- Title:
December 2020 Quarterly Report - Time:
07:00:03 - Date:
29 Jan 2021 - Category:
Corporate updates - ID:
2886N
CASTILLO COPPER LIMITED
("Castillo" or the "Company")
December 2020 Quarterly Report
Castillo Copper Limited (LSE and ASX: CCZ), a base metal explorer primarily focused on copper across Australia and Zambia, is pleased to announce its quarterly report for the period 1 October to 31 December 2020. During the period, most of the focus remained on advancing the RC drilling campaign at Big One Deposit within the Mt Oxide Project in Queensland's copper-belt in Australia.
HIGHLIGHTS
· Mt Oxide Project:
o Drilling campaign at Big One Deposit commenced
o Subsequent to the period close, game-changing assays confirmed a major copper discovery at the high-grade Big One Deposit - two 40-44m wide potentially economic intercepts from surface with up to 16.65% Cu, significantly extending known mineralisation
o Best intercepts comprised:
303RC: 40m @ 1.64% Cu from surface including:
§ 11m @ 4.40% Cu from 24m
§ 5m @ 7.34% Cu from 28m &
§ 1m @ 16.65% Cu from 29m
301RC: 44m @ 1.19% Cu from surface including:
§ 14m @ 3.55% Cu from 27m,
§ 3m @ 10.88% Cu from 37m &
§ 1m @ 12.66% Cu from 37m
· Zambia Projects:
o Sampling at Mkushi Project confirmed eight target areas with significant copper anomalism and extended strike lengths up to 4.2km next to an operating copper mine in a region proven to be highly prospective for copper-gold mineralisation
An overview of key events follows:
DEVELOPMENT WORK
Castillo has four properties comprising the Mt Oxide Project in Mt Isa's copper-belt, four assets across Zambia's copper-belt, the historic Cangai Copper Mine and a large footprint near Broken Hill's world class silver-zinc-lead deposit in New South Wales (NSW), Australia.
Mt Oxide Project
On 6 October 2020, Castillo's geology team completed the study on all ten prospects within the Mt Oxide Project. The final part of the study reviewed the Eldorado target area which is circa 4km south-east from the Arya Prospect. The geology team interpreted the Eldorado target to be prospective for structurally controlled copper mineralisation but a detailed follow up field trip is necessary to formulate a thorough exploration plan.
On 9 October 2020, Castillo's geology team confirmed they had largely finalised all necessary logistics with key stakeholders, enabling the drilling campaign at the Mt Oxide Project to commence.
On 27 October 2020, Castillo announced the commencement of the RC drilling campaign at Big One Deposit. The programme comprised 4,385m over 35 drill-holes, which focused on a strike zone (~580m by ~120m) to test for mineralisation from ~26m up to ~190m below surface. Further, an incremental 160m diamond drilling campaign, targeting two drill-holes, tested primarily for shallow mineralisation from ~26m up to ~52m below surface.
On 16 November 2020, Castillo announced, after inspecting samples from the first seven drill-holes completed at Big One Deposit, that the geology team had observed visible copper oxide (malachite) and sulphide (chalcocite) mineralisation in wide intercepts up to 13m at shallow depths.
On 30 November 2020, Castillo announced that assays verified shallow copper mineralisation up to 4.14% Cu at Big One Deposit. The results, which were based on visually logged mineralised intersects, highlighted shallow copper mineralisation apparent within four drill-holes, with the best economic intercepts being:
· RC_213: 7m @ 1.37% Cu from 57m incl: 3m @ 2.18% Cu from 58m
· RC_211: 1m @ 4.14% Cu from 65m
· RC_206: 7m @ 0.54% Cu from 55m incl: 2m @ 1.35% Cu from 60m
· RC_207: 4m @ 0.43% Cu from 85m incl: 2m @ 1.03% Cu from 85m
On 14 December 2020, Castillo announced that a further six drill-holes completed at Big One Deposit had all intersected visible, shallow copper oxides and sulphides up to 12m, indicating potential extensions to known mineralisation at depth and providing a compelling case for scalability. These included:
· BO_301RC: 12m cumulative - 3m from 28-31m & 9m from 32-41m - Black copper oxides and malachite (oxide)
· BO_303RC: 10m cumulative - 3m from 25-28m & 7m from 28-35m - Black copper oxides, malachite (oxide), and chalcocite (sulphide)
· BO_306RC: 7m cumulative - 4m from 93-97m and 3m from 99-102m - Malachite, pyrite, and chalcocite
· BO_305RC: 5m cumulative - 4m from 30-34m & 1m from 39-40m - Malachite and chalcocite
· BO_302RC: 3m from 36-39m - Black copper oxides
· BO_304RC: 1m from 81-82m - Azurite and malachite
During the quarter, the Company paid $513,000 in consultants fees.
Zambia Pillar
On 2 November 2020, Castillo's Zambian geology team completed a systematic infill soil sampling campaign at the prospective Mkushi Project in Zambia's copper-belt. The campaign, which comprised 702 infill samples, was undertaken to derive a better understanding of copper anomalism apparent within the tenure boundaries.
The samples were analysed using a portable XRF analyser which is consistent with previous field work. Overall, the results confirmed eight target areas with significant copper anomalism and extended strike lengths, ranging 1.5km - 4.2km, compared with the January 2020 campaign.
During the quarter, the Company paid $19,000 in consultants fees.
New South Wales Assets
No material work was undertaken on the NSW assets, comprising Cangai Copper Mine and Broken Hill Alliance tenure, during the review period. All tenures were successfully renewed for five (5) year terms.
During the quarter, the Company paid $27,000 in consultants fees and $215,000 for the acquisition of Broken Hill tenements from Wyloo Metals.
CORPORATE
· Results of EGM: On 2 October 2020, Castillo advised that all 13 resolutions - published in the Notice of Meeting on 3 September 2020 - were passed.
· Notice of AGM and results: On 19 October 2020, Castillo announced the AGM would be held on 26 November 2020 with eight resolutions being presented for shareholder approval. Subsequently, on 26 November 2020, Castillo announced that all resolutions were passed.
During the quarter $54,000 was paid to related parties of the Company relating to executive director salary, non-executive director fees.
POST PERIOD EVENT
On 4 January 2021, Castillo confirmed that during 4Q 2020, the drilling contractor completed 20 drill-holes at the Big One Deposit comprising:
· Six drill-holes for the 200 series with partial assays for visible copper confirming up to 4.1% Cu; and
· Fourteen drill-holes for the 300 series with visible copper mineralisation apparent in BO_301-06RC.
Subject to the receipt of final interpretations and full assays from the laboratory, the Board is targeting to release completed drill logs and relevant observations for all 20 drill-holes in two to three batches.
On 11 January 2021, Castillo announced assays confirming a major copper discovery at the high-grade Big One Deposit. Notably, these game-changing assays comprised two 40-44m wide potentially economic intercepts from surface, with up to 16.65% Cu, that significantly extended known mineralisation.
The best apparent intercepts comprise:
· 303RC: 40m @ 1.64% Cu from (fm) surface incl: 11m @ 4.40% fm 24m, 5m @ 7.34% fm 28m & 1m @ 16.65% fm 29m
· 301RC: 44m @ 1.19% Cu fm surface incl: 14m @ 3.55% fm 27m, 3m @ 10.88% fm 37m & 1m @ 12.6% fm 37m
· 213RC: 12m @ 0.79% Cu fm 52m incl: 8m @ 1.06% Cu fm 57m, 3m @ 2.03% Cu fm 58m, 1m @ 4.27% Cu fm 59m & 1m @ 1.46% Cu fm 62m
· 207RC: 8m @ 0.47% fm 84m incl: 2m @ 1.10% Cu fm 85m & 1m @ 1.49% fm 86m
· 306RC: 8m @ 0.41% Cu fm 16m and 4m @ 0.97% fm 96m incl: 2m @ 1.30% fm 96m
· 206RC: 8m @ 0.42% Cu fm 54m incl: 3m @ 1.02% Cu fm 59m, 1m @ 1.75% Cu fm 60m
· 302RC: 5m @ 0.66% Cu fm 35m incl: 1m @ 1.30% fm 37m
· 305RC: 5m @ 0.53% Cu fm 34m incl: 1m @ 1.19% Cu fm 38m
Assay results also revealed minor-moderate Cobalt mineralisation, and minor silver, bismuth, and gold mineralisation, with the gold mineralisation not associated with the copper.
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:
| Castillo Copper Limited |
+61 8 6558 0886 |
| Simon Paull (Australia), Managing Director Gerrard Hall (UK), Director |
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| SI Capital Limited (Financial Adviser and Corporate Broker) |
+44 (0)1483 413500 |
| Nick Emerson |
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| Luther Pendragon (Financial PR) |
+44 (0)20 7618 9100 |
| Harry Chathli, Alexis Gore, Joe Quinlan |
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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:
· The Mt Oxide project 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.
· 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."
APPENDIX 1: INTEREST IN MINING TENEMENTS HELD
| 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% |
- |
| BROKEN HILL |
|||
| located within a 20km radius of Broken Hill, 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 |
0% |
100%** |
100%** |
| EL 8435 |
0% |
100%** |
100%** |
| MT OXIDE |
|||
| Mt Isa region, northwest 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 |
- |
- |
Application |
| Zambia |
||||
| Project |
Tenement ID |
Ownership at start of Quarter |
Ownership at end of Quarter |
Change during the Quarter |
| Lumwana North |
23914-HQ-SEL |
- |
100% |
100% |
| Lumwana North |
23913-HQ-SEL |
- |
100% |
100% |
| Mkushi |
24659-HQ-LEL |
- |
100% |
100% |
| Luanshya |
22448-HQ-LEL |
- |
0%* |
0%* |
| Luanshya |
25195-HQ-LEL |
- |
55% |
55%* |
| Luanshya |
25273-HQ-LEL |
- |
55%^ |
55%^* |
| Mwansa |
25261-HQ-LEL |
- |
100%^ |
100%^ |
*CCZ can earn up to 80% by meeting previously disclosed milestones
^ Indicates the tenement is still under application
** Funds for the acquisition of the tenements were paid during the quarter, however the actual transfer of the leases was completed after the end of the quarter
Appendix 5B
Mining exploration entity or oil and gas exploration entity
quarterly cash flow report
Consolidated statement of cash flows |
Current quarter |
Year to date (6 months) |
|
| 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 |
(354) |
(777) |
| 1.3 |
Dividends received (see note 3) |
|
|
| 1.4 |
Interest received |
|
|
| 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 |
(354) |
(777) |
|
|
|||
| 2. |
Cash flows from investing activities |
|
|
| 2.1 |
Payments to acquire or for: |
||
|
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(a) entities |
||
|
|
(b) tenements |
(215) |
(233) |
|
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(c) property, plant and equipment |
|
|
|
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(d) exploration & evaluation |
(559) |
(785) |
|
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(e) investments |
|
|
|
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(f) other non-current assets |
(214) |
(214) |
| 2.2 |
Proceeds from the disposal of: |
|
|
|
|
(a) entities |
||
|
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(b) tenements |
|
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|
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(c) property, plant and equipment |
|
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|
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(d) investments |
|
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|
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(e) other non-current assets |
|
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| 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 |
(988) |
(1,232) |
|
|
|||
| 3. |
Cash flows from financing activities |
|
2,246 |
| 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 |
|
70 |
| 3.4 |
Transaction costs related to issues of equity securities or convertible debt securities |
|
(323) |
| 3.5 |
Proceeds from borrowings |
|
|
| 3.6 |
Repayment of borrowings |
|
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| 3.7 |
Transaction costs related to loans and borrowings |
|
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| 3.8 |
Dividends paid |
|
|
| 3.9 |
Other (provide details if material) |
|
|
| 3.10 |
Net cash from / (used in) financing activities |
- |
1,993 |
|
|
|||
| 4. |
Net increase / (decrease) in cash and cash equivalents for the period |
|
|
| 4.1 |
Cash and cash equivalents at beginning of period |
4,486 |
3,130 |
| 4.2 |
Net cash from / (used in) operating activities (item 1.9 above) |
(354) |
(777) |
| 4.3 |
Net cash from / (used in) investing activities (item 2.6 above) |
(988) |
(1,232) |
| 4.4 |
Net cash from / (used in) financing activities (item 3.10 above) |
- |
1,993 |
| 4.5 |
Effect of movement in exchange rates on cash held |
(29) |
1 |
| 4.6 |
Cash and cash equivalents at end of period |
3,115 |
3,115 |
| 5. |
Reconciliation of cash and cash equivalents |
Current quarter |
Previous quarter |
| 5.1 |
Bank balances |
3,115 |
4,486 |
| 5.2 |
Call deposits |
|
|
| 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) |
3,115 |
4,486 |
| 6. |
Payments to related parties of the entity and their associates |
Current quarter |
| 6.1 |
Aggregate amount of payments to related parties and their associates included in item 1 |
54[1] |
| 6.2 |
Aggregate amount of payments to related parties and their associates included in item 2 |
|
|
[1] Comprises director's fees and consulting fees for the quarter. |
||
| 7. |
Financing facilities |
Total facility amount at quarter end |
Amount drawn at quarter end |
| 7.1 |
Loan facilities |
|
|
| 7.2 |
Credit standby arrangements |
|
|
| 7.3 |
Other (please specify) |
|
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| 7.4 |
Total financing facilities |
|
|
|
|
|
|
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| 7.5 |
Unused financing facilities available at quarter end |
|
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| 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) |
(354) |
| 8.2 |
(Payments for exploration & evaluation classified as investing activities) (item 2.1(d)) |
(559) |
| 8.3 |
Total relevant outgoings (item 8.1 + item 8.2) |
(913) |
| 8.4 |
Cash and cash equivalents at quarter end (item 4.6) |
3,115 |
| 8.5 |
Unused finance facilities available at quarter end (item 7.5) |
|
| 8.6 |
Total available funding (item 8.4 + item 8.5) |
3,115 |
|
|
|
|
| 8.7 |
Estimated quarters of funding available (item 8.6 divided by item 8.3) |
3.4 |
| Note: if the entity has reported positive relevant outgoings (ie a net cash inflow) in item 8.3, answer item 8.7 as "N/A". Otherwise, a figure for the estimated quarters of funding available must be included in item 8.7. |
||
| 8.8 |
If item 8.7 is less than 2 quarters, please provide answers to the following questions: |
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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? |
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Answer: N/A
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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? |
|
|
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Answer: N/A
|
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|
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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
|
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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. |
|
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: 29 January 2021
Authorised by: The Board of Castillo Copper Ltd
(Name of body or officer authorising release - see note 4)
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.
December 2020 Quarterly Report07:00:0329 Jan 2021Corporate updates2886N