REG - Castillo Copper Ltd - September 2023 Quarterly Activities Report
30/10/2023 07:15
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RNS Number : 6201R Castillo Copper Limited 30 October 2023
30 October 2023
CASTILLO COPPER LIMITED
("Castillo", or the "Company")
September 2023 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 July 2023 to 30
September 2023.
HIGHLIGHTS:
Cangai copper mine
· Updated JORC (2012) compliant Mineral Resource Estimate for Cangai
Copper Mine at 4.4Mt @ 2.5% Cu inferred insitu and 0.2Mt @ 1.35% Cu indicated
from historic stockpiles for ~114kt contained copper metal; augmented further
by zinc, gold, and silver credits(1)
INTERIM EXECUTIVE DIRECTOR APPOINTMENT
· Post the review period, the Board appointed Mr Jack Sedgwick as
interim Executive Director
· Mr Sedgwick's mandate is to undertake an asset review of the current
portfolio, re-shape priorities then update the group's strategic intent
ACTIVITIES REPORT
An overview of key events follows:
DEVELOPMENT WORK
Castillo has four properties comprising the NWQ Copper Project in Mt Isa's
copper-belt in Queensland, the BHA Project near Broken Hill's world class
silver-zinc-lead deposit in NSW, the historic Cangai Copper Mine in NSW and
several assets across Zambia's copper-belt.
CANGAI COPPER MINE, NSW
On 25 July 2023, Castillo's geology team, working in conjunction with a
specialist geological consultancy, produced an updated JORC (2012) compliant
Mineral Resource Estimate (MRE) for the Cangai Copper Mine at:
· 4.4Mt @ 2.5% Cu inferred insitu and 0.2Mt @ 1.35% Cu indicated from
historic stockpiles for ~114kt contained copper metal; augmented further by
zinc, gold, and silver credits (Table 1)(1).
Table 1: Cangai Copper Mine Resource Tonnages
Category Inferred Mass (T) Cu (%) Co (%) Zn (%) Au (g/t) Ag (g/t) Cu (T) Co (T) Zn (T) Au (Kg) Ag (Kg)
Oxide Insitu 634,000 2.65 0.01 0.65 0.15 16.1 16,801 63 4,121 95 10,207
Fresh 3,773,000 2.48 0.01 0.55 0.31 15.2 93,570 226 20,752 1,170 57,350
Ex-Mine Oxide Dumps 29,000 2.10 0.02 0.3 0.58 14.5 609 5 87 17 421
Total 4,436,000 2.5 0.01 0.6 0.29 15.3 110,980 294 24,960 1,282 67,978
Historic Stockpiles
Category Indicated Mass (T) Cu (%) Co (%) Zn (%) Au (g/t) Ag (g/t) Cu (T) Co (T) Zn (T) Au (Kg) Ag (Kg)
Smelter Slag and Ex-Mine Oxide Dumps 199,000 1.35 0.02 1.9 0.1 4.6 2,687 48 3,781 20 915
Total 199,000 1.35 0.02 1.9 0.1 4.6 2,687 48 3,781 20 915
Total 4,635,000 2.45 0.01 0.6 0.28 14.9 113,667 342 28,741 1,301 68,893
Notes:
1. All resource tonnages rounded to the nearest 1,000 tonnes
2. Refer to JORC Table 1 for details on data and estimation
3. Insitu tonnages calculated as a guide only, no recovery
factor, loss or dilution considered
Source: CCZ Geology Team
In calculating the updated MRE from the 2017 work (MRE: 3.3Mt @ 3.35% Cu for
108,000t(4)), the geology team factored in reverse circulation and diamond
core drilling campaigns undertaken across 2017-18 and used more conservative
assumptions to boost the confidence in the revised 2023 MRE. The geology team
noted several encouraging observations that underpins significant exploration
potential for the Cangai Copper Mine, including:
· The underlying orebody - which commences from surface - is not fully
defined, as it remains open to the east, south-east and down dip.
· There are several sizeable downhole electromagnetic (DHEM)
conductors, proximal to the line of lode, that can potentially extend known
mineralisation along strike.
· With the revised 2023 MRE enhancing the Cangai Copper Mine's resource
size, the Board is highly optimistic Castillo can realise value for
shareholders from this historical producing asset.
Exploration potential
A key positive for the Cangai Copper Mine is the copper orebody commences from
surface. More encouragingly, the full extent of the underlying copper orebody
remains undetermined, as it remains open to the east, south-east and down
dip. As shown in Figure 1, there are several sizeable DHEM conductors(1),
which are north and south of the line of lode, that can potentially extend
known mineralisation along strike.
Figure 1: DHEM conductors at Cangai Copper Mine
POST PERIOD EVENT
On 9 October 2023, the Board announced the appointment of Mr Jack Sedgwick as
interim Executive Director(2), following the departure of former Managing
Director, Dr Dennis Jensen. Mr Sedgwick's mandate is to undertake a thorough
asset review, re-shape priorities then update the group's strategic intent(3).
PAYMENTS TO, OR TO AN ASSOCIATE OF, A RELATED PARTY OF THE ENTITY DURING
QUARTER DURING THE QUARTER
$172,000 was paid to related parties of Castillo relating to executive
director salary and non-executive director fees.
Table 2: Summary of the exploration expenditure incurred during the quarter
Asset Consulting fees Rates and mines departments fees
Cangai $164,000 $10,000
Broken Hill Alliance $75,000 $15,000
Mt Isa $28,000 $16,000
Zambia $18,000 -
Total $285,000 $41,000
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."
References
1) Updated Mineral Resource Estimate for
Cangai Copper Mine announcement 25 July 2023
2) Board Changes announcement 10 October
2023
3) Strategic Asset Portfolio Review
Underway announcement 17 October 2023
4) High-grade JORC Inferred Resource at
Cangai Copper Mine Exceeds Expectations announcement 6 September 2017
APPENDIX A: Key PROJECTS
Figure 2: West and East Zone - BHA Project, Broken Hill Region (Source: CCZ
Geology Team)
Figure 3: Zambia Copper-Belt Projects (Source: CCZ Geology Team)
Figure 4: NWQ Copper Project, Mt Isa Region (Source: CCZ Geology Team)
APPENDIX B: Interest in mining tenements held
Table 3: 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% -
Table 4: Broken Hill, located within a 20km radius of Broken Hill in 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% -
Table 5: Mt Oxide, Mt Isa region in North West 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% -
Table 6: Zambia
Tenement ID Ownership at start of Quarter Ownership at end of Quarter Change during the Quarter
24659-HQ-LEL (Mkushi) 100% 100% -
25195-HQ-LEL (Luanshya) 55% 55% -
25273-HQ-LEL (Luanshya) 55% 55% -
25261-HQ-LEL (Mwansa) 100% 100% -
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 September 2023
Consolidated statement of cash flows Current quarter Year to date (3 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 (282) (282)
1.3 Dividends received (see note 3)
1.4 Interest received 8 8
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 (274) (274)
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 (327) (327)
(e) investments
(f) other non-current assets
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 (327) (327)
3. Cash flows from financing activities
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
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 - -
4. Net increase / (decrease) in cash and cash equivalents for the period
4.1 Cash and cash equivalents at beginning of period 2,897 2,897
4.2 Net cash from / (used in) operating activities (item 1.9 above) (274) (274)
4.3 Net cash from / (used in) investing activities (item 2.6 above) (327) (327)
4.4 Net cash from / (used in) financing activities (item 3.10 above) - -
4.5 Effect of movement in exchange rates on cash held (2) (2)
4.6 Cash and cash equivalents at end of period 2,294 2,294
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 1,354 2,805
5.2 Call deposits 940 92
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) 2,294 2,897
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 59(1)
in item 1
6.2 Aggregate amount of payments to related parties and their associates included 113(2)
in item 2
(1)Comprises director's fees for the quarter.
(2)Comprises consulting fees paid to the Managing Director and exploration
expenditure paid to Field Crew Pty Ltd, a related entity of director David
Drakeley.
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) (274)
8.2 (Payments for exploration & evaluation classified as investing activities) (327)
(item 2.1(d))
8.3 Total relevant outgoings (item 8.1 + item 8.2) (601)
8.4 Cash and cash equivalents at quarter end (item 4.6) 2,294
8.5 Unused finance facilities available at quarter end (item 7.5)
8.6 Total available funding (item 8.4 + item 8.5) 2,294
8.7 Estimated quarters of funding available (item 8.6 divided by item 8.3) 3.8
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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: 30 October 2023
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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