REG - Castillo Copper Ltd - June 2022 Quarterly Activities Report
22/07/2022 07:00
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RNS Number : 3719T Castillo Copper Limited 22 July 2022
22 July 2022
CASTILLO COPPER LIMITED
("Castillo", "CCZ" or the "Company")
June 2022 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 April to 30 June
2022. During the period, most of the focus remained on developing the cobalt
potential at the East Zone, BHA Project in Broken Hill and successfully
negotiating an option to sell the Zambia Projects.
HIGHLIGHTS
· EAST ZONE, BHA PROJECT
o Maiden Mineral Resource Estimate ("MRE") to the JORC (2012) Code for BHA
Project's East Zone is 64Mt @ 318 ppm Co for 21,556t contained metal at
relatively shallow depths(1)
o Further, the global MRE includes 44,260t of contained copper (63Mt @ 0.07%
Cu)(1)
· ZAMBIA
o London-based, Hyperion Copper, granted a 12-month option to acquire
100%-owned subsidiary, Zed Copper ("Zed"), which owns four assets in Zambia's
copper-belt including the prime Luanshya and Mkushi Projects(1)
o Hyperion Copper paid a non-refundable US$100,000 fee (~A$142,000) for the
exclusive option and, if exercised, will issue £2.25m (~A$4m) in Hyperion
shares to acquire 100% of the issued capital of Zed(1)
o Further, Castillo will receive £1.5m (~A$2.7m) in Hyperion shares upon a
global MRE of 200,000t contained copper metal being delineated(1)
DEVLOPMENT WORK
Castillo has four properties comprising the NWQ Copper Project in Mt Isa's
copper-belt, the BHA Project near Broken Hill's world class silver-zinc-lead
deposit in NSW, the historic Cangai Copper Mine and four assets across
Zambia's copper-belt.
East Zone, BHA Project, NSW
On 13 April 2022, Castillo announced compelling new assays uncovered at the
Fence Gossan and Ziggy's Hill Prospects within the Defined Target Area which
provided incremental evidence there is potentially an extensive cobalt system
apparent within the BHA Project's East Zone(1) (Figure A1, Appendix A).
The new cobalt assays, especially from Fence Gossan, are relatively shallow
(from surface to circa 100m) and include several standout intercepts which
align with earlier results at the Tors & Reef Tank(1) Prospects (Figure 1
& 2).
FIGURE 1: BEST ASSAYED INTERCEPTS - DEFINED TARGET AREA
Prospect Best Intercepts
New - Fence Gossan Prospect: 23m @ 660ppm Co from 28m including
3m @ 1,300ppm Co from 37m (3E49N)
4m @ 925ppm Co from 53m including
2m @ 1,300ppm Co from 55m (3E45N)
4m @ 647ppm Co from 46m including
1m @ 1,700ppm Co from 48m (TT05W10N)
3m @ 620ppm Co from 52m including
1m @ 1,100ppm Co from 54m (TT05W14N)
2m @ 500ppm Co from 7m (TT4W035S)(1)
New - Ziggy's Hill Prospect: 14m @ 262ppm Co from 84m
including
1m @ 600ppm Co from 93m (ZIG01)
6m @ 336ppm Co from 39m (RABZIG097)
7m @ 250ppm Co from 5m (ZH0210W)(1)
Reported - Tors & Reef Tank Prospects: 15m @ 760ppm Co from 67m including
3m @ 1,500ppm Co from 70m (3E51N)
5m @ 1,200ppm Co from 15m (AGSO2740)
10m @ 510ppm Co from 5m including
5m @ 690ppm Co from 10m (AGSO2716)
7m @ 1,600ppm Co from 30m (1800E1180N)
10m @ 520ppm Co from surface (2925E1240S)
5m @ 520ppm Co from 45m (TT05W10N)(1)
Source: CCZ geology team
On 5 May 2022, diamond core assay results for drill-hole BH1 at The Sisters
Prospect confirmed significant cobalt mineralisation, with the best intercept:
· 24m @ 424ppm Co from 103m including 2m @ 1,120ppm Co from 107m; 1m @
873ppm Co from 120m; and 2m @ 486ppm Co from 125m (BH1)(1)
Notably, the new assays are in line with previously reported results from
within the Defined Target Area(1) (Figure 2).
FIGURE 2: DRILL-HOLES & PROSPECTS; EAST ZONE, BHA PROJECT
Source: CCZ geology team
On 1 June 2022, Castillo announced the maiden MRE to the JORC (2012) Code for
BHA Project's East Zone totaled 64Mt @ 318 ppm Co for 21,556t contained cobalt
metal (Figure 3) at relatively shallow depths (0-80m). Furthermore, the global
MRE has 44,260t (64Mt @ 0.07% Cu) of contained copper metal that enhances the
overall result(1).
FIGURE 3: JORC RESOURCE TONNAGES BHA EAST ZONE PROSPECTS
Deposit Prospect Area Mask Model Surface Area Cut-off Inferred Co Cu Contained Cobalt Contained Copper
Ha Ha Co ppm Mt ppm % t t
Fence Gossan 2,335 218 125 22.1 315 0.08 6,962 17,680
Reefs Tank 5,363 2362 180 42.3 345 0.06 14,594 26,580
64.4 318 0.07 21,556 44,260
Notes: (1) Contained content reported is insitu at 100%, no mining assumptions
or dilution yet applied.
Source: CCZ geology team
Moving forward, to extend known cobalt mineralisation, primary targets have
already been factored into an inaugural drilling campaign which the Board
plans to progress. Further, the Board intends to open discussions with
potential off-take partners keen to lock in future cobalt supply chains and
actively participate in the NSW government's critical minerals
initiative(1).
Zambia
On 5 April 2022, an Induced Polarisation survey campaign undertaken at the
Mkushi Project highlighted multiple zones of high chargeability coincident
with known copper soil anomalies.
More significantly, according to the geophysicist's interpretation, these are
potential bodies of disseminated copper sulphide mineralisation and prime
targets to test drill.
On 22 June 2022, in a landmark deal, Castillo announced that it granted
London-based Hyperion Copper a 12-month option to acquire 100%-owned
subsidiary, Zed, which owns four projects in Zambia's copper-belt - including
the prime Luanshya and Mkushi Projects (Figure A2, Appendix A) - for total
consideration of £3.75m (A$6.7m) in a value creating transaction.
The Board believes this is an excellent outcome for all stakeholders since it
secures a strategic partner that is committed to fully develop the exploration
potential of the Zambia projects. Moreover, with Hyperion Copper planning to
list on the LSE's AIM market in H2 2022, Castillo is set to accrue benefits
via retaining its shareholding in Hyperion post listing.
Hyperion is positioning itself as an Africa-focused, copper-gold explorer as
it owns 100% of the Yansse Gold Project in Burkina Faso. Notably, the Yansse
Gold Project is located in the highly prolific West African Birimian Terrane,
which is host to some of the world's largest gold deposits.
CORPORATE
· Board changes: On 1 April 2022, Castillo announced that Mr Ged Hall
(non-executive director based in London) was promoted to Chairman and Dr
Dennis Jensen to Managing Director (from CEO). These promotions follow on post
the retirement of long-standing Chairman, Mr Rob Scott, with effect from 31
March 2022.
· Strategic update: On 7 June 2022, Managing Director Dr Dennis Jensen
summarised Castillo's latest strategy: "The Board's strategic intent is to
create value for shareholders via developing the core projects. With cobalt
remaining over U$$70,000/t, the priority is to extend known mineralisation
across the BHA Project's East & West Zones via targeted drilling campaigns
and formalising a clear path to market. Similarly, with copper above
US$9,000/t, the Board will apply the same formula for the Big One Deposit
within the NWQ Copper Project. Concurrently, the Board intends to align with
development partners to advance the Cangai Copper Mine and four prospective
copper projects in Zambia."
POST-PERIOD EVENT
· Big One Deposit, NWQ Copper Project: On 19 July 2022, preliminary
metallurgical test-work on samples extracted from drill-hole BO_318RC1 at the
Big One Deposit, produced a concentrate with confirmed upgrades ranging from
5x to 10x for copper metal, with the best result: 0.72% Cu head-grade to 7.2%
Cu post-test-work.
PAYMENTS TO, OR TO AN ASSOCIATE OF, A RELATED PARTY OF THE ENTITY DURING THE
QUARTER
During the quarter, $98,000 was paid to related parties of the Company
relating to executive director consulting fees and non-executive director
fees.
SUMMARY OF THE EXPLORATION EXPENDITURE INCURRED DURNG THE QUARTER
Consulting fees Rates and mines departments fees
Cangai $36,000 -
Broken Hill Alliance $141,000 $1,000
Mt Isa $45,000 $26,000
Zambia $15,000 -
Total $237,000 $27,000
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
Dr Dennis Jensen (Australia), Managing Director
Gerrard Hall (UK), Chairman
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 April 2022 to 30 June 2022 inclusive
APPENDIX A: KEY PROJECTS
FIGURE A1: WEST AND EAST ZONE - BHA PROJECT, BROKEN HILL REGION
Source: CCZ geology team
FIGURE A2: ZAMBIA COPPER-BELT PROJECTS
Source: CCZ geology team
FIGURE A3: NWQ COPPER PROJECT, MT ISA REGION
Source: CCZ geology team
Appendix B: 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 C: INTEREST IN EXPLORATION 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 30 June 2022
Consolidated statement of cash flows Current quarter Year to date (12 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 (347) (1,419)
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 (347) (1,419)
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 (264) (5,074)
(e) investments - (25)
(f) other non-current assets - (56)
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)* 145 145
2.6 Net cash from / (used in) investing activities (119) (5,010)
*Relates to option granted to sell Zambia Copper Projects as announced on 22
June 2022
3. Cash flows from financing activities - 1,743
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 - (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) - -
3.10 Net cash from / (used in) financing activities - 1,494
4. Net increase / (decrease) in cash and cash equivalents for the period
4.1 Cash and cash equivalents at beginning of period 6,196 10,854
4.2 Net cash from / (used in) operating activities (item 1.9 above) (347) (1,419)
4.3 Net cash from / (used in) investing activities (item 2.6 above) (119) (5,010)
4.4 Net cash from / (used in) financing activities (item 3.10 above) - 1,494
4.5 Effect of movement in exchange rates on cash held 24 (165)
4.6 Cash and cash equivalents at end of period 5,754 5,754
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 5,754 6,196
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) 5,754 6,196
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 60(1)
in item 1
6.2 Aggregate amount of payments to related parties and their associates included 38(2)
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 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) (347)
8.2 (Payments for exploration & evaluation classified as investing activities) (264)
(item 2.1(d))
8.3 Total relevant outgoings (item 8.1 + item 8.2) (611)
8.4 Cash and cash equivalents at quarter end (item 4.6) 5,754
8.5 Unused finance facilities available at quarter end (item 7.5)
8.6 Total available funding (item 8.4 + item 8.5) 5,754
8.7 Estimated quarters of funding available (item 8.6 divided by item 8.3) 9.4
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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: 22 July 2022
Authorised by: The Board of Directors
(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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