Structurally controlled copper at Valparaisa

CASTILLO COPPER LIMITED
("Castillo", "CCZ", or the "Company")

Structurally controlled copper at Valparaisa Prospect enhances exploration upside   

Castillo Copper Limited (LSE: CCZ; ASX: CCZ), a base metal explorer primarily focused on copper across Australia and Zambia, is pleased to announce it has completed a review on the Valparaisa Prospect, within the Mt Oxide Project, and interprets the Valparaisa Prospect to be primarily prospective for structurally controlled copper mineralisation.

Highlights

·    As part of an ongoing geological review, the geology team have interpreted the Valparaisa Prospect to be prospective for structurally controlled copper mineralisation

·    This is an encouraging interpretation as this style of mineralisation is apparent at the Mammoth Deposit (Total Resource: 32.3Mt @ 1.29% Cu (0.5% cut off)), located within the producing Capricorn Copper Mine circa 45 km directly south

·    Previous explorers, including BHP, undertook rock-chip sampling at the Valparaisa Prospect which returned anomalous assayed results up to 2,530ppm Cu

·    Further, a detailed review of the geophysical imagery and the rock units prevalent at the Valparaisa Prospect highlighted the following:

o  The Mt Gordon fault zone (SW-NE) and Valparaisa (SSE-NNW) have the potential to host structurally controlled copper mineralisation

o  Rock units of the Whitworth Quartzite are intersected by the Valparaisa fault and offshoots of this fault, geologically comparable to copper sulphide mineralisation at the Mammoth Deposit, which forms part of the Gunpowder Copper Mine

·    Whilst a field trip to the Valparaisa Prospect is key to determine if there are any observable surface features for structurally controlled copper mineralisation, it delivers another highly prospective target which enhances exploration upside  

·    In addition, significant work on logistics for the upcoming drilling campaigns at the Big One Deposit and Arya Prospect continues to gain momentum, thanks to joint input from CCZ's geology team and Depco Drilling's crew  

Simon Paull, Managing Director of Castillo Copper, commented: "The ongoing geological review at the Mt Oxide Pillar continues to deliver dividends, with an interpretation of the evidence highlighting potential prospectivity for structurally controlled copper mineralisation. This delivers another attractive target to investigate and cumulatively builds on the Mt Oxide Project's exploration upside."

Ged Hall, UK Director of Castillo Copper, said: "The geological review of the Mt Oxide Pillar has been a key strategic initiative that has unveiled ten targets for follow up exploration. Our team now have a significant pipeline of exploratory work ahead to prove up the potential of this outstanding asset."

Further information following geological review of the Valparaisa Prospect

After reviewing the historic evidence, the geology team have interpreted the Valparaisa Prospect to be primarily prospective for structurally controlled copper mineralisation. Incrementally, there is potential for some supergene copper mineralisation predominantly as a result of localised faulting and deformation of the stratabound copper horizons. Savannah Resources interpreted the Valparaisa Fault on a regional basis as an extension of the Mt Gordon Fault.

This is encouraging as structurally controlled copper mineralisation is prevalent throughout the Capricorn Copper Mine circa 45km directly south of the Valparaisa Prospect. The Mammoth Deeps Deposit contains structurally controlled copper associated with the faulting and brecciation of the Whitworth Quartzite, this forms part of the Mount Gordon fault zone. The Total Mineral Resource for the Mammoth Deeps Deposit is 32.3Mt @ 1.29% Cu (0.5% Cu cut off). 

Exploration efforts by previous explorers, which CCZ's geology team reviewed, included assayed rock-chip samples and a sparse RAB drilling campaign that were focused on identifying a stratabound copper system. However, in CCZ geology team's view, the historic exploration activities were too focused on stratabound copper. As such, they missed the potential to uncover structurally controlled copper mineralisation and/or supergene potential associated with localised faulting and/or deformation of the stratabound copper beds.

The next step is a field trip to the Valparaisa Prospect to verify if there are surface expressions of the proposed underlying styles of copper mineralisation.

Overview of Mt Oxide Project

Castillo is targeting the development of a viable copper mining operation at the Mt Oxide Project, which is located approximately 150km north of Mt Isa in northwest Queensland. The project is within the proximity of several historic and currently operating copper mines including Lady Annie and Capricorn Copper.

On 22 March 2017, the Company announced that it had entered into an agreement with certain sellers to acquire the entire issued capital of QComm, an Australian copper and cobalt company which owns three assets targeting high grade copper and cobalt systems in New South Wales and Queensland (including the Mt Oxide Project). On 4 July 2017, the Company completed the QComm Acquisition on 4 July 2017 and in August 2017, the Company received notice from Queensland's Department of Natural Resources and Mines that the final exploration application had been granted.

Currently, the main highlight within the Mt Oxide Project is the exploration targets known as Big One Deposit and the Ayra Prospect, which was identified through an airborne electromagnetic survey conducted by Geoscience Australia in March 2019. The Company's main objective is to progress with several site visits to conduct geochemical sampling and geophysical surveys on known exploration targets to facilitate an inaugural test drilling campaign for developing a clear exploration strategy.

Geological review status quo

To date, the Mt Oxide Project geological analysis has delivered significant value-added insights and upside potential apparent across the nine prospects reviewed. The final prospect, Eldorado, will complete the series. Overall, this exercise has built a sizeable pipeline of work ahead and unequivocally demonstrates the Mt Oxide Project delivers significant incremental exploration upside moving forward. 

In addition to this release, a PDF version of this report, with supplementary information can be found on the Company's website: https://www.castillocopper.com/asx-announcements/

For further information, please contact:

Notes to Editors:

About Castillo Copper

Castillo Copper Limited is an Australian-based explorer primarily focused on copper across Australia and Zambia. Castillo Copper is listed on the LSE and ASX under the ticker "CCZ".

The three main projects across Australia and Zambia include:

Australia

Mt Oxide Project

Castillo is targeting the development of a viable copper mining operation at the Mt Oxide Project, which has significant exploration upside with several high-grade targets including an interpreted 130m thick by 1,500m by 450m massive sulphide bedrock conductor that is about to be drilled. The project is located approximately 150km north of Mt Isa in northwest Queensland. The project is within the proximity of several historic and currently operating copper mines including Lady Annie and Capricorn Copper. 

Cangai Project

The Company's flagship project is the Cangai Project in northern New South Wales, where the Cangai Copper Mine is located, one of Australia's highest grading historic copper mines. The Company's core focus is the development and expansion of the Cangai Copper Mine, which comprises a volcanogenic massive sulphide deposit, with a JORC Code compliant Inferred Resource of 3.2Mt at 3.35 per cent. Cu. and up to 14.45 per cent. Cu in assayed diamond core intersections.

Zambia

Zed Projects

The Company is the sole shareholder of Zed, an Australian company which holds four high-quality prospective assets across Zambia's copper-belt, the second largest copper producer in Africa. Castillo Copper intends to initially focus on the Luanshya Project, which sits on the Zambian copper belt's Lufilian Arc geological structure. The second priority for the Company is the Mkushi Project, which contiguously surrounds an operating open-pit copper mine, in a region proven to be highly prospective for Cu-Au mineralisation. The Company is currently working towards establishing a Zambian in-country presence, utilising local geologists and joint venture partner teams.

Visit Castillo Copper's website: https://www.castillocopper.com/

Competent Person Statement

The information in this report that relates to Exploration Results for the Mt Oxide pillar for the 'Valparaisa prospect' contained in this announcement is based on a fair and accurate representation of the publicly available information at the time of compiling the ASX Release, and is based on information and supporting documentation compiled by Matthew Stephens, a Competent Person who is a Fellow of The Australian Institute of Geoscientists. Matthew Stephens is a Senior Consultant Geologist consulting to Xplore Resources Pty Ltd. Mr Stephens has been a Fellow of the Australian Institute Geoscientists for 11 years and has sufficient experience that is relevant to the style of mineralisation and type 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 Stephens consents to the inclusion in the report of the matters based on his information and the form and context in which it appears.