For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20230713:nRSM8558Fa&default-theme=true
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 - calculated: A$/t (including Royalty & Payability) 10,158
Commodity Price - calculated: A$/g (including Royalty & Payability) 0.59
Commodity Price - calculated: A$/t (including Royalty & 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
APPENDIX 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
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
or visit
www.rns.com (http://www.rns.com/)
.
RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
. END MSCFZGMNRZVGFZM