Strategic Sale of Cangai Copper Mine
03/10/2024 07:18
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RNS Number : 8026G Castillo Copper Limited 03 October 2024
3 October 2024
CASTILLO COPPER LIMITED
("Castillo" or the "Company")
Strategic Sale of Cangai Copper Mine to Infinity Mining
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 entered into a conditional agreement with ASX-listed Infinity Mining
Limited (ACN 609 482 180) ("IMI") to sell three granted exploration licences
EL 8625, EL 8635 and EL 8601 in northern New South Wales ("NSW") which host
Cangai Copper Mine ("Cangai Copper Mine tenements").
Highlights:
· Castillo has entered into a conditional agreement to sell three
contiguous tenements which host Cangai Copper Mine in northern New South Wales
to ASX-listed Infinity Mining
· Under the terms of the proposed transaction, which is subject to the
satisfactory completion of due diligence and securing key approvals, Castillo
will receive 40m IMI shares and 20m IMI 5-year options exercisable at $0.07:
o As a result, Castillo is set to become a significant shareholder in IMI
and directly participate in any value created arising from advancing the
Cangai Copper Mine tenements
· The divestment is in line with Castillo's strategic goal to align
with the right development partner to ensure non-core asset portfolio
optimisation, enabling the Board to focus on advancing the core NWQ Copper
Project in the Mt Isa copper-belt, commencing with the Big One Deposit
· This strategy has already proved successful for unlocking value for
shareholders, as Castillo received equity consideration in ASX-listed Rimfire
Pacific Mining NL (ASX: RIM) from selling the BHA West Project in the Broken
Hill region(1)
· With the level of consolidation across the global copper sector
appearing to gain momentum, the Board intends to hold the remaining two
non-core assets - BHA East Project in NSW and Mkushi Copper Project in Zambia
- until the right development partners are secured
Ged Hall, Chairman, commented: "The strategic sale of the Cangai Copper Mine
tenement package to Infinity Mining is an excellent outcome, as it is the
second such transaction which unlocks value this calendar year. Moreover, it
validates the Board's strategy on optimising the non-core asset portfolio and
enables resources to be channelled into developing the core NWQ Copper Project
in the Mr Isa copper-belt. The Board is highly confident Infinity Mining's
team has the capability to fully develop the Cangai Copper Mine tenements
which in turn has the potential to generate material value for stakeholders
given the equity position Castillo will hold post-transaction close."
Key Terms of Transaction
IMI will acquire the Cangai Copper Mine tenements on the following terms:
· Execution of a Formal Sale Agreement on terms consistent with the
agreed Term Sheet;
· IMI receiving firm commitments for a capital raising of not less than
$1 million (before costs);
· Castillo will procure that the holders of the existing royalties over
the Cangai Copper Project (ranging from a 1-3% NSRs) will grant IMI the first
right of refusal to forfeit or assign 100% of the royalty interests in
consideration for the issue of 30,000,000 IMI shares and 15,000,000 IMI
options each exercisable at $0.07 and expiring 5 years from the date of grant;
· IMI and Castillo where required, obtaining all shareholder, statutory
and regulatory approvals and/or waivers required to implement the Sale,
including IMI shareholder approval to issue the Acquisition Shares and
Acquisition Options;
· Issue of 3,000,000 IMI shares to Marshall Custodians as their fee for
introducing and facilitating the acquisition;
· The absence of a material adverse change in relation to the Assets;
and
· All representations and warranties given by the Seller remaining true
and accurate in all material respects; and
· The completion period is 60 days after execution of the Term Sheet.
Upon completion Castillo will be issued:
· 40,000,000 fully paid ordinary shares in the Buyer (Acquisition
Shares); and
· 20,000,000 options to acquire ordinary shares in the Buyer, each
exercisable at $0.07 and expiring 5 years from the date of grant (Acquisition
Options).
Note, at the time of writing, IMI and Castillo still must complete all
necessary ancillary legal documentation, while the transaction is still
subject to standard regulatory conditions apparent in NSW including
ministerial consent to transfer the tenements.
Successfully Unlocking Value from Non-Core Assets
Divesting the Cangai Copper Mine tenements is in line with Castillo's
strategic intent to seek out the right development partner to ensure non-core
asset portfolio optimisation. This is critical since it enables the Board to
focus on advancing the core NWQ Copper Project in the Mt Isa copper-belt,
starting with the Big One Deposit.
This strategy has already proved successful for unlocking value for
shareholders, as Castillo received equity consideration in RIM from selling
the BHA West Project in the Broken Hill region(1). Looking ahead, with the
level of consolidation across the global copper sector appearing to gain
momentum, the Board intends to hold the remaining two non-core assets - BHA
East Project in NSW and Mkushi Copper Project in Zambia - until the right
development partners are identified.
To recap, the key selling points for the two non-core assets are below:
· BHA East Project (NSW): leveraging historical data and data gathered
from the most recent drilling campaign, a JORC compliant inferred MRE was
calculated at 64Mt @ 318 ppm Co for 21,556t contained cobalt metal and 44,260t
of contained copper metal (63Mt @ 0.07% Cu)(2) at relatively shallow depths.
· Mkushi Project (Zambia): a 2022 IP survey highlighted multiple zones
of high chargeability coincident with known copper soil anomalies which are
potential bodies of disseminated copper sulphide mineralisation and are prime
targets to test drill(3).
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
References
1) RIM ASX Release - 21 March 2024
2) CCZ ASX Release - 1 June 2022
3) CCZ ASX Release - 5 April 2022
About Castillo Copper
Castillo Copper Limited is an Australian-based, Australian-focussed copper
exploration Company with a strategy to develop multi-commodity assets that
demonstrate future potential as an economic mining operation.
Through the application of disciplined and structured exploration and
analysis, Castillo Copper has identified assets deemed core to the Company's
sustained growth and is actively progressing these interests up the value
curve.
Current focus will be on advancing exploration activity at the Company's
wholly owned NWQ Project, situated in the copper-belt district approximately
150km north of Mt Isa in north-west Queensland.
Other interests include the Broken Hill Project in western New South Wales and
the Cangai Copper Mine in north-east New South Wales, as well as exploration
targets in Zambia.
Castillo Copper is listed on the LSE and ASX under the ticker "CCZ".
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