LONDON (ShareCast) - (Sharecast News) - Phoenix Copper announced on Thursday that it has signed a non-binding letter of intent with a US-based investor for the proposed placement of $75m in secured corporate copper bonds.
The AIM-traded emerging producer, focused on US base and precious metals, said the bonds would carry a minimum floating rate of 8.5% and mature between 2029 and 2033.

Subject to final due diligence and legal documentation, the funds were expected to be drawn down in three tranches, with an initial $30m to be released upon execution of final agreements.

The deal also included the issue of a zero-par preference share convertible into 25 million new ordinary shares at 5p each.

Phoenix said the conversion rights would vest in line with the staged drawdown of the bonds, and would represent around 10.5% of Phoenix's enlarged share capital if fully converted.

Following the first tranche, the investor would be entitled to appoint a director to Phoenix's board, subject to standard regulatory approvals and suitability checks.

Phoenix said it was confident the transaction would proceed but cautioned there was no guarantee the placement would be finalised.

Proceeds from the bond issuance were expected to support the company's development plans across its Idaho-based copper and precious metals projects.

"We have been in discussions with the Investor for a number of months, and we look forward to completing the appropriate legal documentation and welcoming the Investor on board as both a bondholder and, through the proposed conversion of the preference share, a shareholder," said chief financial officer Richard Wilkins.

"This proposed placement of bonds will provide the company with the cash resources to complete construction of the Empire open-pit copper, gold and silver mine in Idaho, and proceed into production, as well as commencing an underground drilling programme on the Empire sulphide vein system, by way of driving an initial adit to the known high-grade 8.38% copper zone."

At 1231 BST, shares in Phoenix Copper were up 52.43% at 5.64p.

Reporting by Josh White for Sharecast.com.

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