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viewCastillo Copper Ltd

Castillo Copper building a mid-tier copper business with a three pillar strategy

Snapshot

The company has three core copper assets based in New South Wales, Queensland, and Zambia.

Inspection at Cangai property

Quick facts: Castillo Copper Ltd

Price: 0.018 AUD

ASX:CCZ
Market: ASX
Market Cap: $12.18 m
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  • The base metals exploration company has a goal to build a mid-tier copper business
  • It has a three pillared copper strategy based on Pillar 1: Cangai Copper Mine, Pillar 2: Mt Oxide Project, and Pillar 3: Five prospective Zambia copper projects
  • The Cangai Copper Mine is one of the highest grade historical copper mines in Australia
  • The aim is to re-open the historical mine based upon the JORC resource of 3.2 million tonnes grading 3.35% copper
  • The company is also looking into monetising legacy stockpiles at the project and has an MoU off-take agreement with Noble Group
  • Castillo’s Mt Oxide Copper-Cobalt Project in Queensland’s Mt Isa region is located near the large Capricorn Copper mine
  • Mt Oxide hosts a large massive sulphide conductor target yet to be fully explored
  • Historical surface assays from Mt Oxide grade up to 2.9% copper
  • It is part of a wider area of Northern Australia flagged for its copper prospectivity in Australian Government geochemical survey data released in May 2018
  • The five prospective Zambia copper projects are near to established mines with JORC compliant resources under development
  • The highest priority is to commence resource definition drilling on the Luanshya project
  • Castillo believes the longer-term macro outlook for copper remains bullish, especially considering the prospective demand from the new energy sector

Pillar I: Cangai Copper Mine

Castillo Copper Ltd's (ASX:CCZ) The Cangai Copper Project in northern New South Wales near Grafton hosts the high-grading historical Cangai Copper Mine and five legacy stockpiles of high-grade ore.

The volcanogenic massive sulphide ore deposit is considered one of Australia’s highest-grade JORC-compliant inferred resources for copper, with 3.2 million tonnes grading 3.35% copper for 107,600 tonnes of contained copper.

The deposit also hosts 11,900 tonnes of zinc, 2.1 million ounces of silver and 82,900 ounces of gold.

Diamond drilling at the Cangai mine area has delivered assays of up to 14.45% copper, 5.93% zinc and 40.1 g/t silver.

The best intersection from RC drilling was 11 metres at 5.94% copper from 30 metres including 1-metre at 10.25% copper.

Pre-drilling exploration has already identified a number of targets for Castillo leading it to believe there is good potential for the resource to expand at depth.

Castillo intends to undertake a scoping study to better understand the development opportunity at Cangai.

Castillo has also inked an MoU with commodities trader Noble Group Limited with the plan to monetise stockpiles of historically mined ore at the project.

Metallurgical test work has shown the stockpile ore can be beneficiated with recoveries of over 80% grading up to 22% copper.

With approvals, this stockpile ore can be potentially sold to third party processors to generate early-stage cash flow for Castillo.

Pillar II: Mt Oxide Copper Project

The Mt Oxide Copper Project is located in the highly prospective Mt Isa region in Queensland, an area host to a number of mining operations.

Notably, the project is nearby to Lady Annie, Mt Oxide and Capricorn Copper which is on track to produce 30,000 tonnes per annum of copper concentrate.

Historical surface assays from the project grade up to 2.9% copper and an electromagnetic survey earlier this year found a sizeable bedrock conductor known as the Arya prospect.

Due to the project’s location, it is near infrastructure, skilled labour pools and processing options.

Mt Oxide is part of a wider area of Northern Australia that was flagged as being a potential copper 'hot spots' in Australian Geochemical Survey (NAGS) data released by the Australian Government in May 2018.

A number of pre-drilling exploration activities are planned at Mt Oxide as the next steps, which will be used to formulate an inaugural drilling campaign at the massive sulphide target.

Pillar III: Zambia projects

The final pillar of Castillo's three-pronged strategy lies in Zambia, where it has five highly prospective projects - Luanshya, Mkushi, Lumwa North/South, Mwansa, and Lusemfwa.

These fives projects cover around 1,050 square kilometres of an area near to operating mines and proven JORC-compliant resources under development as seen below.

At this stage, the Luanshya Project is the highest priority and Castillo aims to commence resource definition drilling.

The Mkushi Project was also flagged as a high-priority target after an independent geologist review in late August 2019 indicated a mineralised structure from a nearby copper mine extends into the project.

Mkushi surrounds the Munshiwenba Copper Mine, which began mining operations in 2018.

Castillo is working towards delivering a JORC compliance resource within 12-18 months at the project.

Who sits on Castillo Copper's board?

Castillo Copper Ltd’s (ASX:CCZ) board consists of chairman Rob Scott, managing director Simon Paull and non-executive directors Gerrard Hall and Peter Smith.

Rob Scott is a chartered accountant with more than 35 years of experience, including valuable strategic and commercialisation experience that he has utilised on the Sandfire Resources NL (ASX:SFR) board. Scott helped oversee development and commercialisation of Sandfire’s high-grade world-class Degrussa copper-gold mine in Western Australia and a related exploration program for the asset.

Simon Paull is an experienced finance and operational executive with over 25 years' experience in the resources industry, mostly in Africa. He is formerly the managing director of Sandvik's East African operations where he oversaw nine countries.

Ged Hall has a background in financial markets working at investment banks UBS and JP Morgan. He is based in London and has spent nearly a decade in the Middle East.

Pete Smith is a geophysicist with 30 years of experience in base metal mineral exploration. He has previously worked for Newmont Goldcorp Corp (NYSE:NEM) (FRA:NMM) (TSE:NGT) (SWX:NEM) buy-up Normandy Mining (AS:NDY), OZ Minerals Limited (ASX:OZL) (FRA:OXR) (OTCMKTS:OZMLF) predecessor Pasminco Limited, BHP Group Ltd (ASX:BHP) (LON:BHP) (NYSE:BHP) (NYSE:BBL) and several junior mining companies.

The Australian Society of Exploration Geophysicists and Australian Institute of Geoscientists (AIG) member is a qualified competent person and has held senior exploration manager roles, including regional exploration manager Australia for Cleveland-Cliffs Inc (NYSE:CLF) (FRA:CVA) (BMV:CLF).

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Watch

Full interview: Castillo Copper hails geological similarities of its Zambia...

Castillo Copper Ltd's (ASX:CCZ) managing director Simon Paull speaks to Proactive London's Andrew Scott soon after the second independent geological review on its Zambian projects confirmed the Luanshya project has comparable underlying geology to neighbouring operating copper mines and...

on 10/9/19

6 min read