Leigh Creek Assets

PNX holds three mining leases located just north of Leigh Creek, which were acquired in 2010 along with a heap leach processing plant. The Company also holds two exploration licenses in this region, increasing the opportunity for additional mineral resources.

The Company produced approximately 425 tonnes of copper cement during 2010 and 2011, however operations were put on care and maintenance at the beginning of 2012 due to low levels of copper recovery resulting in unprofitable operations. A JORC indicated resource across the three Leigh Creek mining leases remains of 19,600 tonnes at 0.9% copper (0.4% cut-off).

In April 2015, the Company executed an Option and Sale Agreement (Agreement) with private company Hillsgold Resources Pty Ltd (now Resilience Mining Australia Limited, ‘RMA’) regarding the Leigh Creek assets. Under the Agreement, RMA has the option to acquire Leigh Creek Copper Mine Pty Ltd (holder of the three mining leases) as well as the two exploration licences previously noted, in return for preparing and submitting to the State government updated environmental plans (PEPRs) for the three mining leases, and also preparing certain feasibility studies on the leases, within 9 months of the date of the Agreement.

RMA has fulfilled its obligations under the Agreement and has until October 2016 at the latest to exercise the Option.

Should RMA exercise the option, it will acquire LCCM, and the two exploration licences mentioned, from the Company for nil up-front consideration (other than the assumption of the rehabilitation obligations at Mountain of Light) and a contingent payment to the Company of $100,000 if and when 3,000 tonnes of copper are produced from future operations at any of the three mining leases.