Strategic Update for Big One Deposit

02 March 2021

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

Strategic intent to recommence mining operations at Big One Deposit

Modelling for inaugural JORC compliant resource at Big One Deposit expected shortly as the Board firms up plans to apply for a mining lease  

Castillo Copper Limited (LSE and ASX: CCZ), a base metal explorer primarily focused on copper across Australia and Zambia, is pleased to announce that following a series of excellent assay results, alongside highly favourable forward global demand for copper, the Company is focusing its strategic intent on progressing Big One Deposit and starting to prepare the groundwork to potentially recommence mining operations.

Highlights

·    Castillo's Board has re-shaped its strategic intent for Big One Deposit to capitalise on the highly favourable forecast global demand-supply dynamics for copper, with potential supply bottlenecks maintaining upward pressure on the LME price

·    Castillo's geology consultant is expected to shortly complete modelling of the inaugural JORC compliant resource for Big One Deposit and the Board is firming up plans to apply for a mining lease

·    Strategic intent to recommence mining operations is supported by Big One Deposit's key fundamental attributes:

o  A demonstrable high-grade shallow copper system that was previously mined in 1997 - producing 4,400t supergene ore, averaging 3.5% Cu - via several open pits

o  Recent and historical drilling campaigns that have produced exceptional high-grade intercepts, including:

-    303RC: 40m @ 1.64% 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

-    BO017: 34m @ 1.51% Cu from surface incl: 21m @ 2.25% Cu fm surface, 12m @ 3.44% Cu fm 3m, 6m @ 4.79% Cu fm 3m and 1m @ 9.4% fm 9m 

-    B07: 3m @ 12.25% Cu from 42m incl: 2m @ 17.87% Cu from 43m; and 1m @ 28.4% Cu from 44m

-    B05: 8m @ 2.33% Cu from 44m incl: 6m @ 3.00% Cu from 45m; and 5m @ 3.28% Cu from 45m

-    B06: 4m @ 2.20% Cu from 44m incl: 2m @ 3.19% Cu from 46m and 1m @ 3.63% Cu from 47m 

-    BO015: 18m @ 0.86% Cu fm 11m incl: 6m @ 1.85% Cu fm 20m, 3m @ 2.98% Cu fm 20m and 1m @ 8% fm 20m 

-    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

o  Located in the world-class Mt Isa copper-belt, which has excellent supportive mining infrastructure and third-party processors with excess milling capacity that Castillo is now actively canvassing

Next steps

·    Further work is planned to extend known mineralisation and Big One Deposit's potential scale, commencing with an Induced Polarisation (IP) survey to identify incremental test-drill targets

·    Once ground conditions improve, post the wet-season, drilling will resume at Big One Deposit then move to Arya Prospect which has an interpreted 130m thick potential massive sulphide anomaly (1,500m by 450m) that is highly prospective for copper mineralisation

·    Release of the inaugural JORC compliant resource and updates on next phase of exploration

Simon Paull, Managing Director of Castillo Copper, commented: "The combination of excellent, high-grade assay results and buoyant global demand for copper means the Board is prepared to step up its strategic intent for Big One Deposit. We are highly optimistic that the next phase of planned exploratory work has the potential to further extend known mineralisation and build out this high-grade shallow copper system. Consequently, the Board believes it is prudent to start preparing the ground-work to potentially recommence mining operations."

STRATEGIC INTENT: RECOMMENCE MINING OPERATIONS AT BIG ONE DEPOSIT

The prevailing favourable outlook for the global copper market - based on both near-term and longer-term drivers - has prompted Castillo's Board to re-shape its strategic intent for Big One Deposit to capitalise on this opportunity. In addition, the Board is cognisant of the improving fundamentals for the global cobalt market, as the recent drilling campaign also verified the apparent presence of ore grade cobalt mineralisation² at Big One Deposit.

The starting point is to firm up plans to apply for a new mining lease, ahead of Castillo's geology consultant releasing an inaugural JORC compliant resource.

The arguments in favour of taking this assertive stance are compelling, as Big One Deposit already has several high-quality fundamental strengths, including:

o  A known high-grade shallow copper system that was previously mined in 1997 - producing 4,400t supergene ore, averaging 3.5% Cu - via several open pits;

o  Recent and historical drilling campaigns that have produced exceptional high-grade intercepts (Figure 1);

o  Excellent location in the world-class Mt Isa copper-belt, which is a well-established mining region with solid infrastructure and ready access to a skilled labour pool; and

o  Moreover, there are several third-party processors in the region with excess milling capacity that Castillo's management team are now actively canvassing.

EXPLORATION PLANS

Moving forward, further work is planned to extend known mineralisation and Big One Deposit's potential scale, starting with an Induced Polarisation (IP) survey to identify incremental test-drill targets.

In addition, once ground conditions improve, post the wet-season, drilling will resume at Big One Deposit before moving to Arya Prospect which has an interpreted 130m thick potential massive sulphide anomaly (1,500m by 450m) that is highly prospective for copper mineralisation.   

Next steps

Release of inaugural JORC compliant resource and updates on next phase of exploration.

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:

ABOUT CASTILLO COPPER

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

Competent Person Statement

The information in this report that relates to Exploration Results for the "Big One Deposit" relates to Exploration Results is based on information compiled or reviewed by Mr Mark Biggs, a consultant to Castillo Copper Limited. Mr Biggs is a member of the Australian Institute of Mining and Metallurgy (member #107188) and has sufficient experience of relevance to the styles of mineralisation and types of deposits under consideration, and to the activities undertaken, to qualify as a Competent Person as defined in the 2012 Edition of the Joint Ore Reserves Committee (JORC) Australasian Code for Reporting of Exploration Results, and Mineral Resources. Mr Biggs holds an AusIMM Online Course Certificate in 2012 JORC Code Reporting. Mr Biggs also consents to the inclusion in this report of the matters based on information in the form and context in which it appears.