REG - Castillo Copper Ltd - June 2024 Quarterly Activities Report
30/07/2024 11:15
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RNS Number : 4084Y Castillo Copper Limited 30 July 2024
30 July 2024
CASTILLO COPPER LIMITED
("Castillo", "CCZ" or the "Company")
June 2024 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 its
latest quarterly report for the period 1 April 2024 to 30 June 2024.
HIGHLIGHTS:
Big One Deposit Surface Sampling Campaign Revealed(1)
· Comprehensive three-day surface sampling campaign devised,
concentrating on eight areas across the Big One Deposit with historical
anomalous surface copper and/or high conductivity zones.
· Campaign was developed with reference to an Induced Polarisation (IP)
survey undertaken by Castillo in 2020, which evidenced:
o Significant incremental copper mineralisation along north-trending fault
structures, rather than within the trachyte dyke, and
o Significant untested bedrock conductor north of the line of lode,
materially larger than the high-grade anomaly drilled in 2020.
Strategic Asset Portfolio Review - Additional Resolutions(2)
· Board committed to advancing the NWQ Copper Project, which has >
20 known prospects, and in the context of a copper bull market.
· Strategic partners being sought to develop remaining assets in NSW
and Zambia.
Cash and Liquid Investments
· Cash on hand at end of quarter totalled $1.118 million.
· Rehabilitation Security Bonds totalled $486,960, of which $172,900 is
expected to be converted to cash within 1 month.
· Castillo holds 13,440,861 Rimfire Pacific Mining Ltd (ASX: RIM)
shares which as at 28 June 2024 had a market value of
~$376,000.
Eduardo Robaina, Non-executive Director, commented: "We're tracking well
against the reinvigorated strategy that was devised by the Board at the end of
2023, where it was unanimously agreed that the Company's focus would
prioritise the development of the NWQ Copper Project. This, in turn, resulted
in the determination that our remaining assets - deemed non-core - should be
either divested or pursued as a Joint Venture.
"In Q1, to put this strategy in motion, we divested ourselves of two of our
four tenements at the Broken Hill Project. Furthermore, in this latest
Quarter, we announced a soil sampling campaign that would reconcile past
results and help to inform future drilling programs at our flagship NWQ Copper
Project."
PAST WORK AT BIG ONE PROVES DEVELOPMENT POTENTIAL OF PROSPECT
The Big One Deposit has long been a prospect of interest. In 2022, the Company
delivered a maiden, JORC 2012 compliant Mineral Resource Estimate (MRE)(3) of
2.1Mt @ 1.1% Cu for 21,886t contained metal, which included the following high
grade drilling results:(4)
· 40m @ 1.64% from surface incl: 11m @ 4.40% from 24m, 5m @ 7.34% from
28m and 1m @ 16.65% from 29m (BO_303RC)
· 44m @ 1.19% Cu from surface incl: 14m @ 3.55% from 27m, 3m @ 10.88%
from 27m and 1m @ 12.6% from 37m (BO_301RC)
FOCUS AREA OF CAMPAIGN DEFINED
Non-Executive Director and Chief Geologist, Joel Logan, devised a targeted
soil sampling campaign; covering eight highly prospective areas across the Big
One Deposit - north and south of the 1,200m line of lode (Figure 1).
FIGURE 1: BIG ONE DEPOSIT LINE OF LODE AND FOCUS AREAS FOR CAMPAIGN
RATIONALE FOR CAMPAIGN PARAMETERS
A previous IP survey undertaken by Castillo in 2020, comprised six lines
ranging from 500-700m long and spaced 200m apart over the 1,200m line of lode.
FIGURE 2: LINE LOCATIONS TRANSVERSING BIG ONE DEPOSIT
The 2020 IP survey interpretations at the time suggested that there was a
significant untested bedrock conductor north of the line of lode that was
materially larger than the high-grade anomaly drilled in 2020 (Figure 2).
Further, interpretations from surface sampling implied that there was
incremental copper mineralisation along north-trending fault structures,
rather than constrained within the trachyte dyke.
FIGURE 3: LINE 3, NEWLY IDENTIFIED BEDROCK CONDUCTORS
GOSSAN FORMATIONS REQUIRING FURTHER ASSESSMENT
Based on historical surface observations, ~200m north of the line of lode is a
sizable, potential mineralised gossan that has been identified for thorough
assessment for its underlying copper potential.
Gossan formations are known to act as a 'marker' for subsurface ore deposits,
and are generally observed as rock that is intensely oxidised, decomposed or
weathered in appearance.
PURPOSE OF CAMPAIGN
The Scope of Work is designed to progress and/or enable the following
developments:
· Detailed geological mapping across the eight zones.
· Soil and/or rock chip sampling.
· Reconnaissance of potential future RC and diamond core sites.
· Explore magnetic susceptibility and pXRF measurements on any soil or
rock chip samples collected.
· Record any other pertinent geological observations while in the
field.
METHOD TO DETERMINE THE NEXT STEPS
The process following the three-day Soil Sampling Campaign is as follows:
· All samples to be sent to the laboratory for assaying.
· Once the full suite of geochemical results is returned, Castillo will
reconcile results with historical observations / 2020 IP survey.
· Castillo will then devise high conviction test-drill targets to
potentially extend known mineralisation north of the line of lode.
Cash and Liquid Investments
Cash on Hand
Cash on hand at end of quarter totalled $1.118 million.
Rehabilitation Security Bonds
Rehabilitation Security Bonds totalled $486,960 at quarter end, of which
$172,900 is expected to convert to cash within 1 month.
Listed Investments
Castillo holds 13,440,861 Rimfire Pacific Mining Ltd (ASX: RIM) shares which
as at 28 June 2024 had a market value of ~$376,000.
R&D Tax Incentive
An income tax refund of $182,756 due to the R&D Tax Incentive claim by
Castillo is expected to be received within 2 months.
Information Required Under ASX Listing Rules
1. ASX LR 5.3.5
During the Quarter $72,000 was paid to related parties of the Company relating
to non-executive director fees and exploration consulting fees paid to an
entity controlled by a related party.
2. ASX LR 5.3.1
A summary of the exploration expenditure incurred during the quarter is set
out below:
Table 1: Summary of Exploration Expenditure
Asset Consulting Fees Rates and Mines Department Fees Other
Cangai $1,000 $1,000 -
Broken Hill $1,000 - -
NWQ (Mt Isa) $4,000 $2,000 -
Zambia - - -
Totals $6,000 $1,000 -
3. ASX LR 5.3.3
In accordance with ASX Listing Rule 5.3.3, a schedule of Company's tenements
as at 30 June 2024 can be found at Appendix B.
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) CCZ ASX Release - 27 May 2024
2) CCZ ASX Release - 14 May 2024
3) CCZ ASX Releases - 1 June 2022
4) CCZ ASX Releases - 14 January 2020, 11
January 2021, 10 February 2021
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".
APPENDIX A: Key Projects
Figure 1: BHA Project, Broken Hill Region (Source: CCZ Geology Team)
Figure 2: Zambia Copper-Belt Projects (Source: CCZ Geology Team)
Figure 3: Historic drilling results in SYG's Mining Lease (Source: Refer to
CCZ ASX Release 11 November 2019)
Figure 4: NWQ Copper Project, Mt Isa Region (Source: CCZ Geology Team)
APPENDIX B: Interest in mining tenements held
Table 1: 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 2: 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
EL8434 100% 100% -
EL8435 100% 100% -
Table 3: 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 4: Zambia
Tenement ID Ownership at start of Quarter Ownership at end of Quarter Change during the Quarter
24659-HQ-LEL (Mkushi) 100% 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 June 2024
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 (249) (1,205)
1.3 Dividends received (see note 3)
1.4 Interest received 5 32
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 (244) (1,173)
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 (7) (567)
(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) (10) (38)
2.6 Net cash from / (used in) investing activities (17) (605)
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 1,387 2,897
4.2 Net cash from / (used in) operating activities (item 1.9 above) (244) (1,173)
4.3 Net cash from / (used in) investing activities (item 2.6 above) (17) (605)
4.4 Net cash from / (used in) financing activities (item 3.10 above) - -
4.5 Effect of movement in exchange rates on cash held (8) (1)
4.6 Cash and cash equivalents at end of period 1,118 1,118
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
$A'000
$A'000
flows) to the related items in the accounts
5.1 Bank balances 718 987
5.2 Call deposits 400 400
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) 1,118 1,387
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 70(1)
in item 1
6.2 Aggregate amount of payments to related parties and their associates included 2(2)
in item 2
(1)Comprises director's fees for the quarter.
(2)Comprises exploration expenditure paid to Field Crew Pty Ltd, a related
entity of former 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
$A'000
$A'000
available to the entity.
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) (244)
8.2 (Payments for exploration & evaluation classified as investing activities) (7)
(item 2.1(d))
8.3 Total relevant outgoings (item 8.1 + item 8.2) (251)
8.4 Cash and cash equivalents at quarter end (item 4.6) 1,118
8.5 Unused finance facilities available at quarter end (item 7.5)
8.6 Total available funding (item 8.4 + item 8.5) 1,118
8.7 Estimated quarters of funding available (item 8.6 divided by item 8.3) 4.5
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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 July 2024
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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