“When the fossil of an enormous ancient penguin was unearthed in Peru, archaeologists discovered that (its) feathers were brown and gray rather than black and white.” Is “its” used correctly here, as the antecedent of it seems to be fossil rather than a penguin? Thank you.

Both “penguin” and “fossil” are singular, so even if you think the pronoun refers to the fossil (which I disagree with), yes.

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