1a474e8e74cefc8df879fa.pdf

` For the quarter ended 30 September 2015


KEY POINTS


  • Unsolicited, conditional off-market takeover offer from Zijin Mining at $0.10 cash per share presented to Phoenix shareholders

  • Evolution Mining launches counter takeover offer comprising 0.06 Evolution shares and $0.06 cash for each Phoenix share

  • Board recommended shareholders REJECT the Zijin Offer as it was inadequate and undervalued the Company

    • Independent Expert valued a Phoenix share at between $0.156 and $0.244 as part of Independent Expert's Report in relation to the Zijin Offer

    • Zijin did not extend its offer period and bid lapsed during the Quarter

  • Board also recommends that shareholders should REJECT the inadequate offer from Evolution as it does not fairly reflect the value of the Phoenix assets

  • Successful completion of a second milling campaign for Kintore West stockpiled ore

    • 108,117 tonnes of ore treated at average grade of 0.81g/t Au for 2,505 ounces of gold

    • Positive cash flow of approximately A$0.57 million from the campaign

  • Exploration has focused on re-interpretation of the Blue Funnel deposit and planning of drill programs on the surrounding Zuleika North tenements.

  • Cash at bank and gold bullion on hand increased to A$4.1 million (30 June 2015: A$3.9 million)

Dated: 16 October 2015


The Board and Management of Phoenix is pleased to present the September 2015 Quarterly Report. We look forward to pursuing our strategy for the benefit of shareholders and the broader regional community in which we operate.



Dale Rogers

Executive Chairman


Phoenix Gold Ltd

ABN 55 140 269 316


Unit 2/53 Great Eastern Highway West Kalgoorlie WA 6430

Phone +61 8 9021 2704

Fax +61 8 9021 3393


www.phoenixgold.com.au

info@phoenixgold.com.au


CORPORATE ACTIVITIES


Takeover Bids by Zijin and Evolution Mining


On 22 June 2015, Zijin announced an all cash off-market takeover offer to acquire all of the ordinary shares that it did not already own in Phoenix at a price of $0.10 per share (the 'Zijin Offer'). The Zijin Offer was unsolicited and conditional including that Zijin must acquire a relevant interest in at least 50.1% of Phoenix shares.


On 20 August 2015, Evolution Mining Limited ('Evolution') put forward an alternative offer for the Company, announcing an intention to make a conditional off-market takeover offer at a headline price of

$0.12 per share, comprising 0.06 Evolution shares and $0.06 cash for each Phoenix Share.


For the purpose of the Company's Target's Statement response to the Zijin Offer, the Directors commissioned an Independent Expert, BDO Corporate Finance (WA) Pty Ltd, to consider whether the Offer was fair and reasonable to shareholders. The Independent Expert valued Phoenix in the range of 15.6 cents to 24.4 cents per share and concluded that the Zijin Offer was Neither Fair Nor Reasonable.


The Directors of Phoenix unanimously recommended shareholders reject the Zijin Offer at $0.10 per share as it was inadequate and did not reflect fair value. Subsequently, Zijin did not extend its offer period and the Zijin Offer closed on 21 September 2015.


The Evolution Offer remains open however the Directors of Phoenix continue to unanimously recommend that Phoenix shareholders REJECT the Evolution Offer. Each of the Directors who holds or controls Phoenix shares intends to REJECT the Evolution Offer in relation to those shares.


To REJECT the Evolution Offer, Phoenix has advised shareholders to simply do nothing.


Further information, including the detailed reasons for the Phoenix Directors' recommendation, is set out in the Company's Target's Statement.


MINING OPERATIONS


Safety and Environment


Safety and environmental performance was satisfactory in the September Quarter with no lost time injuries or reportable environmental incidents.


Page 2 of 16


Supplementary Milling Campaign


A supplementary milling campaign of low grade ore from Kintore West was trialled in June, which was followed up by a second campaign carried out at FMR's Greenfields Processing Plant during the September Quarter. Both campaigns delivered positive cash flows to the Company.


A toll milling campaign commenced on 8 August and was completed on 6 September 2015 with 108,117 tonnes of ore treated at an average grade of 0.81 g/t for 2,505 ounces of gold sold to the Perth mint. Significantly, the campaign delivered further positive cash flow to the Company of approximately A$570,000 over the four weeks of milling.


To reduce the costs of the recent campaign and any subsequent campaigns, Phoenix negotiated improved terms with both FMR and the trucking contractor, MLG Oz. Furthermore, mill performance improved throughout the campaign significantly increasing mill throughput and reducing reagent consumption without compromising recoveries to any great extent, further reducing the milling cost per tonne.


After completion of the latest campaign, the remaining stockpile at Kintore West was approximately 550,000 tonnes. The low grade stockpile has no attributable mining costs, no carrying value and will only incur costs for haulage and treatment.


Subsequent to Quarter end Phoenix has commenced a new campaign which will again target in excess of 100,000 tonnes of ore and is expected to run through to the end of October or early November 2015.


BUSINESS DEVELOPMENT


Norton Joint Venture arrangements


Phoenix continues to engage with Norton Gold Fields Ltd to complete and execute the final Licence to Mine and Ore Sale Agreement with respect to Castle Hill Stage 1. Under the Agreement, Norton is to fund upfront capital, mining, haulage and milling, with Phoenix receiving 50% of the cumulative cash surplus.

Development at the Mick Adams and Wadi open pit projects (forming Castle Hill stage 1) is expected to commence shortly after the Agreement is signed.


Heap Leach Project


During the Quarter the Company elected to withdraw from the option to acquire the second hand heap leach processing plant from St Ives Gold Mines Ltd ('SIGM'). Completion of the SIGM purchase would have resulted in significant short term capital expenditure requirements, which in light of current corporate activities, was not considered to be in the best interests of all shareholders.


Page 3 of 16


The development of a heap leach arm to the Phoenix business model remains an important part of the Company's strategy and further updates will be provided in the coming quarter.


EXPLORATION AND EVALUATION


Significant mineralisation at Kundana has been identified on the lithological contacts adjacent to the main Zuleika structure, and these contacts represent sites of significant exploration potential in the Company's Zuleika tenure. Re-interpretation of the Blue Funnel project was completed during the Quarter. The aim of this work was to identify and geologically model high grade intercepts from the historic drilling which were associated with quartz veins and quartz infilled faults mapped and sampled in the pit walls. Most quartz veins identified had short strike and down dip continuity and two structures were identified which could be mapped in the pit over 75 metres. These structures were quartz infilled fault zones, which appeared to be mineralised in the drilling. The structures have been poorly drilled and the northern most structure remains open to the north.


The structural data identified from the re-interpretation of the Blue Funnel deposit was also employed in refining drilling targets on the Zuleika North tenements.


A small geochemical sampling program was commenced on the tenements to the north of Kintore. The aim of the program was to complete the geochemical grid over the northern extent of the Kintore tonalite and to delineate any areas of anomalous gold values. Samples will be analysed for a suite of multi-elements which will be used to also identify areas of potential gold mineralisation and identify underlying lithologies.


Blue Funnel Underground Exploration


The Company has commenced underground exploration activities at the Blue Funnel project. There are several narrow very high grade quartz/carbonate veins exposed in the pit walls, particularly in the Northern wall, and one promising vein in the Southern wall, which is being investigated via developing horizontal adits (tunnels) utilising airleg development to follow the veins along strike. In addition, there are also several other vein sets highlighted in the drilling to the west, and potentially in the east of the proposed development that will also be explored.


Gold mineralisation at Blue Funnel is located within the NNW trending Zuleika Shear Zone, a major tectonic break marking the western boundary of the Menzies-Kambalda Greenstone Belt. The Zuleika Shear Zone hosts numerous gold mines and deposits.


Regulatory approvals have been received and a competitive contract tender process completed. GBF Underground Mining Contractors have been awarded the works and have successfully mobilised and established the site, with development underway.


Finance


Total cash at bank and bullion on hand as at 30 September 2015 increased to $4.1 million (30 June 2015:

$3.9 million).


During the quarter, $1.3M was received from a research and development refund from the Australian Tax Office. The Company also generated positive cash flow from the processing of stockpiled material at Kintore West.


Issued Share Capital


Class of securities

Issued as at 31 March 2015

Fully paid ordinary shares

470,087,333


Unlisted Options



Unlisted Options

Exercise price

Expiry date

4,875,000

A$0.33

10 June 2016

6,375,000

A$0.15

27 November 2017


Directors and Secretary


Executive Chairman Dale Rogers

Non-Executive Director Stuart Hall Non-Executive Director & Company Secretary Ian Gregory


About Phoenix

Phoenix Gold Ltd is an emerging Australian exploration and development company with an extensive land holding on the Zuleika and Kunanalling shear zones northwest of Kalgoorlie in Western Australia, home to some of Australia's richest gold deposits.

Kalgoorlie-based Phoenix is aiming to significantly grow its JORC-classified resources, complete definitive feasibility studies on core projects and to continue aggressive exploration.

The 100% owned Castle Hill gold project is emerging as a flagship asset with the potential to become a multi-million ounce gold mine with excellent metallurgy and close to all major infrastructure. Castle Hill is one of many well-endowed gold systems within Phoenix's portfolio.

With a balanced mix of exploration (new discoveries and extensions) and development of a sustainable production profile, Phoenix aims to grow a significant gold company for the benefit of all stakeholders.


Table 1: Phoenix Gold - Summary of Mineral Resources



Project (Mill Feed)

Measured Mineral Resource

Indicated Mineral Resource

Inferred Mineral Resource

Total Mineral Resource


Mt


Au (g/t)


Au Oz


Mt


Au(g/t)


Au oz


Mt

Au (g/t)


Au Oz


Mt


Au (g/t)


Au Oz

Mick Adams/Wadi Kintore

Castle Hill Stage 3 Red Dam

Broads Dam Burgundy Kunanalling Ora Banda Carbine Zuleika North

Stockpiles


0.49


2.0


31,000

18.09

3.03

2.38

2.05

0.13

0.40

0.46

2.36

1.70


0.08

1.5

1.6

1.4

2.1

2.9

2.3

2.4

2.0

1.6


1.4

894,000

160,000

109,000

140,000

12,000

29,000

35,000

149,000

86,000


4,000

6.39

4.21

1.36

1.04

2.16

0.09

4.12

2.79

0.21

0.62

1.3

1.8

1.3

2.2

2.3

1.5

1.7

1.8

2.1

2.5

274,000

239,000

59,000

74,000

158,000

4,000

229,000

163,000

14,000

49,000

24.48

7.24

3.74

3.09

2.29

0.98

4.58

5.15

1.91

0.62

0.08

1.5

1.7

1.4

2.2

2.3

2.0

1.8

1.9

1.6

2.5

2.5

1,168,000

399,000

168,000

214,000

170,000

65,000

264,000

312,000

100,000

49,000

4,000

Total

0.49

2.0

31,000

30.68

1.6

1,618,000

22.99

1.7

1,263,000

54.16

1.7

2,913,000



Project (Heap leach feed)

Measured Mineral Resource

Indicated Mineral Resource

Inferred Mineral Resource

Total Mineral Resource


Mt


Au (g/t)


Au Oz


Mt


Au(g/t)


Au oz


Mt

Au (g/t)


Au Oz


Mt


Au (g/t)


Au Oz

Mick Adams/Wadi


1.04


0.6


22,000

21.54

0.6

400,000

10.98

0.6

198,000

32.52

0.6

598,000

Kintore

6.68

0.6

131,000

7.87

0.6

156,000

14.55

0.6

287,000

Castle Hill Stage 3

3.80

0.6

68,000

2.01

0.6

36,000

5.81

0.6

104,000

Burgundy

0.86

0.6

18,000

0.22

0.6

4,000

2.12

0.6

44,000

Red Dam

1.89

0.7

44,000

0.97

0.7

23,000

2.86

0.7

67,000

Stockpiles

0.48

0.6

9,000

0.48

0.6

9,000

Total

35.25

0.6

670,000

22.05

0.6

417,000

58.34

0.6

1,109,000


Total Jan 2015

0.49

2.0

31,000

65.93

1.1

2,288,000

45.04

1.2

1,680,000

112.50

1.1

4,022,000


For further information please contact:

Investors Media

Dale Rogers, Executive Chairman - PXG James Tranter

(08) 9021 2704 FTI Consulting

info@phoenixgold.com.au (08) 9485 8888 or 0408 951 780


Visit us at www.phoenixgold.com.au


Qualification Statements

The information in this report that relates to Ore Reserves relating to Castle Hill Stages 1, 2 and 3, Red Dam and Carbine is based on information compiled by Mr Glenn Turnbull who is a Fellow of the Institute of Material, Minerals and Mining. Mr Glenn Turnbull is a full time employee of Golder Associates Ltd and has sufficient experience which is relevant to the engineering and economics of the types of deposits which are covered in this report and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2012 edition of the 'Australian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves'. Glenn Turnbull consents to the inclusion in this report of matters based on his information in the form and context in which it appears.

The information in this report that relates to Ore Reserves other than Castle Hill Stages 1, 2 and 3, Red Dam and Carbine is based on information compiled by Mr William Nene who is a member of The Australian Institute of Mining and Metallurgy. Mr William Nene is a full time employee of Goldfields Mining Services Pty Ltd and has sufficient experience which is relevant to the engineering and economics of the types of deposits which are covered in this report and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2004 edition of the 'Australian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves'. William Nene consents to the inclusion in this report of matters based on his information in the form and context in which it appears.

The information in this report that relates to Mineral Resource Estimation for Castle Hill Stage 1 and 3 is based on information compiled by Mr Brian Fitzpatrick, Senior Consulting Geologist for Cube Consulting. Mr Fitzpatrick is a Member of the Australasian Institute of Mining and Metallurgy and is also an accredited Chartered Professional Geologist. Mr Fitzpatrick has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration to qualify as a Competent Person as defined in the 2012 Edition of the 'Australasian Code for Reporting of Exploration Results, Mineral resources and Ore Reserves' (JORC Code). Mr Fitzpatrick consents to the inclusion in this report of the matters based on their information in the form and context in which it appears.

The information in this report that relates to Mineral Resource Estimation for Red Dam and Burgundy is based on information compiled by Dr Sia Khosrowshahi Principal Consulting Geologist for Golder Associates Pty Ltd. Dr Khosrowshahi is a Member of the Australasian Institute of Mining and Metallurgy. Dr Khosrowshahi has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration to qualify as a Competent Person as defined in the 2012 Edition of the 'Australasian Code for Reporting of Exploration Results, Mineral resources and Ore Reserves' (JORC Code). Dr

Attachment 1 - Phoenix Gold Limited and its controlled entity tenement holdings


Tenement


Location


Interest at the beginning of the

qtr.


Acquisitions


Disposals


Interest at the end of the qtr.

Mining Tenements


Coolgardie


100%


100%


100%

E16/0359

E16/0360

Coolgardie

100%

100%

E16/0364

Coolgardie

100%

100%

E16/0371

Coolgardie

100%

100%

E16/0402

Coolgardie

100%

100%

G16/0010

Coolgardie

100%

100%

G16/0019

Coolgardie

100%

100%

G16/0020

Coolgardie

100%

100%

L15/0344

Coolgardie

100%

100%

L16/0015

Coolgardie

100%

100%

L16/0016

Coolgardie

100%

100%

L16/0020

Coolgardie

100%

100%

L16/0021

Coolgardie

100%

100%

L16/0035

Coolgardie

100%

100%

L16/0046

Coolgardie

100%

100%

L16/0050

Coolgardie

100%

100%

L16/0078

Coolgardie

100%

100%

L16/0084

Coolgardie

100%

100%

L16/0093

Coolgardie

100%

100%

L16/0095

Coolgardie

100%

100%

L16/0097

Coolgardie

100%

100%

L16/0098

Coolgardie

100%

100%

L16/0099

Coolgardie

100%

100%

L16/0100

Coolgardie

100%

100%

L16/0101

Coolgardie

100%

100%

L16/0108

Coolgardie

100%

100%

L16/0109

Coolgardie

100%

100%

L16/0110

Coolgardie

100%

100%

L16/0112

Coolgardie

100%

100%

L16/0113

Coolgardie

0%

100%

L24/0210

Kalgoorlie

100%

100%


Page 9 of 16


Khosrowshahi consents to the inclusion in this report of the matters based on their information in the form and context in which it appears. The information in this report that relates to Exploration Results and other Resources are based on information compiled by Ian Copeland who is an employee of the company and fairly represent this information. Mr Copeland has sufficient experience of relevance to the styles of mineralization and the types of deposits under consideration, and the activities undertaken, to qualify as a Competent Person as defined in the 2012 Edition of the Joint Ore Reserves Committee (JORC) Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves. Mr Copeland consents to inclusion in this report of the matters based on his information in the form and context in which it appears.

Forward Looking Statements

This release contains forward-looking statements. Wherever possible, words such as 'intends', 'expects', 'scheduled', 'estimates', 'anticipates', 'believes', and similar expressions or statements that certain actions, events or results 'may', 'could', 'would', 'might' or 'will' be taken, occur or be achieved, have been used to identify these forward-looking statements. Although the forward-looking statements contained in this release reflect management's current beliefs based upon information currently available to management and based upon what management believes to be reasonable assumptions, The Company cannot be certain that actual results will be consistent with these forward-looking statements. A number of factors could cause events and achievements to differ materially from the results expressed or implied in the forward-looking statements. These factors should be considered carefully and prospective investors should not place undue reliance on the forward-looking statements. Forward-looking statements necessarily involve significant known and unknown risks, assumptions and uncertainties that may cause the Company's actual results, events, prospects and opportunities to differ materially from those expressed or implied by such forward-looking statements. Although the Company has attempted to identify important risks and factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors and risks that cause actions, events or results not to be anticipated, estimated or intended, including those risk factors discussed in the Company's public filings. There can be no assurance that the forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, prospective investors should not place undue reliance on forward-looking statements. Any forward-looking statements are made as of the date of this release, and the Company assumes no obligation to update or revise them to reflect new events or circumstances, unless otherwise required by law. This release may contain certain forward looking statements and projections regarding: estimated resources and reserves; planned production and operating costs profiles; planned capital requirements; and planned strategies and corporate objectives.

Such forward looking statements/projections are estimates for discussion purposes only and should not be relied upon. They are not guarantees of future performance and involve known and unknown risks, uncertainties and other factors many of which are beyond the control of the Company. The forward looking statements/projections are inherently uncertain and may therefore differ materially from results ultimately achieved. The Company does not make any representations and provides no warranties concerning the accuracy.


L24/0211

Kalgoorlie

100%

100%

L24/0212

Kalgoorlie

100%

100%

L24/0213

Kalgoorlie

100%

100%

M15/0696

Coolgardie

100%

100%

M16/0015

Coolgardie

100%

100%

M16/0016

Coolgardie

100%

100%

M16/0017

Coolgardie

100%

100%

M16/0019

Coolgardie

95%

95%

M16/0022

Coolgardie

100%

100%

M16/0024

Coolgardie

100%

100%

M16/0029

Coolgardie

100%

100%

M16/0032

Coolgardie

100%

100%

M16/0033

Coolgardie

100%

100%

M16/0036

Coolgardie

100%

100%

M16/0040

Coolgardie

100%

100%

M16/0047

Coolgardie

100%

100%

M16/0052

Coolgardie

100%

100%

M16/0099

Coolgardie

100%

100%

M16/0139

Coolgardie

100%

100%

M16/0140

Coolgardie

100%

100%

M16/0141

Coolgardie

100%

100%

M16/0152

Coolgardie

100%

100%

M16/0178

Coolgardie

100%

100%

M16/0179

Coolgardie

100%

100%

M16/0183

Coolgardie

100%

100%

M16/0187

Coolgardie

100%

100%

M16/0189

Coolgardie

100%

100%

M16/0195

Coolgardie

100%

100%

M16/0198

Coolgardie

100%

100%

M16/0199

Coolgardie

100%

100%

M16/0200

Coolgardie

100%

100%

M16/0215

Coolgardie

100%

100%

M16/0217

Coolgardie

100%

100%

M16/0236

Coolgardie

100%

100%

M16/0248

Coolgardie

100%

100%

M16/0306

Coolgardie

100%

100%

M16/0335

Coolgardie

100%

100%

M16/0344

Coolgardie

100%

100%

M16/0354

Coolgardie

100%

100%


M16/0405

Coolgardie

100%

100%

M16/0444

Coolgardie

100%

100%

M16/0451

Coolgardie

100%

100%

M16/0526

Coolgardie

100%

100%

M16/0527

Coolgardie

100%

100%

M16/0532

Coolgardie

100%

100%

M16/0533

Coolgardie

100%

100%

M16/0535

Coolgardie

100%

100%

M16/0536

Coolgardie

100%

100%

M16/0537

Coolgardie

100%

100%

M16/0538

Coolgardie

100%

100%

M24/0067

Kalgoorlie

100%

100%

M24/0100

Kalgoorlie

100%

100%

M24/0195

Kalgoorlie

100%

100%

M24/0196

Kalgoorlie

100%

100%

M24/0274

Kalgoorlie

100%

100%

M24/0366

Kalgoorlie

100%

100%

M24/0367

Kalgoorlie

100%

100%

M24/0388

Kalgoorlie

100%

100%

M24/0391

Kalgoorlie

100%

100%

M24/0404

Kalgoorlie

100%

100%

M24/0413

Kalgoorlie

100%

100%

M24/0436

Kalgoorlie

100%

100%

M24/0463

Kalgoorlie

100%

100%

M24/0558

Kalgoorlie

100%

100%

M24/0603

Kalgoorlie

100%

100%

M24/0604

Kalgoorlie

100%

100%

M24/0644

Kalgoorlie

100%

100%

M24/0707

Kalgoorlie

100%

100%

M24/0713

Kalgoorlie

100%

100%

P15/4891

Coolgardie

100%

100%

P15/4892

Coolgardie

100%

100%

P15/4893

Coolgardie

100%

100%

P15/4894

Coolgardie

100%

100%

P15/4895

Coolgardie

100%

100%

P15/4896

Coolgardie

100%

100%

P15/4897

Coolgardie

100%

100%

P15/4898

Coolgardie

100%

100%

P15/4899

Coolgardie

100%

100%


P15/4900

Coolgardie

100%

100%

P15/4901

Coolgardie

100%

100%

P15/4902

Coolgardie

95%

95%

P15/5022

Coolgardie

100%

100%

P15/5023

Coolgardie

100%

100%

P15/5024

Coolgardie

100%

100%

P15/5025

Coolgardie

100%

100%

P15/5920

Coolgardie

100%

100%

P15/5921

Coolgardie

100%

100%

P16/2223

Coolgardie

100%

100%

0%

P16/2244

Coolgardie

100%

100%

P16/2245

Coolgardie

100%

100%

P16/2375

Coolgardie

100%

100%

P16/2376

Coolgardie

100%

100%

P16/2378

Coolgardie

100%

100%

P16/2379

Coolgardie

100%

100%

P16/2381

Coolgardie

100%

100%

P16/2382

Coolgardie

100%

100%

P16/2383

Coolgardie

100%

100%

P16/2384

Coolgardie

100%

100%

P16/2385

Coolgardie

100%

100%

P16/2386

Coolgardie

100%

100%

P16/2387

Coolgardie

100%

100%

P16/2388

Coolgardie

100%

100%

P16/2415

Coolgardie

100%

100%

P16/2416

Coolgardie

100%

100%

P16/2417

Coolgardie

100%

100%

P16/2418

Coolgardie

100%

100%

P16/2431

Coolgardie

100%

100%

P16/2432

Coolgardie

100%

100%

P16/2445

Coolgardie

100%

100%

P16/2446

Coolgardie

100%

100%

P16/2447

Coolgardie

100%

100%

P16/2448

Coolgardie

100%

100%

P16/2449

Coolgardie

100%

100%

P16/2450

Coolgardie

100%

100%

P16/2451

Coolgardie

100%

100%

P16/2452

Coolgardie

100%

100%

P16/2453

Coolgardie

100%

100%

distributed by