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Phoenix Gold Advances Strategic Alliance With Evolution Mining

Phoenix Gold (ASX:PXG) recently formed a strategic partnership with Evolution Mining (NYSE:EVN) that will see it invest up to $9 million through subscription of 105.9 million Phoenix shares at an average price of $0.085.

The new funds will enable an accelerated exploration of the company's highly prospective Zuleika shear gold projects in Western Australia.

The investment is a huge coup for Phoenix, recognising the potential of its broader prospective gold projects and provides additional financial capacity to deliver on the growth strategy.

The ASX has now granted a waiver from Listing Rule 6.18, fulfilling a condition precedent to a proposed issue of shares.

Dale Rogers, executive chairman of Phoenix, commented: "We are pleased to be advancing satisfaction of conditions precedent to the Agreement with Evolution.

"We look forward to the shareholder meeting in June where we aim to conclude the second tranche placement with Evolution and commence the accelerated exploration program on our Zuleika project."

Phoenix said that under the Share Subscription Agreement, upon completion of the issue of the second tranche of shares to Evolution and subject to certain conditions, Evolution will have a right to participate in any new issues of shares in Phoenix.

This will be on the same terms as other participants in that share issue, up to such additional number of equity securities as is sufficient to enable Evolution to maintain its ownership percentage in Phoenix.

It will also be subject to compliance with any shareholder or regulatory approvals that may be required for any such issue.

Phoenix added that it has been informed by Evolution that the Agreement is no longer subject to Evolution obtaining FIRB approval.

Previously advised Transaction Terms

Under the binding share subscription agreement, Evolution will subscribe for up to a total of 105.9 million PXG shares priced at $0.085 each.

The first tranche of 44 million shares priced at $0.075 each is subject to certain conditions including the average daily spot price for gold not falling below A$1,300 per ounce for three consecutive days prior to completion.

Evolution will also subscribe for a further 61.9 million fully paid ordinary shares priced at $0.092 under the second tranche.

This is subject to:

- Evolution obtaining FIRB approval;
- Phoenix shareholder approval and regulatory approvals;
- ASX granting a waiver in respect of the anti-dilution right; and
- The average daily spot price for gold not falling below A$1,300 per ounce for three consecutive days prior to completion of Tranche 2.

On completion of the second tranche, Evolution will have the right to nominate a director to Phoenix's board and the right to participate in any new issues of shares on the same terms as other participants to maintain its ownership percentage.

Evolution will also hold a first right of refusal over any future potential tenement sales or joint venture developments in the area located within a 75 kilometre radius from the Mungari processing plant where there are no pre-existing agreements and obligations already in place.

In addition, Phoenix will allocate 60% of the $9 million investment to accelerate exploration on the Zuleika shear gold projects.

Evolution will review and assess Phoenix's exploration and feasibility programs and provide technical, strategic and financing input where appropriate.

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