REG - Castillo Copper Ltd - Sale of Two Broken Hill Exploration Licences

Castillo CopperAnnouncement

11/01/2024 07:00

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RNS Number : 3784Z  Castillo Copper Limited  11 January 2024

11 January 2024

 

CASTILLO COPPER LIMITED

("Castillo" or the "Company")

 

Sale of Two Broken Hill Exploration Licences

 

Castillo Copper Limited (LSE and ASX: CCZ), a base metal explorer primarily
focused on copper across Australia and Zambia, announces that it has agreed
the sale of two of its 100% owned Exploration Licences, EL 8572 and EL 8599,
at the Broken Hill Project ("Broken Hill"), to Rimfire Pacific Mining LTD
("Rimfire")(ASX:RIM).

 

Highlights

 

      ·    Castillo to complete the sale of two of its 100% owned
Exploration Licences at Broken Hill, EL 8572 and EL 8599, to Rimfire

·    Under the terms of the agreement, Rimfire will issue Castillo with
8,064,516 Rimfire Ordinary Shares ("Consideration Shares") being $150,000
worth of shares at an issue price of $0.0186 ("Consideration Shares Issue
Price")

·    Rimfire to issue a further $150,000 worth of Rimfire Ordinary Shares
("Subsequent Shares") to Castillo Copper if at any time after Completion,
Rimfire's share price 5-day Volume Weighted Average Price ("VWAP") is greater
than $0.0279, which is 50% above the Consideration Shares Issue Price
("Subsequent Shares Issue Price")

·    The Board believes that this is an excellent outcome for all
stakeholders, allowing Castillo to focus on the development of its core
portfolio, whilst simultaneously ensuring it accrues the benefits of the
development potential at EL 8572 and EL 8599 through the Consideration Shares
received

·    Castillo still holds Exploration Licences EL 8434 and EL 8435 at
Broken Hill

 

Ged Hall, Chairman of Castillo Copper, said: "We are pleased to have agreed
what the Board views as a mutually beneficial agreement to sell two of our
exploration licences at Broken Hill to Rimfire. Following the Strategic Review
we completed late last year, the Company is streamlining its portfolio of
high-quality assets and focusing on those it deems as core, which the Board
believes will allow Castillo to most optimally generate value for
shareholders. This agreement will allow Castillo to focus on the development
of our portfolio of assets, while still retaining interest in the Broken Hill
Project."

 

Details of Agreement

 

Rimfire will acquire the Castillo tenements on the following terms:

 

·    Rimfire to issue Castillo Copper with 8,064,516 Rimfire Ordinary
Shares being $150,000 worth of shares at an issue price of $0.0186. The issue
price is the 5-day VWAP up to and including the last day of trading
immediately before the date of execution of the Tenement Purchase Agreement;
and

·    Rimfire to issue a further $150,000 worth of Rimfire Ordinary Shares
to Castillo Copper if at any time after Completion Rimfire's share price 5-day
VWAP is greater than $0.0279, which is 50% above the Consideration Shares
Issue Price. The Subsequent Shares to be issued would be at the Subsequent
Shares Issue Price, resulting in the issue of 5,376,345 Rimfire Ordinary
Shares if the Subsequent Shares Issue Price is met.

 

All Consideration Shares and Subsequent Shares are subject to a 6-month escrow
period.

 

The Castillo tenements are subject to historic royalties of a 3% Net Smelter
Return (EL8599) and a 1% Net Smelter Return (EL8572).

 

In return for the waiving of all Royalties, Rimfire has agreed to issue the
individual Royalty holders with 5,376,337 Rimfire Ordinary Shares being
$100,000 worth of shares at the Consideration Shares Issue Price $0.0186
(Royalty Holder Shares).

 

All Royalty Holder Shares are subject to a 6-month escrow period.

 

At the time of writing, Rimfire, Castillo Copper and the Royalty Holders are
completing all necessary ancillary legal documentation, and the transaction is
still subject to standard regulatory conditions such as Ministerial consent
for the transfer of the tenements.

 

The Consideration Shares, Subsequent Shares and Royalty Holder Shares will be
issued under Rimfire's ASX Listing Rule 7.1 capacity.

 

Overview

 

BHA No.1 Pty Ltd, a wholly owned subsidiary of Castillo Copper Ltd (ASX: CCZ),
has executed an agreement with Rimfire to sale an unencumbered 100% of their
Exploration Licences EL 8572 and EL 8599 ("Castillo tenements") which lie
adjacent to, and contain the same host rocks as that found at Rimfire's Bald
Hill Cobalt prospect, 30 kilometres west of Broken Hill, NSW.

 

Diamond drilling by Rimfire at Bald Hill last year successfully intersected
high-grade cobalt (Co) associated with strongly disseminated to semi-massive
sulphide (pyrite, pyrrhotite and trace chalcopyrite + sphalerite)
mineralisation (See Rimfire ASX Announcement dated 18 September 2023),
including;

 

·    125m @ 0.13% Co from 198 metres in FI2470 including 97m @ 0.15% Co,

·    58m @ 0.13% Co from 62 metres in FI2471 including 2m @ 0.24% Co and
17m @ 0.15% Co,

·    33m @ 0.11% Co from 58 metres including 4m @ 0.23% Co and 2m @ 0.21%
Co, and

·    100m @ 0.08% Co from 71 metres in FI2470 including 68m @ 0.10% Co.

 

The Castillo tenements cover the same sequence of Proterozoic age deformed and
metamorphosed gneiss, psammite, and amphibolite units that host the Bald Hill
cobalt sulphide mineralisation and as such are considered prospective for:

 

·    Bald Hill style cobalt sulphide mineralisation hosted within quartz -
albite - magnetite gneiss and psammopelitic composite gneiss; and

·    Bedrock Rare Earth Element ("REEs") mineralisation associated with
shear - hosted pegmatite occurrences.

 

An examination of the NSW Government Minview online GIS portal reveals several
historic mineral occurrences that require follow up to better determine their
geological significance and exploration potential.

 

Of initial interest are a cluster of gossanous, quartz veined and
copper-stained occurrences within the northwestern portion of EL8572 (NSW
Mineral Occurrences 181678, 181681, 181683 - 181684, 181686, and 181688) and
multiple shear - hosted davidite - bearing pegmatite occurrences within the
southern portion of EL8572 and EL8599 (NSW Mineral Occurrences 181344 -
181348). Davidite is a rare earth oxide
(https://en.wikipedia.org/wiki/Oxide)  mineral with chemical end members of
either (https://en.wikipedia.org/wiki/Lanthanum) Lanthanum or
(https://en.wikipedia.org/wiki/Cerium) Cerium.

 

In conjunction with ongoing fieldwork in the Bald Hill area, Rimfire will
shortly commence field reconnaissance of the Castillo tenements to determine
exploration priorities for future work programs at Broken Hill.

 

For further information, please contact:

 

 Castillo Copper Limited                                             +61 8 6558 0886 
 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." 

 

 

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