In consideration for the acquisition, Castillo will pay the vendors $50,000 in cash, up to 125 million Castillo shares in stages and a 2% net smelter return royalty on the sale of concentrates from the projects.
Five copper projects
Castillo chairman Rob Scott said: “The board is delighted with the proposed acquisition of a highly prospective tenement package in Zambia.
“All the key ingredients are now in place to move forward with the Board’s three pillared strategic intent to transform CCZ into a dual-listed, mid-tier copper group.”
Five copper projects
The Luanshya project, to be developed first, is located in Zambia’s traditional copper-belt along a key north-west structural trend known as the Lufilian Arc.
The second priority is the Mkushi project, which contiguously surrounds an operating open-pit copper mine, in a region proven to be highly prospective for copper-gold mineralisation.
The Mkushi tenure hosts several brownfield targets in granitic intrusions/schists within a major mineralised shear zone.
Mineralisation within the Mkushi Project
At the Lusemfwa project area, activities of artisanal miners indicate outcropping copper mineralisation is present.
More importantly, these artisanal miners have confirmed they are amenable to working closely with tenement owners to facilitate scaling up mining operations and securing regular employment.
Next steps: accelerated exploration program
Assuming the acquisition proceeds, then the top priority is to commence resource definition drilling on the Luanshya tenement given a significant probability for discovering high-grade copper mineralisation.
The second priority is the Mkushi project followed by Lumwana North & South, Mwansa and Lusemfwa.
Copper is a strategic mineral to Zambia
Zambia is politically stable, with a common law legal framework that caters to the mining industry’s requirements.
Importantly, copper is a strategic mineral to Zambia given its material contribution to exports, GDP and employment.
Three pillars strategy
The Zambia assets will complement Castillo’s Cangai Copper Mine and Mt Oxide project, as collectively they deliver three pillars, with significant exploration upside, that are critical to successfully building a mid-tier copper group.
Castillo is working to finalise the enforceable undertaking with the NSW Resource Regulator in the coming weeks so that trading in its shares can resume on the ASX, while simultaneously progressing the London dual listing and implementing the three pillars strategy.