TIDMCCZ
RNS Number : 8558F
Castillo Copper Limited
13 July 2023
13 July 2023
CASTILLO COPPER LIMITED
("Castillo", or the "Company")
Initial pit optimisation delivers A$28m NPV for Big One
Castillo Copper Limited (LSE and ASX: CCZ), a base metal
explorer primarily focused on copper across Australia and Zambia,
is pleased to announce that it has received a preliminary pit
optimisation study on Big One Deposit from Entech Group(1) which
produced a A$28m Net Present Value ("NPV") (Figure 1).
HIGHLIGHTS:
-- The preliminary pit optimisation study - completed by
Perth-based Entech Group ("Entech")(1) - for the Big One Deposit,
which is part of the NWQ Copper Project, delivered a $28m NPV
-- Drilling down, the study focused on the near-surface
component of known mineralisation at the Big One Deposit (Mineral
Resource Estimate: 2.1Mt @ 1.1% Cu for 21,886t copper metal -
inferred)(2) and provides significant confidence a standalone
mining operation can potentially be developed
-- Key findings indicate an initially optimised pit shell could
potentially deliver up to 6,266t copper (head grade: 1.42% Cu),
4,362oz silver (head grade: 0.31 g/t Ag) and 1,469t cobalt (head
grade: 0.33% Co)
-- As known mineralisation is open south-west and down dip from
the pit shell, there is significant potential to build on the
preliminary findings and progress a mining license once a strategic
development partner is secured
-- Further, there are over 20 incremental copper, gold, lead,
and zinc prospects across the NWQ Copper Project that are highly
prospective for copper mineralisation which potentially provide the
foundations for developing a series of satellite deposits
Ged Hall, Chairman of Castillo Copper, said: "The Board is
delighted with the findings from Entech's preliminary pit
optimisation study, as it provides significant confidence a
standalone mining operation can potentially be developed at Big One
Deposit. More importantly, the Board believes the study's insights
will be key to securing a strategic partner to progress critical
development work moving forward."
PIT OPTIMISATION: A$28M NPV
The focus of the study was on the near-surface component of
known mineralisation based on the Inferred MRE at 2.1Mt at 1.1% Cu
for 21,886t(2) copper metal.
FIGURE 1: OPTIMISATION OUTCOMES - ULTIMATE PIT
Mining Diluted & Recovered Material Units Total/Av
=========
Tonnes
Waste t 567,427
========= =====================
Ore t 441,998
========= =====================
Total t 1,009,425
========= =====================
Strip ratio 1:n 1.3
========= =====================
Grade
Copper % 1.42
========= =====================
Silver g/t 0.31
========= =====================
Cobalt % 0.33
========= =====================
Metal
Copper t 6,266
========= =====================
Silver oz 4,362
========= =====================
Cobalt t 1,469
========= =====================
SUMMARY
Cost
Mining $m 4.3
========= =====================
Processing $m 14.1
========= =====================
Rate
Mining $/t ore 9.78
========= =====================
Processing $/t ore 31.8
========= =====================
Insitu Physicals
Tonnes t 441,998
========= =====================
Cu Grade % 1.42
========= =====================
Ag Grade g/t 0.31
========= =====================
Co Grade % 0.33
========= =====================
Source: Entech Group
^ Cautionary Statement:
The study referred to in this RNS announcement is conceptual in
nature. It is a preliminary technical study to assess the potential
for open pit base and precious metal mining and to assist in
determining the likely size and depth of open pit mining. It is
based on only JORC 2012 Inferred Resources. The study is
preliminary in nature and not intended as a Feasibility Study. It
should be understood by the reader that this announcement reports
on preliminary outcomes of early-stage open pit optimisation works
on the Big One deposit. It does not account for the capital costs
of infrastructure such as power stations, access roads, dewatering,
processing infrastructure, offices, camps etc, nor considers
hydrogeology or geotechnical issues.
KEY FINDINGS
As shown in Figure 1 above, initially the optimised pit shell
could potentially deliver up to up to 6,266t copper (head grade:
1.42% Cu), 4,362oz silver (head grade: 0.31 g/t Ag) and 1,469t
cobalt (head grade: 0.33% Co). However, this is only a starting
point, as with known mineralisation open south-west and down dip it
can potentially be built upon with further development work.
The Board is optimistic these initial findings provide
significant confidence a standalone mining operation can eventually
be developed once a strategic development partner is secured.
Incrementally, there are circa 20 known prospects across the NWQ
Copper Project highly prospective for copper, gold, lead, and zinc
mineralisation, which potentially provide the foundations for
developing a series of satellite deposits. (Note: The NWQ Copper
Project has secured "project status" with the Queensland Department
of Resources (PROJ-0221) which comprises EPMs 26462, 26513, 26525,
26574, and 27440.)
METHODOLGY
In undertaking the open pit optimisation study, Castillo and
Entech agreed the input assumptions summarised in Figures 2, 3 and
4.
FIGURE 2: OPTIMISATION INPUT ASSUMPTIONS
PROCESSING COSTS & ASSUMPTIONS
Commodity Price: A$/t 13,024
======================== =======================
Commodity Price: A$/g 1.22
======================== =======================
Commodity Price: A$/t 51,515
======================== =======================
Commodity Price - A$/t (including Royalty
calculated: & Payability) 10,158
======================== =======================
Commodity Price - A$/g (including Royalty
calculated: & Payability) 0.59
======================== =======================
Commodity Price - A$/t (including Royalty
calculated: & Payability) 25,114
======================== =======================
State Royalty: 0
=======================
Processing Rate: tpa 500,000
======================== =======================
Processing Cost Oxide: $/t ore 30
======================== =======================
Processing Cost Fresh: $/t ore 30
======================== =======================
Grade Control Costs: $/t ore 30
======================== =======================
Concentrate Grade: Cu 15%
======================== =======================
Moisture Content: 8%
=======================
Concentrate Costs: $/wmt 15
======================== =======================
Annual Discounting:
========== ========================= =======================
Payability (Cu) 80%
=======================
Payability (Ag) 50%
=======================
Payability (Co) 50%
=======================
Processing recovery:
========== ========================= =======================
Cu Oxide 70%
===================================== ======================== =======================
Cu Fresh 88%
===================================== ======================== =======================
Ag Oxide 50%
===================================== ======================== =======================
AG Fresh 50%
===================================== ======================== =======================
Co Oxide 95%
===================================== ======================== =======================
Co Fresh 95%
===================================== ======================== =======================
Source: Entech Group
FIGURE 3: LOAD AND HAUL RATES PER BENCH
Unit Load & Haul Rates: Ore Waste
===========
Bench 1 $/bcm 9.23 8.58
========== =========== ===========
Bench 2 $/bcm 9.40 8.60
========== =========== ===========
Bench 3 $/bcm 9.57 8.62
========== =========== ===========
Bench 4 $/bcm 9.75 8.95
========== =========== ===========
Bench 5 $/bcm 9.92 9.03
========== =========== ===========
Bench 6 $/bcm 10.10 9.48
========== =========== ===========
Bench 7 $/bcm 10.27 9.49
========== =========== ===========
Bench 8 $/bcm 10.45 9.53
========== =========== ===========
Bench 9 $/bcm 10.62 9.64
========== =========== ===========
Bench 10 $/bcm 10.80 9.81
========== =========== ===========
Bench 11 $/bcm 10.97 10.04
========== =========== ===========
Bench 12 $/bcm 11.15 10.08
========== =========== ===========
Bench 13 $/bcm 11.32 10.12
========== =========== ===========
Bench 14 $/bcm 11.40 10.24
========== =========== ===========
Bench 15 $/bcm 11.44 10.24
========== =========== ===========
Bench 16 $/bcm 11.45 10.42
========== =========== ===========
Bench 17 $/bcm 11.47 10.43
========== =========== ===========
Bench 18 $/bcm 11.86 10.86
========== =========== ===========
Bench 19 $/bcm 11.92 10.88
========== =========== ===========
Bench 20 $/bcm 11.95 10.91
========== =========== ===========
Bench 21 $/bcm 11.89 10.94
========== =========== ===========
Bench 22 $/bcm 12.06 10.99
========== =========== ===========
Bench 23 $/bcm 12.05 11.01
========== =========== ===========
Bench 24 $/bcm 12.05 11.04
========== =========== ===========
Bench 25+ $/bcm 12.16 11.09
========== =========== ===========
Source: Entech Group
FIGURE 4: DRILL AND BLAST RATES PER MATERIAL TYPE
Unit Drill & Blast Rates: Ore Waste
===========
Bench 1 - Oxide $/bcm 9.23 8.58
======== =========== ===========
Bench 2 - Fresh $/bcm 9.40 8.60
======== =========== ===========
Source: Entech Group
Items considered part of the open pit optimisation include the
following:
-- Load and haul rates per bench RL ($/bcm mined)
-- Drill and blast rates per material type ($/bcm mined)
-- Processing costs ($/t ore):
o This included coast allocations for grade control
-- Processing (metallurgical) recoveries (%)
-- Metal payabilities (%)
Items that were not considered to be a part of the open pit
optimisation include the following:
-- Upfront Capital:
o Power Stations, Access Roads, Dewatering, Processing
Infrastructure, Offices/Camps etc
-- Hydrology (No studies available)
-- Geotechnical Guidance (No studies available)
RESULTS
Open pit optimisation is a process of selecting the most
profitable open pit shell that matches a group's risk profile. Risk
can be managed using a variety of methods, such as using a
conservative commodity price, increasing the profit margin or by
selecting a smaller pit than the one that generates the maximum
value.
Despite optimisation results generating larger NPV pit shells,
by applying this selection criterion, so long as a sufficient mill
feed can be maintained, then a more generous monthly net cash flow
can be maintained.
Figure 5 graphically illustrates the outcomes for the nested pit
shells resulting from the assessment of the open pit optimisation
(see Figures 6 and 7 for a cross-section and plan view). The open
pit optimisation was run at an input copper price of
A$13,024/t.
FIGURE 5: OPTIMISATION OUTPUTS
Source: Entech Group
FIGURE 6: SECTION THROUGH RF 1 SHELL FOR THE BIG ONE
OPTIMISATION
Note: Resource model filtered to NSR>10
Source: Entech Group
FIGURE 7: PLANVIEW OF RF 1 SHELL FOR THE BIG ONE
OPTIMISATION
Note: Resource model filtered to NSR>10
Source: Entech Group
For further information, please contact:
Castillo Copper Limited +61 8 6558 0886
Dr Dennis Jensen (Australia), Managing Director
Gerrard Hall (UK), Chairman
SI Capital Limited (Financial Adviser and
Corporate Broker) +44 (0)1483 413500
Nick Emerson
Gracechurch Group (Financial PR) +44 (0)20 4582 3500
Harry Chathli, Alexis Gore, Henry Gamble
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:
-- A large footprint 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 and platinoids.
-- 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's Statement
The information in this report that relates to Exploration
Results for "BHA Project, East Zone" is based on information
compiled or reviewed by Mr Mark Biggs. Mr Biggs is a 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. Further, Mr Biggs consents
to the inclusion in this report of the matters based on information
in the form and context in which it appears.
References
1) Entech Mining. Available at: https://entechmining.com.au
2) CCZ ASX Release - 28 February 2022
APPIX A: NWQ COPPER PROJECT
FIGURE A1 NWQ COPPER PROJECT RELATIVE TO PEERS
Source : CCZ geology team
FIGURE A2: PROSPECTS WITHIN NWQ COPPER PROSPECT
Source: CCZ geology team
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