pit project, where we have just published a maiden Inferred resource with high grade values of silver and lead, as well as copper, gold and zinc, we expanded our territory from 818 acres, pre-April 2018, to 5,717 acres. This new territory includes the previously-producing Horseshoe Mine, directly to the north of the planned open-pit mine, the Windy Devil area further to the north, where there are several old workings, and the Navarre Creek claims, which exhibit the rich, Carlin-style gold mineralisation found in neighbouring Nevada.

I draw shareholders' attention to a report on Empire dated 5 April 2019 prepared by our consulting geologist, Nigel Maund. The report is available on our website pgmining.com/research. In the report Nigel states that we are sitting on a major, district-style opportunity. Nigel was the first geologist to recognise the extent of the Olympic Dam system in Australia. His analysis of the drill core and structures suggests the existence of a cluster of porphyry molybdenum and tungsten deposits over some five kilometres of strike length, and he concludes that we currently understand less than 2% of the ore system. Along with cobalt, tungsten is on the list of thirty-five minerals deemed critical to the economic and national security of the United States. Tungsten and molybdenum currently sell for $25,000 to $30,000 a tonne.

Now that Phoenix is tradeable on the OTCQX exchange in New York, we look forward to welcoming an increasing number of North American investors onto our register.

During the year Governor C.L "Butch" Otter, concluded his term and handed over to his Deputy, Brad Little. Governor Otter has since joined the board of our neighbours on the Idaho Cobalt Belt, and continues his strong support for the mining industry in Idaho. We look forward to working with Governor Little, who has also offered his support in this very mining-friendly State.

Although copper prices seem range-bound until the trade talks with China are resolved we are confident that the developing shortage of new production coming on stream will support the price of copper, particularly with the growth in renewable energy and the expansion of the electric vehicle fleet as key drivers on the demand side.

I look forward to updating you on what should be an exciting and transformative year ahead for our company, and thank you for your continued support.

Marcus Edwards-Jones

Executive Chairman

30 May 2019

STRATEGIC REPORT

The directors present their report and the audited financial statements of Phoenix Global Mining Limited ("Phoenix" or "the Company") for the year ended 31 December 2018. The directors herewith provide a review of the Company's progress over the last year and also provide the required Strategic Report that outlines how the Company intends to deliver shareholder value going forward.

Principal activities and review of the business

Despite recent fluctuations in metal prices, copper and cobalt in particular, I believe we can look forward to the rest of 2019 and beyond with great confidence and optimism.  Market expectations are that both copper and cobalt prices will recover on the back of underlying strong fundamentals, which do not appear to have changed. It is also reassuring to note that the Company is operating in a geopolitically stable jurisdiction and that we have both early production potential and significant exploration upside, across a diverse and strategic suite of in-demand metals, including copper, cobalt, zinc, gold and silver.

Empire Mine - Open Pit Heap Leach SX-EW Copper Project in Idaho, USA

Following our 2017 drilling programme, in November 2017 we announced a new NI 43-101 compliant open pit copper oxide "Measured and Indicated" resource of 10.42 million tonnes at 0.52% copper. This resource was based on a 0.184% copper cut-off and underpinned a work programme leading to the completion of a Preliminary Economic Assessment ("PEA") on the Empire Mine open pit heap leach solvent extraction and electro-winning ("SX-EW") copper project in April 2018.  

In June 2018 five drill rigs embarked on a drilling programme of 8,604 metres in 93 holes.  Our goals  were to increase "Measured and Indicated" resources by way of infill drilling in order to upgrade  "Inferred" resources to the "Measured and Indicated" categories, to increase overall resources by drilling outside the envelope enclosing the 2017 resources, and to enhance our metallurgical testing programme with the collection of additional large diameter core to augment ongoing feasibility studies.  We accomplished both these objectives, and in May 2019 we announced an updated resource model at the same 0.184% copper cut-off grade, as used in the April 2018 PEA, resulting in a "Measured and Indicated" resource of 15.17 million tonnes at 0.49% copper, a 45.6% increase in overall "Measured and Indicated" tonnage, containing 73,872 tonnes of copper, 29,813 tonnes of zinc, 139,000 ounces of gold, and 6,038,000 ounces of silver. This represents a 37.4% increase in contained copper, over 100% increase in contained zinc, 75.9% increase in contained gold and 69.6% increase in contained silver, giving a combined metal value at current prices of approximately $850 million.  We also reported an additional 4.3 million tonnes of "Inferred" resources.

Going forward, we will now proceed as fast as possible to complete our Bankable Feasibility Study ("BFS") on the open pit oxide project.  This study will be based only on the "Measured and Indicated" resources. At a 0.325% copper cut-off grade there are over 10 million tonnes in the "Measured and Indicated" category with an average grade of 0.61% copper and 0.22% zinc, plus five million tonnes of low grade stockpile for subsequent processing. This is the current strategy for the development of a low capital cost fast-track open pit mine, producing 8,000 tonnes of copper and zinc annually. We will also evaluate the potential for early cash flow from the gold and the silver.

Empire Mine - Property Claims

At the time of the Company's IPO in mid-2017, the Empire Mine property consisted of 818 acres. In 2018 the property area was increased to 1,837 acres through the acquisition of an additional 54 claims containing the northern extension of the Empire Mine skarn orebody through to the old Horseshoe lead/zinc/copper mine, and a further four claims in the Granite block to the south of the Empire open pit.

In February 2019 we staked another 194 claims which increased the property to 5,717 acres (23.14 square kilometres). The extension includes more than 30 historical prospects, shafts and adits north of the Horseshoe block into the Windy Devil area, resulting in an overall length of identified contiguous skarn mineralisation of some 5.38 kilometres. It also includes the Navarre Creek area some four miles west of the Empire Mine, a 2,420-acre zone geologically similar to the Carlin Trend gold belt in Nevada and suggesting excellent potential for near surface precious metal discoveries.

Empire Mine - Sulphide Potential

In early 2018 I was pleased to report the results from two deep diamond drill holes drilled in late 2017, which confirmed the presence of higher-grade sulphide mineralisation in the skarn structures at depth. Both of the core holes intersected mineralised skarn over much of their length and the analytical data from both drill holes intersected numerous significant intervals of copper, gold, silver, zinc, lead, and tungsten throughout their depths. The tungsten values were particularly interesting as they positively reinforced the Company's consulting geologist's predictions of the Empire system hosting significant values of tungsten at depth. In 2018 five drill holes intercepted copper sulphide mineralisation. One hole returned 5.53% copper, 7.67 g/t gold, and 120 g/t silver, and was further north of any historical underground mining, whilst another returned 5.19% copper adjacent to historical underground workings. The gold and silver grades generally are major considerations, ranging to 7.93 g/t gold and 256 g/t silver.

However, a new zone of surface mineralisation in the Empire block, now named Red Star, was discovered, located 330 metres north-northwest of the Empire oxide pit.  Red Star was identified from a 20 metres wide surface outcrop across the skarn structure and the surface mineralisation is a mix of spectacularly covered oxides and sulphides, with strong chrysocolla and bornite showings, exposed in a heavily timbered canyon. Three reverse circulation ("RC") drill holes were drilled on the target and assay results reported the presence of high-grade lead and silver sulphides including intercepts of 20% lead and 1,111 g/t silver.  In early May 2019, the Company announced a small maiden "Inferred" sulphide resource of 103,500 tonnes, containing 577,000 ounces of silver, 3,988 tonnes of lead, 957 tonnes of zinc, 338 tonnes of copper, and 2,800 ounces of gold.  Red Star represents an exciting exploration prospect for the company.

Empire Mine - Medium/Long Term Exploration Potential

In April 2019 Nigel Maund, our consultant geologist, completed an update of his 2015 overview report of the Empire Mine geological setting and mineralisation.  He visited the property in March 2019 to review the drill core from the Company's 2017 and 2018 drilling campaigns. Amongst his conclusions, he confirmed that the Empire Mine comprises a world class polymetallic ore system containing tungsten and molybdenum as well as copper, gold, silver, zinc and lead and that the mine is sited along a major north south structure with some five kilometres of geologic strike, compared with one kilometre referred to in the April 2018 PEA on the heap leach SX-EW copper project.  Furthermore, he reported that exploration has to date focused on the near surface oxides in the proposed open pit and he was of the opinion that only 1% to 2% of the ore system has been tested to date. 

Borah Resources - Idaho Cobalt Belt

Borah Resources is a 100% Idaho registered subsidiary of the Company. Given the world's growing need for battery metals and cobalt in particular, our Redcastle and Bighorn properties represent a very timely and positive acquisition for the Company, strategically located in the USA's only prospective cobalt region, the Idaho Cobalt Belt, approximately 100 miles north of the Empire Mine.  In 2018 we announced the results of our 2017 reconnaissance programme of 46 surface grab samples which gave cobalt values ranging from 2 ppm to 0.31% cobalt.  In 2018 we continued our exploration programme focusing on detailed structural and stratigraphical mapping, as well as rock chip and channel sampling. Final sampling results are currently awaited but are expected to confirm the presence of cobalt across both properties, and especially the continuity of the rocks at Redcastle from First Cobalt's Iron Creek property. This will enable us to plan the next work programme for 2019.

Gordon Lake Gold - Northwest Territories, Canada

In February 2018, the Company signed an option agreement with ExGen Resources Inc to earn into an 80% interest in the Gordon Lake high grade, shear-hosted gold exploration project located 68 miles northeast of Yellowknife, in the Northwest Territories, Canada. In early 2019, and taking into account the gold exploration potential of the Navarre Creek claim block, a decision was made to let the option lapse in order to focus our resources on Empire. 

Outlook

I am particularly excited with the future prospects for the Company.  Our projects are in an excellent jurisdiction.  Idaho is the fastest growing State in the USA and it has a natural resources based economy.  The outgoing Governor, 'Butch' Otter, has championed the development of new mining investment into Idaho by spearheading roadshows advertising that Idaho is "open for business".  He also set up a new Office of Energy & Mineral Resources within the Governor's office and these initiatives have accelerated permitting within the State, which is now a concurrent Federal and State process and not sequential as in other States.  These initiatives have led to Idaho being placed jointly at the top of the "Mining Journal World Risk Report" in 2018 for least perceived risk. I am pleased to report that the former Lieutenant Governor, Brad Little, took office as Idaho's new Governor in January 2019. Governor Little is continuing to drive forward the positive climate for investment and development started by Governor Otter. 

The Empire Mine is located in a basin that has no direct route to the Pacific Ocean, and therefore no population of migratory salmon and steelhead.  The historic mining activities at Empire were much less impactful than those encountered at most former mine sites, resulting in a brownfield project with no environmental legacy issues.  In 2004, the Idaho Department of Environmental Quality conducted an environmental assessment at Empire as part of their abandoned mine lands programme.  The environmental assessment resulted in a "finding of no significant impacts".  In addition to the absence of legacy environmental conditions, the Empire project area appears to be isolated hydrologically as a result of its unique geology.  The depth to groundwater is estimated at approximately 1,000 feet below surface, and surface water is limited to ephemeral streams.

We have had a third-party environmental engineering firm conducting plant and wildlife, hydrology, and surface impact studies at the Empire Mine for two years now as an integral part of the Plan of Operations development. No fatal environmental flaws have been identified. We are therefore well placed to fast-track our development plans at the Empire Mine and we are focused on metals which have significant potential demand in the very near future. 

We entered 2019 waiting for the last of the Empire Mine 2018 drilling assay results.  The new resources were completed in early May 2019, which now provides the platform on which to complete the BFS with the objective of achieving early copper cathode and zinc production. We have appointed an internationally recognised team of independent consultants to assist us with the BFS, which is scheduled for completion in 2020.

The Red Star discovery has given us a seriously attractive and low cost near surface sulphide exploration target and the expanded claim holdings protect our future from competition, providing the Company with potential base and precious metals resources and perhaps the discovery of a world class skarn deposit.

In conclusion I would state that we have a dedicated team of highly professional staff, consultants and advisers, who will allow us to continue to adapt our work programmes to market conditions as appropriate in order to maximise the medium and long-term benefits for the Company and our various stakeholders.  We also look forward to engaging directly with the North American market, where our projects are located, having successfully admitted our shares for trading on New York's OTCQX Market in October 2018.

Financial Review

The results of the Group are set out in the Directors' Report and the accompanying financial statements. During the year the Company raised a further $4.7 million gross by way of further share issues.

The directors' assessment of going concern is set out in note 2.

Key performance indicators ('KPIs')

To date the Group has been focused on the delivery of the project evaluation work programmes to assess the available mineral resources and the extraction methods to apply, each within the available financial budgets. This work will continue until the BFS is completed on the Empire open pit mine, and construction commences.

At that stage the Group will consider and implement appropriate operational performance measures and related KPIs as the objective of recommencing commercial production at Empire nears fruition.

	Consolidated income statement		Year  Ended 31 December	Year  Ended 31 December
			2018	2017
	Continuing operations	Note	$	$
	Revenue from contracts with customers	4	-	-
	Exploration & evaluation expenditure		(169,863)	(3,824)
	Gross loss		(169,863)	(3,824)
	Administrative expenses		(1,347,980)	(1,053,902)
	Expenses of Placing	5	(136,127)	(302,867)
			(1,484,107)	(1,356,769)
	Loss from operations		(1,653,970)	(1,360,593)
	Finance income		1,709	1,903
	Loss before taxation		(1,652,261)	(1,358,690)
	Tax on loss on ordinary activities		-	-
	Loss for the year		(1,652,261)	(1,358,690)
	Loss attributable to:
	Owners of the parent		(1,635,428)	(1,346,635)
	Non-controlling interests		(16,833)	(12,055)
			(1,652,261)	(1,358,690)

	Loss per share attributable to owners of the parent:
	Basic and diluted EPS expressed in cents per share	6	(5.82)	(8.16)

	Consolidated statement of comprehensive income		Year  Ended 31 December	Year  Ended 31 December
			2018	2017
			$	$
	Loss for the year		(1,652,261)	(1,358,690)
	Items that may be subsequently reclassified to profit or loss:
	Currency translation differences		-	204,227
	Total comprehensive income for the financial year		(1,652,261)	(1,154,463)

Total comprehensive income attributable to:
Owners of the parent						(1,635,428)	(1,142,408)
Non-controlling interests						(16,833)	(12,055)
						(1,652,261)	(1,154,463)
	Consolidated statement of financial position
						31 December	31 December
						2018	2017
		Note				$	$
	Non-current assets
	Mining development asset					-	-
	Property, plant and equipment - mining property	7				9,876,697	5,282,596
	Intangible assets	8				207,160	67,569
						10,083,857	5,350,165
	Current assets
	Trade and other receivables	9				212,516	14,250
	Cash and cash equivalents					112,964	1,903,742
						325,480	1,917,992
	Total assets					10,409,337	7,268,157
	Current liabilities
	Trade and other payables	10				501,301	199,762
	Non-current liabilities
	Provisions for other liabilities	11				757,702	767,444
	Total liabilities					1,295,003	967,206
	Net assets					9,150,334	6,300,951
	Equity
	Ordinary shares	12				-	-
	Share Premium					13,362,353	9,034,541
	Retained loss					(4,338,436)	(2,876,840)
	Foreign exchange translation reserve					(18,588)	(18,588)
	Equity attributable to owners of the parent					9,005,329	6,139,113
	Non-controlling interests					145,005	161,838
	Total equity					9,150,334	6,300,951

Consolidated statement of changes in equity	Ordinary shares	Share premium	Retained loss	Foreign exchange Translation reserve	Total	Non-controlling interest	Total equity
	$	$	$	$	$	$	$
At 1 January 2017	-	2,432,093	(1,634,314)	297,359	1,095,138	-	1,095,138
Loss for the year	-	-	(1,346,635)	-	(1,346,635)	(12,055)	(1,358,690)
Foreign exchange translation differences	-	520,174	-	(315,947)	204,227	-	204,227
Total comprehensive income for the year	-	520,174	(1,346,635)	(315,947)	(1,142,408)	(12,055)	(1,154,463)
Shares issued in the period	-	7,035,364	-	-	7,035,364	-	7,035,364
Share issue expenses	-	(953,090)	-	-	(953,090)	-	(953,090)
Share-based payments	-	-	104,109	-	104,109	-	104,109
Acquisition of non-controlling interest	-	-	-	-	-	173,893	173,893
Total transactions with owners	-	6,082,274	104,109	-	6,186,383	173,893	6,360,276
At 31 December 2017	-	9,034,541	(2,876,840)	(18,588)	6,139,113	161,838	6,300,951

At 1 January 2018	-		9,034,541	(2,876,840)	(18,588)	6,139,113		161,838	6,300,951
Loss for the year	-		-	(1,635,428)	-	(1,635,428)		(16,833)	(1,652,261)
Total comprehensive income for the year	-		-	(1,635,428)	-	(1,635,428)		(16,833)	(1,652,261)
Shares issued in the period	-		4,653,727	-	-	4,653,727		-	4,653,727
Share issue expenses	-		(325,915)	-	-	(325,915)		-	(325,915)
Share-based payments	-		-	173,832	-	173,832		-	173,832
Acquisition of non-controlling interest	-		-	-	-	-		-	-
Total transactions with owners	-	4,327,812		173,832	-	4,501,644	-		4,501,644
At 31 December 2018	-	13,362,353		(4,338,436)	(18,588)	9,005,329	145,005		9,150,334

Consolidated statement of cash flows	31 December	31 December
	2018	2017
	$	$
Cash flows from operating activities
Adjustments for:
Loss before tax	(1,652,261)	(1,358,690)
Share-based payments	173,832	104,109
Exchange differences	-	408,639
Other reserve movements	-	161,838
	(1,478,429)	(684,104)
Increase/(decrease) in trade and other receivables	(198,266)	71,850
Increase/(decrease) in trade and other payables	291,798	(140,415)
Net cash (used)/generated from operating activities	(1,384,897)	(752,669)
Cash flows from investing activities
Purchase of intangible assets	(139,591)	(67,569)
Purchase of property, plant and equipment	(4,594,101)	(2,723,300)
Cash transferred in business combination	-	(798,664)
Cash acquired with business	-	144,456
	(4,733,692)	(3,445,077)
Cash flows from financing activities
Proceeds from the issuance of ordinary shares	4,653,727	7,035,364
Share-issue expenses	(325,915)	(953,090)
Net cash generated from financing activities	4,327,812	6,082,274
Net (decrease)/increase in cash and cash equivalents	(1,790,778)	1,884,528
Cash and cash equivalents at the beginning of the year	1,903,742	19,214
Cash and cash equivalents at the end of the year	112,964	1,903,742

Significant non-cash transactions:

Employee and consultants' fees and salaries, including directors, were partially paid through the issue of shares in 2017.

1	General information
	Phoenix Global Mining Limited is engaged in exploration and mining activities, primarily precious and base metals, primarily in North America. The Company is domiciled and incorporated in the British Virgin Islands on 19 September 2013 (registered number 1791533). The address of its registered office is OMC Chambers, Wickhams Cay 1, Road Town, Tortola VG1110, British Virgin Islands.
2	Going concern
	In common with many businesses engaged in exploration and evaluation activities prior to production and sale of minerals the Company will require additional funds and/or funding facilities in order to fully develop its business plan. Such funds are likely to come from a combination of further equity issues and the arrangement of appropriate debt and/or offtake finance arrangements. Whilst a number of discussions are ongoing to secure both additional equity and appropriate structured finance for the development of the Empire Mine, and the directors are confident that the necessary funding will be available, at the date of the approval of these financial statements it is not certain that this will be the case.
3	Basis of preparation
	This preliminary information does not comprise full financial statements. The significant accounting policies and other information contained within this preliminary announcement has been extracted from the Company's audited financial statements a copy of which is available on the Company's website: www.pgmining.com. The financial information is presented in US dollars.

4	Revenue from contracts with customers The Group is not yet producing revenues from its mineral exploration and mining activities. The Company charged its subsidiary entities $361,460 (2017: $238,164) in respect of management services provided.

5	Exceptional items of expenditure		31 December	31 December
			2018 $	2017 $
	Admission to trading on the OTCQX Market.		136,127	-
	Expenses of Placing and Subscription		-	302,867
			136,127	302,867

In October 2018 the Company was admitted to trading on the OTCQX Market in New York.  In June 2017 the Company completed an Initial Public Offering (IPO) on the AIM of the London Stock Exchange raising $6.1 million after expenses.

6	Loss per share	31 December	31 December
		2018  $	2017 Restated $
	Loss attributable to the parent used in calculating basic and diluted loss per  Share	(1,635,428)	(1,346,634)
	Number of shares
	Weighted average number of shares for the purpose of basic earnings  per share (restated)	28,120,624	16,498,154
	Weighted average number of shares for the purpose of diluted earnings  per share	28,120,624	16,498,154
	Basic loss per share (US cents per share)	(5.82)	(8.16)
	Diluted loss per share (US cents per share)	(5.82)	(8.16)

Basic earnings per share amounts are calculated by dividing net loss for the year attributable to ordinary equity holders of the parent by the weighted average number of ordinary shares outstanding during the year. On 14 August 2018 the Company consolidated its share capital on the basis of one new share for every ten existing shares, reducing its issued share capital from 318,000,759 shares to 31,800,075 shares. The loss per share for 2017 has been restated on a comparable basis to disclose the loss per share based upon the number of shares after the share consolidation.

Where the Group has incurred a loss in a year or period the diluted earnings per share is the same as the basic earnings per share as the loss has an anti-dilutive effect.

The Company has potentially issuable shares of 3,121,206 (2017: 327,094 restated) all of which relate to the potential dilution in respect of warrants and share options issued by the Company.

7	Non-current assets
		Mining property	Mining development assets	Total
		$	$	$
	At 1 January 2017	-	1,429,987	1,429,987
	Exchange movements	-	4,377	4,377
	At date of acquisition of Konnex	-	1,434,364	1,434,364
	Reclassification	1,434,364	(1,434,364)	-
		1,434,364	-	1,434,364
	Fair-value adjustment on acquisition of subsidiary	684,338	-	684,338
	Additions	2,723,300	-	2,723,300
	Exchange adjustments	440,594	-	440,594
	At 31 December 2017	5,282,596	-	5,282,596
	At 1 January 2018	5,282,596	-	5,282,596
	Additions	4,594,101	-	4,594,101
	At 31 December 2018	9,876,697	-	9,876,697
	Net book value
	1 January 2017	-	1,429,987	1,429,987
	31 December 2017	5,282,596	-	5,282,596
	31 December 2018	9,876,697	-	9,876,697

Mining development assets relate to the past producing Empire Mine copper - gold - silver - zinc project in Idaho, USA. The Empire Mine has not yet recommenced production and no depreciation has been charged in the statement of comprehensive income. There has been no impairment charged in any period due to the early stage in the Group's project to reactivate the mine.

On completion of the acquisition of Konnex the accumulated expenditure on the Empire Mine mining development asset to date was reclassified as mining property.

The principal investment is based in the USA.

8	Intangible assets
				Exploration  and evaluation expenditure
				$
	At 1 January 2017			-
	Additions			67,569
	At 31 December 2017			67,569
	At 1 January 2018			67,569
	Additions			139,591
	At 31 December 2018			207,160

Exploration and evaluation expenditure relates to the Bighorn and Redcastle properties on the Idaho Cobalt Belt in Idaho, USA. The properties are owned by Borah Resources Inc, a wholly owned subsidiary of the parent entity, registered and domiciled in Idaho.

9	Trade and other receivables
				31 December 2018	31  December 2017
				$	$
	Other receivables			212,516	14,250
				212,516	14,250

There were no receivables that were past due or considered to be impaired. There is no significant difference between the fair value of the other receivables and the values stated above.

10	Trade and other payables
				31 December 2018	31  December 2017
				$	$
	Trade creditors			401,231	147,951
	Other creditors			41,570	-
	Accrued expenses			58,500	51,811
				501,301	199,762

All liabilities are payable on demand or have payment terms of less than 90 days. The Company is not exposed to any significant currency risk in respect of its payables.

11	Provisions
					$
	At 1 January 2017				99,987
	Arising from business combination				657,702
	Exchange adjustments				9,755
	At 31 December 2017				767,444
	Exchange adjustments				(9,742)
	At 31 December 2018				757,702

The provision of $100,000 for decommissioning the Empire Mine is based on the directors' estimate after taking into account appropriate professional advice.

The other provision of $657,702 arises from a business combination in 2017 and comprises potential royalties payable in respect of future production at the Empire Mine. This liability will only be payable if the Empire Mine is successfully restored to production and will be deducted from the royalties payable. The amount of the provision will be reassessed as exploration work continues and also on commencement of commercial production.

12	Share capital
				Group and Company	Group and Company
				Number	Number
				2018	2017 Restated
	Number of ordinary shares of no par value
	At the beginning of the year (consolidated)			22,975,552	7,452,687
	Issued in the year			10,103,447	15,528,531
	Treasury shares cancelled in the year			-	(5,666)
	At the end of the year			33,078,999	22,975,552

The Company does not have an authorised capital and is authorised to issue an unlimited number of no par value shares of a single class. In August 2018 the Company consolidated its ordinary shares in a ratio of 1 new ordinary share for each 10 existing shares. The number of shares presented has been restated to reflect the consolidation.

In the year the Company issued 53,095 (consolidated) ordinary shares at £0.21 per share, 200,000 (consolidated) ordinary shares at £0.46 per share, 8,571,429 (consolidated) ordinary shares at £0.35 per share and 1,278,924 ordinary shares at £0.28 to raise $4.7 million before share-issue expenses (2017: 15,528,531 (consolidated) ordinary shares to raise $7.0 million). All issued shares were fully paid.

Since the year end the Company has issued a further 5,588,235 shares at £0.17 per share. The Company currently has 38,667,234 ordinary shares in issue.

The ordinary shares in the Company have no par value. All ordinary shares have equal voting rights in respect of shareholder meetings. All ordinary shares have equal rights to dividends and the assets of the Company.

The Company has issued warrants to subscribe for additional shares to existing shareholders. Each warrant provides the right to the holder to convert one warrant into one ordinary share of no-par value at exercise prices ranging from £0.21 to £0.60. At 31 December 2018 the number of warrants in issue was 1,896,206 (2017: 1,024,308 consolidated).

Since the year end a further 3,108,910 warrants have been issued with an exercise price of £0.28.

The Company has issued options to subscribe for additional shares to the directors and senior management of the Group. Each option provides the right to the holder to subscribe for one ordinary share of no par-value, subject to the vesting conditions, at an exercise price of £0.45. At 31 December 2018 the number of options in issue was 1,225,000 (2017: 1,200,000 consolidated).

The beneficial holdings in shares, warrants and options of each director are disclosed in the Directors' Report on page 9. These shareholdings include those shares held by connected persons of the individual director.

13	Share-based payments

The Company has issued 1,896,206 (2017: 1,024,308 consolidated) warrants to shareholders to subscribe for additional share capital of the Company. Each warrant entitles the holder to subscribe for one ordinary equity share in the Company. The right to convert each warrant is unconditional.

Additionally, the Company has issued 1,225,000 (2017: 1,200,000 consolidated) share options to directors and senior employees of the Company. Each share option entitles the holder to subscribe for one ordinary equity share in the Company once the vesting conditions have been satisfied. The right to subscribe for ordinary shares in the Company is subject to a minimum 12 month holding period for 50% of the share options and a 24 month minimum holding period for the balance of 50% of the share options.

In the periods presented the Company has settled remuneration liabilities by the issue of equity in lieu of cash payments for services but has not operated any equity-settled share based incentivisation schemes for employees.

Equity-settled share-based payments are measured at fair value (excluding the effect of non-market-based vesting conditions) as determined through use of the Black-Scholes technique, at the date of issue. The warrants were issued as exercisable from the date they were issued and there are no further vesting conditions applicable.

	Warrants issued		Weighted	31 December	31 December
			Average	2018	2017
			Exercise price	Number	Number
	At the beginning of the year		£0.44	1,024,308	327,094
	Issued in the year		£0.37	-	697,214
					-
	Issued in the year		£0.40	125,000	-
	Issued in the year		£0.35	427,343	-
	Issued in the year		£0.28	372,650	-
					-
	Exercised in the year		£0.21	(53,095)	-
	At the end of the year		£0.38	1,896,206	1,024,308

	Share options issued		Weighted	31 December	31 December
			average	2018	2017
			Exercise price	Number	Number
	At the beginning of the year		£0.045	1,200,000	-
	Issued in the year		£0.045	25,000	1,200,000
	At the end of the year		£0.045	1,225,000	1,200,000

The total share-based payment charge for all warrants and options issued in the year was $173,832 (2017: $104,109). The share-based payment charge was calculated using the Black-Scholes model. All warrants issued vest immediately on issue. Share options vest over a 24-month period from the date of issue.

Volatility for the calculation of the share-based payment charge in respect of both the warrants and the share-options issued was determined by reference to movements in the Company's quoted share price on AIM from 30 June 2017 and the FTSE350 Mining Stocks Index prior to this date.

The inputs into the Black-Scholes model for the warrants and share options issued and warrants modified in 2018 were as follows:

		31 December	31 December
		2018	2018
		Warrants issued	Share options issued
	Weighted average share price at grant date	£0.33	£0.41
	Weighted average exercise prices	£0.28	£0.45
	Expected volatility	43.63%	33.29%
	Expected life of warrants and options	2.26	2.26
	Weighted average contractual life of outstanding options and warrants in years	2.14	1.50
	Risk-free interest rate	1.5%	1.5%
	Expected dividend yield	0%	0%
	Fair-value of options granted (pence)	£0.10	£0.06

The warrants were issued in six tranches. The weighted average share prices at the date of grant were from £0.26 to £0.50. The weighted average warrant exercise prices at the date of grant were from £0.21 to £0.40. The expected volatility ranged from 28.12% to 54.56%. The fair-values of warrants issued in the year were from £0.05 to £0.27. The expected life of the outstanding warrants and options ranged from 2.0 to 2.4 years.

	Share-based payments charged to profit and loss			31 December	31 December
				2018	2017
				$	$
	On issue of share options			19,553	19,823
	On issue of warrants			154,279	79,263
	On modification of warrants			-	5,023
				173,832	104,109

The share-based payment charge has been classified as an administrative expense, and simultaneously credited to retained deficit.

14	Events after the balance sheet date

In February 2019 the Company allowed its exclusive option to acquire 80% of the Gordon Lake gold property in Northwest Territories, Canada, from ExGen Resources Inc, to lapse. The cost of the option was $25,000, plus 200,000 (consolidated) shares valued at $130,180. The total cost of $155,180 has been written off to cost of sales.

 

END

 

 

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