REG - Castillo Copper Ltd - December 2021 Quarterly Activities Report
31/01/2022 12:30
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RNS Number : 1769A Castillo Copper Limited 31 January 2022
31 January 2022
CASTILLO COPPER LIMITED
("Castillo", "CCZ" or the "Company")
December 2021 Quarterly Activities Report
Castillo Copper Limited (LSE and ASX: CCZ), a base metal explorer primarily
focused on copper across Australia and Zambia, is pleased to present
shareholders its latest quarterly report for the period 1 October to 31
December 2021. An overview of key events follows:
HIGHLIGHTS
NWQ Copper Project
· Inaugural drilling campaign at the Arya Prospect completed
· Plans to geologically model a JORC 2012 compliant resource at the Big
One Deposit
Zambia Projects
· Post-IP survey, 14 targets for test drilling identified at the
Luanshya Project
· Work on IP survey at Mkushi Project progressing
DEVLOPMENT WORK
During the period, most of the focus remained on advancing the NWQ Copper
Project in Queensland's copper-belt and undertaking geophysical work on the
Launshya and Mkushi properties in Zambia.
NWQ COPPER PROJECT, MT ISA COPPER-BELT
Big One Deposit
On 5 October 2021, CCZ announced that assays for the first four drill-holes of
the second drilling campaign extended known mineralisation at the Big One
Deposit, as they were proximal to the dacite dyke, with the best intercepts
comprising:
· 9m @ 1.42% Cu from 88m including 4m @ 3.06% Cu from 92m & 1m @
9.19% Cu from 92m (BO_317RC)(1)
· 5m @ 1.06% Cu from 141m (BO_316RC)(1)
· 16m @ 0.59% Cu from 166m including 3m @ 1.76% Cu from 176m
(BO_318RC)(1)
· 3m @ 1.22% Cu from 65m (BO_315RC)(1)
The third drilling campaign at the Big One Deposit, comprising at least 22
drill-holes, will target several prime areas including the sizeable bedrock
conductor on the north side of the dacite dyke. Significantly, the geophysical
characteristics of the northern bedrock conductor are identical to the known
system prevalent along the line of lode(1).
On 30 November 2021, CCZ announced that based on fresh insights, post the
chief geological consultant visiting the Big One Deposit, the Board has
prioritised geologically modelling an inaugural JORC compliant resource plus a
third infill drilling campaign.
There are several reasons including:
1) Recent and historical drilling campaigns have intersected relatively
shallow copper mineralisation; and
2) There is a significant bedrock conductor, north of the line of lode,
which is larger and of different character than the Induced Polarisation (IP)
anomaly drilled in 2020, that is yet to be drill-tested(1).
Arya Prospect
On 18 October 2021, CCZ advised the inaugural drilling campaign at the Arya
Prospect commenced, after a massive logistical effort to prepare the
drill-pads then heli-lift the rig and all supporting equipment to site. After
reconciling the geochemical and geophysical data, the Board decided to
orchestrate a strategic "proof of concept" campaign, comprising five initial
RC drill-holes(1).
On 9 November 2021, in an operational update, CCZ announced that due to the
diligent efforts of the team, pioneer drilling had progressed at the Arya
Prospect, overcoming challenging operational conditions.
Encouragingly, it was noted that interest in the Mt Isa copper-belt continues
to grow, with Rio Tinto recently acquiring contiguous ground on the eastern
boundary of the NWQ Copper Project which is proximal to the Arya Prospect(1).
On 17 November 2021, CCZ announced that three drill-holes had been completed
from two drill pads, with standout, AR_002RC, reaching a depth of 238m.
Notably, around 200m of dark grey and black carbonaceous siltstone / schist
was intersected, with scattered base-metal sulphides, fine-grained graphite
mineralisation occurrences and remaining open at depth.
Encouragingly, visible but scattered chalcopyrite (copper sulphide
mineralisation) was observed in drill-hole AR_001RC(1).
On 6 December 2021, CCZ announced the drilling campaign at the Arya Prospect
had concluded, with five drill-holes completed and all samples having been
despatched to the laboratory for analysis.
Based on indicative field observations from the team at site, the Board is
optimistic that geological interpretations will affirm the exploration
potential of the Arya Prospect. If this is validated, then a fuller drilling
campaign will potentially be commissioned in 1H 2022(1).
LUANSHYA AND MKUSHI PROJECTS, ZAMBIA COPPER-BELT
On 25 October 2021, CCZ announced that up to 14 drill targets were identified
at the Luanshya Project. Notably, the 14 chargeable zones were identified post
an Induced Polarisation (IP) survey - within a 6km zone of copper surface
anomalism(1).
Modelling was undertaken by CCZ's consultant geophysicist, who interpreted the
IP survey results that covered the 6km long soil anomaly, which were defined
after extensive soil sampling campaigns(1).
On 17 November 2021, in an operational update, CCZ announced the geology team
is now focused on formulating an inaugural drilling campaign for the Luanshya
Project.
Meanwhile, work on the IP survey at the Mkushi Project, which is focusing on
known surface copper anomalies, is now in progress. Upon completion, a
geophysical interpretation report will be published which will determine the
next course of action.
NEW SOUTH WALES ASSETS
· Broken Hill Alliance Group - Work is continuing to ready Broken Hill
Alliance Group - which has a significant tenure around the world-class Broken
Hill zinc-silver-lead deposit - for an IPO in 1Q 2022, subject to securing all
key regulatory approvals.
· Cangai Copper Mine - No material work was undertaken during the
review period.
CORPORATE
· Notice of AGM and results - On 29 October 2021, CCZ announced the AGM
would be held on 30 November 2021 with six resolutions to be presented to
shareholders. Subsequently, on 30 November 2021, CCZ announced that all
resolutions were passed.
PAYMENTS TO, OR TO AN ASSOCIATE OF, A RELATED PARTY OF THE ENTITY DURING THE
QUARTER
$116,000 was paid to related parties of the Company relating to executive
director salary and non-executive director fees.
SUMMARY OF THE EXPLORATION EXPENDITURE INCURRED DURNG THE QUARTER
Consulting fees Rates and mines departments fees
Cangai $7,000 -
Broken Hill Alliance $5,000 -
Mt Isa $2,457,000 -
Zambia $40,000 -
Total $2,509,000 -
In addition to this release, a PDF version with supplementary information and
images can be found on the Company's website:
https://castillocopper.com/investors/announcements/
(https://castillocopper.com/investors/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
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.
· 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."
References
1) Note - All information referenced is from CCZ ASX Releases, as
dated in text, from 1 October 2021 to 28 January 2022 inclusive
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.
The information in this announcement that relates to exploration results is
based on and fairly represents information reviewed or compiled by Mr Matt
Bull, a Competent Person who is a Member of the Australasian Institute of
Mining and Metallurgy. Mr Bull is a beneficiary of Southern River Investments,
a trust which is a shareholder of Castillo Copper Limited. Mr Bull is a
shareholder and director of Trilogy Metals Pty Ltd, a company which provides
ad hoc geological consultancy services to Castillo Copper Limited. Mr Bull is
a Consultant of Castillo Copper Limited. Mr Bull has sufficient experience
that is relevant to the styles of mineralisation and types of deposit under
consideration and to the activity being undertaken to qualify as a Competent
Person as defined in the 2012 Edition of the "Australasian Code for Reporting
of Exploration Results, Mineral Resources and Ore Reserves". Mr Bull has
provided his prior written consent to the inclusion in this announcement of
the matters based on information in the form and context in which it appears.
The information in this report that relates to Exploration Results for
"Litchfield" and "Picasso" is based on information compiled or reviewed by Mr
Geoffrey Reed, a Non- Executive Director of CCZ. Mr Reed is both a shareholder
and director of Bluespoint Mining Services, a company which is a shareholder
of Castillo Copper Limited. Bluespoint Mining Services provides ad hoc
geological consultancy services to Castillo Copper Limited. Mr Reed is a
member of the Australian Institute of Mining and Metallurgy (CP) (member
#250422) 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 Reed is a member
of the Australian Institute of Geoscientists. Further, Mr Reed consents to the
inclusion in this report of the matters based on information in the form and
context in which it appears. Mr Reed has not verified any of the information
regarding any of the properties or projects referred to herein other than the
"Litchfield" and "Picasso" Properties.
APPENDIX 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 - 100% 100%
EL 8435 - 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% 100%
ZAMBIA
Project Tenement ID Ownership at start of Quarter Ownership at end of Quarter Change during the 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 - - -
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
Appendix 5B
Mining exploration entity or oil and gas exploration entity
quarterly cash flow report
Name of entity
Castillo Copper Ltd
ABN Quarter ended ("current quarter")
52 137 606 476 31 December 2021
Consolidated statement of cash flows Current quarter Year to date (6 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 (235) (753)
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)
1.9 Net cash from / (used in) operating activities (235) (753)
2. Cash flows from investing activities
2.1 Payments to acquire or for:
(a) entities
(b) tenements
(c) property, plant and equipment
(d) exploration & evaluation (2,509) (4,043)
(e) investments (26) (76)
(f) other non-current assets - (36)
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)
2.6 Net cash from / (used in) investing activities (2,535) (4,155)
3. Cash flows from financing activities 14 1,756
3.1 Proceeds from issues of equity securities (excluding convertible debt
securities)
3.2 Proceeds from issue of convertible debt securities
3.3 Proceeds from exercise of options
3.4 Transaction costs related to issues of equity securities or convertible debt (13) (249)
securities
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)* 80 80
3.10 Net cash from / (used in) financing activities 81 1,587
*Relates to seed capital applications received by CCZ subsidiary, Broken Hill
Alliance Ltd
4. Net increase / (decrease) in cash and cash equivalents for the period
4.1 Cash and cash equivalents at beginning of period 10,260 10,854
4.2 Net cash from / (used in) operating activities (item 1.9 above) (235) (753)
4.3 Net cash from / (used in) investing activities (item 2.6 above) (2,535) (4,155)
4.4 Net cash from / (used in) financing activities (item 3.10 above) 81 1,587
4.5 Effect of movement in exchange rates on cash held (7) 31
4.6 Cash and cash equivalents at end of period 7,564 7,564
5. Reconciliation of cash and cash equivalents Current quarter Previous quarter
at the end of the quarter (as shown in the consolidated statement of cash flows) to the related items in the accounts
$A'000
$A'000
5.1 Bank balances 7,564 10,260
5.2 Call deposits
5.3 Bank overdrafts
5.4 Other (provide details)
5.5 Cash and cash equivalents at end of quarter (should equal item 4.6 above) 7,564 10,260
6. Payments to related parties of the entity and their associates Current quarter
$A'000
6.1 Aggregate amount of payments to related parties and their associates included 78
in item 1
6.2 Aggregate amount of payments to related parties and their associates included 38
in item 2
Note: if any amounts are shown in items 6.1 or 6.2, your quarterly activity
report must include a description of, and an explanation for, such payments.
7. Financing facilities Total facility amount at quarter end Amount drawn at quarter end
Note: the term "facility' includes all forms of financing arrangements available to the entity.
$A'000
$A'000
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 activities $A'000
8.1 Net cash from / (used in) operating activities (item 1.9) (235)
8.2 (Payments for exploration & evaluation classified as investing activities) (2,509)
(item 2.1(d))
8.3 Total relevant outgoings (item 8.1 + item 8.2) (2,744)
8.4 Cash and cash equivalents at quarter end (item 4.6) 7,564
8.5 Unused finance facilities available at quarter end (item 7.5)
8.6 Total available funding (item 8.4 + item 8.5) 7,564
8.7 Estimated quarters of funding available (item 8.6 divided by item 8.3) 2.8
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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: 31 January 2022
Authorised by: The Board of Castillo Copper Ltd
(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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