ESG

Environmental, Social & Governance

Our Commitment

Environmental Sustainability, Social Responsibility, Transparent Governance

Phoenix Copper Limited is committed to being a leader in modern mining practices by making environmental stewardship, social responsibility, and transparent governance (ESG) the foundation of everything we do. In June 2021, we established an ESG & Sustainability Committee. The role of the committee is to ensure the practices of Phoenix Copper and its subsidiaries are meeting or exceeding the laws and regulations put in place to protect the natural resources and communities located in and around its mining operations.

Environmental Stewardship

Phoenix Copper and its subsidiaries take environmental responsibilities seriously. We have commissioned independent environmental and socio-economic studies to determine the impacts of opening the Empire open pit copper mine and to serve as a guide for the best way to mitigate these impacts. The following environmental assessments have been commissioned since 2017, some of which continue on an ongoing basis:

Visual Resources, Noise Monitoring, Surface and Groundwater Resources, Environmental Geochemistry, Meteorological, Socioeconomic Reports, Soil Resources, Seismic Evaluation, Wildlife & Vegetation, Geotechnical and Socioeconomic Surveys of Transportation Routes, Archaeological Study

Reclamation

The Company will adhere to all federal reclamation requirements during operations and as part of closure. Phoenix Copper will be required to post a cash reclamation bond prior to the commencement of mining activities. The bond will only be redeemable once all reclamation activities are complete and approved by the regulatory authority. Phoenix Copper intends to oversee this work to the highest standards.

Social Responsibility

Supporting the local community is critically important to Phoenix. CEO Ryan McDermott and many of our Mackay-based employees and community stakeholders have longstanding generational ties to Mackay and the Lost River Valley. They have a fierce pride in its mining history and outstanding natural beauty and have every incentive to be responsible long term environmental stewards and good neighbors.

Stakeholder Engagement

The Konnex Community Advisory Team was formed in February 2022 to act as liaison between the Company and residents of Custer and Butte counties. The committee is made up of a minimum of 10 independent resident citizens with diverse but relevant experience and 3 Phoenix representatives.

Emergency Services

We will provide fire, ambulance, and paramedic services on the mine site. The Company will collaborate with local emergency services including law enforcement, ambulance, and fire.

Water Quality

In the summer of 2021, we drilled a network of eleven water monitoring wells to establish baseline water quality, and these will remain in place, allowing us to continue to monitor water quality throughout the life of the mine. Hydrologists have established that there will be no impact on water quality whatsoever. This will be confirmed by the Environmental Impact Statement.

Traffic

The operating plan proposes to use a public road to access the mine site. However, engineers are evaluating possible alternative transportation routes.

Education

Increased student enrollment in the local school district will result in increased state funding.

Employment

We are committed to hiring staff and procuring equipment and supplies locally for our own operations, and will require our suppliers, including the mine construction firm, to do the same. We anticipate hiring a significant portion of our workforce from Custer and Butte counties, providing local residents with the first opportunity for employment. We will then advertise on a state-wide basis before extending our search to the Western US. We will aim for diversity wherever possible.

Corporate Governance

The Company will adhere to all federal, state, and local environmental, employment, and health and safety laws. Regular reviews of operational performance standards will occur over the life of the mine. In addition, the Company will further develop and promote ethical and transparent corporate reporting standards, and community and environmental stewardship programs.

Our Policies

The Audit Committee is composed of two non-executive directors, Andre Cohen (committee chair) and Catherine Evans. The Audit Committee meets at least four times annually. The committee is responsible for ensuring that the financial performance of the Company is properly reported and reviewed. Its role also includes monitoring: (i) the integrity of the financial statements of the Company (including annual and interim accounts and results announcements), (ii) reviewing internal control and risk management systems, (iii) reviewing any changes to accounting policies, (iv) reviewing and monitoring the extent of the non-audit services undertaken by external auditors and (v) advising on the appointment of external auditors. The Audit Committee has unrestricted access to the Company’s external auditors. The Audit Committee also has responsibility for ensuring that the Company has in place the procedures, resources and controls to enable compliance with the AIM Rules and with MAR.

The Remuneration Committee is composed of one non-executive director, Andre Cohen, and one advisory board member, Dennis Thomas. It meets at least twice a year. The Remuneration Committee is responsible for determining the Company’s policy on the remuneration packages of the directors and executives. The Remuneration Committee also has responsibility for: (i) recommending to the Board a compensation policy for directors and executives and monitoring its implementation; (ii) approving and recommending to the Board and the Company’s shareholders, the total individual remuneration package of the chairman, each executive and non-executive director and the chief executive officer (including bonuses, incentive payments and share options or other share awards); and (iii) approving and recommending to the Board the total individual remuneration package of the Company Secretary and all other senior executives (including bonuses, incentive payments and share options or other share awards), in each case within the terms of the Company’s remuneration policy and in consultation with the chairman of the Board and/or the chief executive officer. No Director or manager may be involved in any discussions as to their own remuneration.

The ESG & Sustainability Committee is chaired by non-executive director Catherine Evans and advisory board members Harry Kenyon-Slaney and Dennis Thomas. The Committee meets at least three times a year and provides specific oversight of risks, obligations and opportunities in the areas of:(i) Safety and the attainment of zero harm in the Group’s operations and for those affected by the Group’s operations; (ii) Health and Well-being: including the health and safety of the Group’s employees and contractors; (iii) Environment: including protection of the environment, material stewardship, long-term mine closure liabilities, management of legacy issues, water management and climate change; (iv) Social Impact Management and Socio-Economic Development: including relationships with communities, community development, human rights, resettlement, housing and indigenous peoples; (v) Socio-Political Issues: including such issues as contributions to national and local socio-economic development, permitting, long-term economic development and land access; (vi) Supply Chain: specifically local and inclusive employment and procurement, supplier assurance and the impact of procurement decisions on human health and the environment. The Committee’s responsibilities shall include oversight and review of: (i) The Group’s policies, frameworks, standards and guidelines relating to sustainability, the environment and stakeholder concerns; (ii) Management processes, resources and responses relating to sustainability incidents and compliance with ESG and sustainability policies; (iii) Risk management for assessing and managing risks falling within the scope

The Company considers that, at this stage of its development, and given the current size of its board, it is not necessary to establish a formal nominations committee. This position will be reviewed on a regular basis by the Directors.

The Company has adopted a share dealing policy for the Board and certain employees in accordance with the provisions of MAR and the AIM Rules, and the Company will take all reasonable steps to ensure compliance by the Board and any relevant “applicable employees” (as defined in the AIM Rules) with such code.

The Company has implemented an anti-bribery and corruption policy and also implemented appropriate procedures to ensure that the Board, employees and consultants comply with the UK Bribery Act 2010.