TIDMCCZ
RNS Number : 9824W
Castillo Copper Limited
29 April 2021
29 April 2021
CASTILLO COPPER LIMITED
("Castillo" or the "Company")
March 2021 Quarterly Report
Castillo Copper Limited (LSE and ASX: CCZ), a base metal
explorer primarily focused on copper across Australia and Zambia,
is pleased to announce its quarterly report for the period 1
January to 31 March 2021.
During the period, the focus was primarily on developing the Big
One Deposit within the Mt Oxide Project in the Mt Isa copper-belt,
north-west Queensland, Australia. An overview of key events
follows:
HIGHLIGHTS
Mt Oxide Project - Big One Deposit and Arya Prospect:
-- Assays confirm major copper discovery at the high-grade Big
One Deposit, as two 40-44m wide intercepts from surface, with up to
16.65% Cu , significantly extended known mineralisation
-- The best apparent intercepts comprise:
o 303RC: 40m @ 1.64% from surface including 11m @ 4.40% from
24m, 5m @ 7.34% from 28m & 1m @ 16.65% from 29m
o 301RC: 44m @ 1.19% Cu from surface including 14m @ 3.55% from
27m, 3m @ 10.88% from 37m & 1m @ 12.6% from 37m
-- Subsequent to quarter end, the compelling case for the Arya
Prospect, which has an interpreted 130m thick potential massive
sulphide target (circa 1,500m by 450m and 426m deep), was outlined
post reviewing legacy BHP and MIM data
BHA Project:
-- Divestment strategies being considered for prime Broken Hill
asset, which is prospective for IOCG and BHT mineralisation
DEVELOPMENT WORK
Castillo has four properties comprising the Mt Oxide Project in
Mt Isa's copper-belt, four assets across Zambia's copper-belt, the
historic Cangai Copper Mine and a large footprint near Broken
Hill's world class silver-zinc-lead deposit in NSW.
Mt Oxide Project
On 11 January 2021, Castillo released assays, which comprised
final laboratory reporting for the 200 (complete) and 300 (partial)
series, including two 40-44m wide intercepts from surface, with up
to 16.65% Cu :
-- 303RC: 40m @ 1.64% from surface including 11m @ 4.40% from
24m, 5m @ 7.34% from 28m & 1m @ 16.65% from 29m
-- 301RC: 44m @ 1.19% Cu from surface including 14m @ 3.55% from
27m, 3m @ 10.88% from 37m & 1m @ 12.6% from 37m
These were excellent assays results, as they make the geological
case more compelling by clearly confirming there is potential for a
high-grade, shallow copper system to be apparent at the Big One
Deposit. Notably, the latest assays significantly extend known
mineralisation and build on high-grade historical intercepts which
produced stellar intercepts from supergene copper mineralisation up
to 28.4% Cu .
On 19 January 2021, Castillo announced the appointment of two
key service providers to facilitate accelerating developing the new
copper discovery at the Big One Deposit, detailed as follows:
-- ROM Resources has been appointed to utilise legacy and
current data to progress the modelling of an inaugural JORC
compliant inferred resource; and,
-- GeoDiscovery Group, has been mandated to undertake an
extensive geophysical survey with two core goals:
1) Potentially extend known mineralisation through the
identification of massive sulphide bedrock conductors along the
1,200m strike extent; and
2) Deliver fresh geophysical insights into several known yet
under-explored nearby anomalies, particularly previously mapped
gossanous outcrops north-east of the recent drilling campaign.
On 10 February 2021, Castillo's geology consultant, ROM
Resources, uncovered comprehensive historical assays from a
drilling campaign undertaken by previously listed Forsayth Minerals
Exploration NL (FME). Combining these findings from FME, with the
final assay results from Castillo's 2020 campaign, clearly extended
the known mineralisation at the Big One Deposit.
The best intercepts include the standout B0017 with up to 9.4%
Cu:
-- BO017: 34m @ 1.51% Cu from surface including 21m @ 2.25% Cu
from surface, 12m @ 3.44% Cu from 3m, 6m @ 4.79% Cu from 3m and 1m
@ 9.4% from 9m
-- BO015: 18m @ 0.86% Cu fm 11m including 6m @ 1.85% Cu from
20m, 3m @ 2.98% Cu from 20m and 1m @ 8% from 20m
Note: Due to the lack of QA/QC and a positional accuracy of
+/-10-20m, FME's drill-holes are regarded as historical
"Exploration Results" and whilst providing support to the existing
information cannot form the basis alone of any resource
estimate.
On 3 March 2021, Castillo stated that due to the prevailing
solid outlook for the global copper market, the Board decided to
re-shape its strategic intent for the Big One Deposit to capitalise
on this prevailing opportunity. In addition, the Board noted it is
cognisant of the improving fundamentals for the global cobalt
market, as the recent drilling campaign verified there is ore grade
cobalt mineralisation also apparent at the Big One Deposit.
The starting point is to firm up plans to apply for a new mining
lease, ahead of Castillo's geology consultant releasing an
inaugural JORC compliant resource. The arguments in favour of
taking this assertive stance are compelling, as the Big One Deposit
already has several high-quality fundamental strengths,
including:
-- A known high-grade shallow copper system that was mined in
1997 - producing 4,400t of supergene ore, averaging 3.5% Cu - via
several open pits;
-- Recent and historical drilling campaigns that have produced
exceptional high-grade intercepts.
New South Wales Projects
-- BHA Project
On 19 January 2021, following a strategic review, Castillo's
Board decided it was an opportune time to capitalise on the
prevailing base and precious metal upcycle to fast-track creating
additional shareholder value. Noting a significant resurgence of
interest in groups with footprints around Broken Hill, notably ASX
listed Cobalt Blue (ASX: COB), the Board decided to consider
divestment opportunities including a possible spin-off of its
sizeable Broken Hill asset into a new vehicle which could be listed
in either London or Australia.
-- Cangai Copper Mine
No material work was undertaken on Cangai Copper Mine during the
quarter.
-- Zambia Projects
No material work was undertaken on the Zambia Projects during
the quarter.
POST QUARTER EVENT
On 7 April 2021, Castillo confirmed that improving weather
conditions should enable a resumption of exploratory work at the
core Mt Oxide Project. In addition, further forensic work has
uncovered eleven targets and more details on the Arya Prospect's
geological potential.
On 13 April 2021, Castillo outlined further compelling insights
into the Arya Prospect, arising from reviewing historical reports
undertaken by BHP and MIM that bolster the exploration potential
ahead of a resumption in the drilling campaign. In addition,
another deep bedrock conductor has been identified at the newly
named Sansa Prospect, immediately west of the Arya Prospect.
However, further interpretation work is required to formulate the
dimensions and determine the prospectivity for copper
mineralisation.
PAYMENTS TO, OR TO AN ASSOCIATE OF, A RELATED PARTY OF THE
ENTITY DURING QUARTER DURING THE QUARTER
$83,000 was paid to related parties of the Company relating to
executive director salary and non-executive director fees.
SUMMARY OF THE EXPLORATION EXPITURE INCURRED DURING THE
QUARTER
Consulting fees Rates and mines departments fees
NSW $85,000 $18,000
QLD $454,000 -
Zambia $15,000 -
---------------- ---------------------------------
$554,000 $18,000
In addition to this release, a PDF version of this report with
supplementary information can be found on the Company's website:
https://www.castillocopper.com/asx-announcements/
For further information, please contact:
Castillo Copper Limited +61 8 6558 0886
Simon Paull (Australia), Managing Director
Gerrard Hall (UK), Director
-------------------
SI Capital Limited (Financial Adviser and
Corporate Broker) +44 (0)1483 413500
-------------------
Nick Emerson
-------------------
Luther Pendragon (Financial PR) +44 (0)20 7618 9100
-------------------
Harry Chathli, Alexis Gore, Joe Quinlan
-------------------
About Castillo Copper
Castillo Copper Limited is an Australian-based explorer
primarily focused on copper across Australia and Zambia. The group
is embarking on a strategic transformation to morph into a mid-tier
copper group underpinned by its core projects:
-- The Mt Oxide project in the Mt Isa copper-belt district,
north-west Queensland, which delivers significant exploration
upside through having several high-grade targets and a sizeable
untested anomaly within its boundaries in a copper-rich region.
-- Four high-quality prospective assets across Zambia ' s
copper-belt which is the second largest copper producer in
Africa.
-- A large tenure footprint proximal to Broken Hill's
world-class deposit that is prospective for
zinc-silver-lead-copper-gold.
-- Cangai Copper Mine in northern New South Wales, which is one
of Australia ' s highest grading historic copper mines.
The group is listed on the LSE and ASX under the ticker
"CCZ."
Competent Person Statement
The information in this report that relates to Exploration
Results for "Big One Deposit" is based on information compiled or
reviewed by Mr Mark Biggs. Mr Biggs is both a shareholder and
director of ROM Resources, a company which is a shareholder of
Castillo Copper Limited. ROM Resources provides ad hoc geological
consultancy services to Castillo Copper Limited. Mr Biggs is a
member of the Australian Institute of Mining and Metallurgy (member
#107188) and has sufficient experience of relevance to the styles
of mineralisation and types of deposits under consideration, and to
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, and
Mineral Resources. Mr Biggs holds an AusIMM Online Course
Certificate in 2012 JORC Code Reporting. Mr Biggs also consents to
the inclusion in this report of the matters based on information in
the form and context in which it appears.
APPIX 1: INTEREST IN MINING TENEMENTS HELD
JACKADERRY (CANGAI)
New England Orogen in NSW
Tenement ID Ownership at start of Quarter Ownership at end of Quarter Change during the Quarter
------------------------------ ---------------------------- --------------------------
EL8635 100% 100% -
------------------------------ ---------------------------- --------------------------
EL8625 100% 100% -
------------------------------ ---------------------------- --------------------------
EL8601 100% 100% -
------------------------------ ---------------------------- --------------------------
BROKEN HILL
located within a 20km radius of Broken Hill, NSW
Tenement ID Ownership at start of Quarter Ownership at end of Quarter Change during the Quarter
------------------------------ ---------------------------- --------------------------
EL8599 100% 100% -
------------------------------ ---------------------------- --------------------------
EL8572 100% 100% -
------------------------------ ---------------------------- --------------------------
EL 8434 0% 100% 100%
------------------------------ ---------------------------- --------------------------
EL 8435 0% 100% 100%
------------------------------ ---------------------------- --------------------------
MT OXIDE
Mt Isa region, northwest Queensland
Tenement ID Ownership at start of Quarter Ownership at end of Quarter Change during the Quarter
------------------------------ ---------------------------- --------------------------
EPM 26513 100% 100% -
------------------------------ ---------------------------- --------------------------
EPM 26525 100% 100% -
------------------------------ ---------------------------- --------------------------
EPM 26574 100% 100% -
------------------------------ ---------------------------- --------------------------
EPM 26462 100% 100% -
------------------------------ ---------------------------- --------------------------
EPM 27440 - 100% -
------------------------------ ---------------------------- --------------------------
Zambia
Project Tenement ID Ownership at start of Ownership at end of Change during the Quarter
Quarter Quarter
-------------- ---------------------------- --------------------------- --------------------------
Lumwana North 23914-HQ-SEL - 100% 100%
-------------- ---------------------------- --------------------------- --------------------------
Lumwana North 23913-HQ-SEL - 100% 100%
-------------- ---------------------------- --------------------------- --------------------------
Mkushi 24659-HQ-LEL - 100% 100%
-------------- ---------------------------- --------------------------- --------------------------
Luanshya 22448-HQ-LEL - 0%* 0%*
-------------- ---------------------------- --------------------------- --------------------------
Luanshya 25195-HQ-LEL - 55% 55%*
-------------- ---------------------------- --------------------------- --------------------------
Luanshya 25273-HQ-LEL - 55%^ 55%^*
-------------- ---------------------------- --------------------------- --------------------------
Mwansa 25261-HQ-LEL - 100%^ 100%^
-------------- ---------------------------- --------------------------- --------------------------
*CCZ can earn up to 80% by meeting previously disclosed
milestones
^ Indicates the tenement is still under application
Appendix 5B
Mining exploration entity or oil and gas exploration entity
quarterly cash flow report
Consolidated statement of cash Current quarter Year to date
flows (9 months)
$A'000 $A'000
1. Cash flows from operating
activities
1.1 Receipts from customers
1.2 Payments for
(a) exploration & evaluation
(b) development
(c) production
(d) staff costs
(e) administration and corporate
costs (423) (1,200)
1.3 Dividends received (see note
3)
1.4 Interest received
1.5 Interest and other costs of
finance paid
1.6 Income taxes paid
1.7 Government grants and tax
incentives
1.8 Other (provide details if
material)
---------------- -------------
Net cash from / (used in)
1.9 operating activities (423) (1,200)
----------------- ----------------------------------- ---------------- -------------
2. Cash flows from investing
activities
2.1 Payments to acquire or for:
(a) entities
(b) tenements (233)
(c) property, plant and equipment
(d) exploration & evaluation (572) (1,357)
(e) investments
(f) other non-current assets (214)
2.2 Proceeds from the disposal
of:
(a) entities
(b) tenements
(c) property, plant and equipment
(d) investments
(e) other non-current assets
2.3 Cash flows from loans to other
entities
2.4 Dividends received (see note
3)
2.5 Other (provide details if
material)
---------------- -------------
Net cash from / (used in)
2.6 investing activities (572) (1,804)
----------------- ----------------------------------- ---------------- -------------
3. Cash flows from financing
activities
Proceeds from issues of equity
securities (excluding convertible
3.1 debt securities) 2,246
3.2 Proceeds from issue of convertible
debt securities
Proceeds from exercise of
3.3 options 240 310
Transaction costs related
to issues of equity securities
3.4 or convertible debt securities (323)
3.5 Proceeds from borrowings
3.6 Repayment of borrowings
3.7 Transaction costs related
to loans and borrowings
3.8 Dividends paid
3.9 Other (provide details if
material)
---------------- -------------
Net cash from / (used in)
3.10 financing activities 240 2,233
----------------- ----------------------------------- ---------------- -------------
4. Net increase / (decrease)
in cash and cash equivalents
for the period
Cash and cash equivalents
4.1 at beginning of period 3,115 3,130
Net cash from / (used in)
operating activities (item
4.2 1.9 above) (423) (1,200)
Net cash from / (used in)
investing activities (item
4.3 2.6 above) (572) (1,804)
Net cash from / (used in)
financing activities (item
4.4 3.10 above) 240 2,233
Effect of movement in exchange
4.5 rates on cash held 40 41
---------------- -------------
Cash and cash equivalents
4.6 at end of period 2,400 2,400
----------------- ----------------------------------- ---------------- -------------
5. Reconciliation of cash and Current quarter Previous quarter
cash equivalents $A'000 $A'000
at the end of the quarter
(as shown in the consolidated
statement of cash flows) to
the related items in the accounts
5.1 Bank balances 2,400 3,115
5.2 Call deposits
5.3 Bank overdrafts
5.4 Other (provide details)
---------------- -----------------
Cash and cash equivalents
at end of quarter (should
5.5 equal item 4.6 above) 2,400 3,115
----------------- ------------------------------------------------ ---------------- -----------------
6. Payments to related parties of the entity Current quarter
and their associates $A'000
Aggregate amount of payments to related
parties and their associates included in
6.1 item 1 53(1)
----------------
6.2 Aggregate amount of payments to related 30(2)
parties and their associates included in
item 2
----------------
(1) Comprises director's fees for the quarter.
(2) Comprises consulting fees paid to the Managing Director.
7. Financing facilities Total facility Amount drawn
Note: the term "facility' amount at quarter at quarter end
includes all forms of financing end $A'000
arrangements available to $A'000
the entity. Add notes as necessary
for an understanding of the
sources of finance available
to the entity.
7.1 Loan facilities
------------------- ----------------
7.2 Credit standby arrangements
------------------- ----------------
7.3 Other (please specify)
------------------- ----------------
7.4 Total financing facilities
------------------- ----------------
7.5 Unused financing facilities available at
quarter end
----------------
7.6 Include in the box below a description of each facility
above, including the lender, interest rate, maturity date
and whether it is secured or unsecured. If any additional
financing facilities have been entered into or are proposed
to be entered into after quarter end, include a note providing
details of those facilities as well.
----------------- ----------------------------------------------------------------------------------------
8. Estimated cash available for future operating $A'000
activities
Net cash from / (used in) operating activities
8.1 (item 1.9) (423)
8.2 (Payments for exploration & evaluation classified (572)
as investing activities) (item 2.1(d))
8.3 Total relevant outgoings (item 8.1 + item (995)
8.2)
8.4 Cash and cash equivalents at quarter end 2,400
(item 4.6)
8.5 Unused finance facilities available at quarter
end (item 7.5)
-------
8.6 Total available funding (item 8.4 + item 2,400
8.5)
-------
Estimated quarters of funding available
8.7 (item 8.6 divided by item 8.3) 2.4
-------
Note: if the entity has reported positive relevant outgoings
(ie a net cash inflow) in item 8.3, answer item 8.7 as
"N/A". Otherwise, a figure for the estimated quarters
of funding available must be included in item 8.7.
8.8 If item 8.7 is less than 2 quarters, please provide answers
to the following questions:
8.8.1 Does the entity expect that it will continue to
have the current level of net operating cash flows for
the time being and, if not, why not?
--------------------------------------------------------------------
Answer: N/A
--------------------------------------------------------------------
8.8.2 Has the entity taken any steps, or does it propose
to take any steps, to raise further cash to fund its operations
and, if so, what are those steps and how likely does it
believe that they will be successful?
--------------------------------------------------------------------
Answer: N/A
--------------------------------------------------------------------
8.8.3 Does the entity expect to be able to continue its
operations and to meet its business objectives and, if
so, on what basis?
--------------------------------------------------------------------
Answer: N/A
--------------------------------------------------------------------
Note: where item 8.7 is less than 2 quarters, all of questions
8.8.1, 8.8.2 and 8.8.3 above must be answered.
----------------- --------------------------------------------------------------------
Compliance statement
1 This statement has been prepared in accordance with accounting
standards and policies which comply with Listing Rule 19.11A.
2 This statement gives a true and fair view of the matters disclosed.
Date: 29 April 2021
Authorised: By the Board
(Name of body or officer authorising release - see note 4)
Notes
1. This quarterly cash flow report and the accompanying activity
report provide a basis for informing the market about the entity's
activities for the past quarter, how they have been financed and
the effect this has had on its cash position. An entity that wishes
to disclose additional information over and above the minimum
required under the Listing Rules is encouraged to do so.
2. If this quarterly cash flow report has been prepared in
accordance with Australian Accounting Standards, the definitions
in, and provisions of, AASB 6: Exploration for and Evaluation of
Mineral Resources and AASB 107: Statement of Cash Flows apply to
this report. If this quarterly cash flow report has been prepared
in accordance with other accounting standards agreed by ASX
pursuant to Listing Rule 19.11A, the corresponding equivalent
standards apply to this report.
3. Dividends received may be classified either as cash flows
from operating activities or cash flows from investing activities,
depending on the accounting policy of the entity.
4. If this report has been authorised for release to the market
by your board of directors, you can insert here: "By the board". If
it has been authorised for release to the market by a committee of
your board of directors, you can insert here: "By the [name of
board committee - eg Audit and Risk Committee]". If it has been
authorised for release to the market by a disclosure committee, you
can insert here: "By the Disclosure Committee".
5. If this report has been authorised for release to the market
by your board of directors and you wish to hold yourself out as
complying with recommendation 4.2 of the ASX Corporate Governance
Council's Corporate Governance Principles and Recommendations, the
board should have received a declaration from its CEO and CFO that,
in their opinion, the financial records of the entity have been
properly maintained, that this report complies with the appropriate
accounting standards and gives a true and fair view of the cash
flows of the entity, and that their opinion has been formed on the
basis of a sound system of risk management and internal control
which is operating effectively.
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END
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