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Castillo Copper Ltd

Castillo Copper holds portfolio of NSW, Queensland and Chilean assets

Snapshot

The company has the Cangai Copper Project in northern NSW as its flagship asset.

Inspection at Cangai property

Quick facts: Castillo Copper Ltd

Price: $0.02

Market: ASX
Market Cap: $10.27 m
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  • The base metals exploration company focuses on copper, cobalt, zinc and nickel
  • Cangai Copper Project in NSW is the flagship project and houses the high-grading Cangai copper mine
  • Castillo believes it has resolved issues the NSW Resources regulator had flagged to halt exploration activities at the project in December 2018 after a November 2018 inspection
  • The company has been in a series of voluntary suspensions since December 21, 2018
  • Cangai is not Castillo’s only project, the company also holds assets in NSW’s Broken Hill, Queensland and Chile
  • Castillo’s Mt Oxide Copper-Cobalt Project in Queensland’s Mt Isa region is located near the large Capricorn Copper mine
  • Mt Oxide project has featured up to 2.9% copper an has a large mineralised footprint
  • 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

Who sits on Castillo Copper's board?

Castillo Copper Ltd’s (ASX:CCZ) board consists of chairman Peter Meagher, executive director Alan Armstrong and non-executive directors Peter Smith and Robert Scott.

Meagher is a certified practising accountant, former equity analyst and investment banking senior corporate adviser and finance director to large listed groups, including mining and exploration companies.

Armstrong is a chartered accountant who previously headed up Volt Resources Ltd (ASX:VRC) as its managing director and helped grow the company from a start-up to a $180 million business at the time of his departure.

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).

Chartered accountant Robert Scott has 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.

What are Castillo Copper’s main projects?

Castillo holds assets in New South Wales, Queensland and Chile, housing exploration licences in wholly-owned subsidiaries.

The company raised $1.23 million from high-quality investors at 2 cents a share, with one free-attaching 3-year 5-cent option by December 12, 2019, primarily to progress its NSW assets.

Castillo’s NSW assets are about 45 kilometres from Grafton and near the far west mining mainstay of Broken Hill.

Previously flagged as the group’s flagship project, the Cangai Copper Project houses the high-grading historical Cangai copper mine and five stockpiles of high-grade ore off the mine.

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, containing 107,600 tonnes of copper, 11,900 tonnes of zinc, 2.1 million ounces of silver and 82,900 million ounces of gold.

Supergene ore features up to 35% copper and 10% zinc — good potential feedstock for direct shipping ore.

Phase II reverse circulation (RC) drilling that started in July 2018 confirmed extensive massive sulphide mineralisation with most of the 39 drill-holes completed up to August 20, 2018.

Gradings in the first five holes were up to 10.25% copper, 6.04% zinc and 32.5 g/t silver.

A highlighted standout RC intersection was 11 metres grading 5.94% copper, 2.45% zinc and 19.13 g/t silver from 40 metres.

Diamond drill core assays reported in December 2018 included a best assay of 4.37 metres of highly-mineralised core grading 5.06% copper, 2.56% zinc and 22.7 g/t silver from 49.9 metres.

The company inked an MoU with commodities trader Noble Group Limited for the project, expecting the relationships could deliver early revenues from stockpiles.

In March the company reported in its December half-year report for 2018 that its board was still waiting on metallurgical test work from legacy stockpiles around Cangai Copper Mine to facilitate a close-out of the MoU agreement with Noble.

How long have Castillo Copper’s securities been in a voluntary halt?

Exploration activities were halted at Cangai in December 2018 after a November 2018 inspection by the NSW Resources regulator.

Parent company Castillo believes it has now resolved issues flagged by the regulator and is waiting on a formal response from the regulator which the company reported in April was continuing to conduct enquiries.

The company has been in a series of voluntary suspensions since December 21, 2018, after suspension notices to two Castillo subsidiaries, Total Minerals Pty Ltd and Total Iron Pty Ltd, which hold the exploration licences EL 8625 and EL 8635 for Cangai project.

Castillo’s last halt was in April 2019 and was expected to last until a further announcement it expected would be made at pre-open on Monday, May 6, 2019.

What are Castillo Copper’s other assets?

Outside NSW, Castillo’s east coast Australian assets are in Queensland. These assets are in Marlborough and Mt Isa region.

Mt Oxide project is near Capricorn Copper Mine. If the company developed the project with a partner it could mine copper-cobalt at the project that has notably featured up to 2.9% copper and a large mineralised footprint.

The project is near infrastructure, skilled labour pools and processing companies Castillo says are amenable to offtake arrangements.

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.

Castillo’s lower priority assets are in Chile and consist of the 1800-hectare Trueno concessions.

The concessions are in a zone known for high-grade copper-gold projects such as El Indio that are prospective but underexplored for porphyry copper-gold deposits.

Inflection points

  • Regulator advice on issues flagged in December quarter of 2018

  • Resumption of trading on the Australian Securities Exchange

  • Project progression milestones for the company

  • Exploration successes in-field

  • Significant transactions and agreements

Castillo Copper board waits on regulator response

“The board believes it has now complied with all specified actions (at Cangai copper mine) as set out by the regulator and remains active in its engagement with the regulator as it continues its enquiries,” Castillo director Alan Armstrong wrote on behalf of the company’s directors in the company’s December half-year financial report in March.

“The board will await a formal response from the regulator regarding regulatory approval for the recommencement of exploration activities on the exploration licences.”

 

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Castillo Copper approaching 'critical 12 months' - Capital Network analyst

Capital Network analyst Ed Stacey discusses Castillo Copper Ltd (ASX:CCZ). Castillo's a metal explorer primarily focused on Copper, Zinc, Cobalt, and Nickel. The flagship project consists of three prospects at Jackaderry in NSW, Australia which are highly prospective for...

on 13/9/18

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