Castillo Copper’s three-pillar strategy to be mid-tier copper producer on track with $2.1 million fund-raising to expedite plans
Snapshot
Its unique three-pillared copper strategy delivers material exploration upside and value creation potential.
Quick facts: Castillo Copper Ltd
Price: 0.026 AUD
ASX:CCZMarket: ASX
Market Cap: $21.61 m
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Jan '20Feb '20Mar '20Apr '20May '20Jun '200.010.020.030.04048MZoom1m3m6m1yFromDec 26, 2019ToJun 26, 2020Highcharts.comCastillo Copper Ltd (ASX:CCZ) is firmly on track with a three-pillar strategy to transform into a mid-tier copper business having completed a $2.1 million fund-raising exercise to expedite its operations in Australia and Zambia.
The company, which has three core copper assets in New South Wales and Queensland in Australia and in Zambia, is close to drilling at its Mt Oxide pillar in Queensland’s Mt Isa copper-belt.
The company has a three-pillar strategy to build a copper business. They are:
➢ Pillar 1: Mt Oxide project – Arya prospect with large scalable interpreted massive sulphide conductor and high-grade Big One deposit that are set to be drill-tested once approvals secured;
➢ Pillar 2: Four prospective Zambia copper projects near established mines with JORC compliant resources; and
➢ Pillar 3: Cangai Copper Mine – plans to develop one of Australia’s highest grading copper deposits to bankable feasibility study (BFS).
Castillo Copper is in the final stages of its planned listing on the Secondary Board of the London Stock Exchange.
The company has also formed the Broken Hill Alliance with Squadron Resources and Impact Minerals Ltd (ASX:IPT) seeking to optimise another asset in Far West NSW.
Fund-raising
Last week, the company raised $2.1 million after completing a placement to current and new sophisticated and institutional investors.
There will be 95,454,545 new shares issued at 2.2 cents per share, representing a 12% discount to the closing price on June 16, 2020.
The placement, which was well supported by current and new Australian and UK shareholders, also includes one free attaching unlisted option for each share subscribed for, exercisable at 5 cents, expiring three years from the date of issue.
Placement shares and options will be issued in a single tranche without shareholder approval under CCZ’s existing placement capacity pursuant to ASX Listing Rules 7.1 (12,935,940 shares and 104,454,545 options) and 7.1A (82,518,605 shares).
As well as the Mt Oxide prospects, funds will also be allocated to the ongoing development of the other two pillars - Cangai Copper Mine and projects in the Zambian copper-belt - and general working capital.
Pillar 1: Mt Oxide Project
Considerable work has been done on the Big One Deposit and Arya prospect, which have all been prioritised for immediate drill-testing. There are several mineralisation styles within Mt Oxide pillar, which aggregated enhance the overall exploration upside:
- Large potential massive sulphide target, interpreted to be around 130 metres thick (about 1,500 metres long and 450 metres wide), identified from airborne electro-magnetic (AEM) surveys and followed up by an EM ground survey;
- IOCG (iron-oxide-copper-gold) targets identified from federal government agencies/in-house research;
- High-grade shallow copper within supergene ore;
- Mt Isa style signatures based on high-grade copper-zinc-lead-gold-silver readings in surface outcropping; and
- Notable visible gold identified at surface
The company has approval in principle to progress drilling at the Arya prospect, subject to finalising timelines with a drilling contractor and full ratification from the landowner - a large corporate agricultural group - for access/compensation.
It also has approval to send in a team to conduct non-invasive fieldwork to finalise the targets to test-drill ahead of the campaign getting underway.
The company is focused on eight prospects, with varying styles of mineralisation, including four IOCG targets. They are:
Pillar II: Zambia projects
It has five highly prospective projects in Zambia - Luanshya, Mkushi, Lumwa North/South, Mwansa, and Lusemfwa - covering around 1,050 square kilometres of an area near to operating mines and proven JORC-compliant resources under development.
The next step for its Zambia exploration plan is to prove up a JORC compliant resource within the next 12-18 months.
It plans to follow up geophysics campaign at the Mkushi project and then formulate an inaugural drilling program.
Comprehensive soil sampling will take place at Luanshya and then Lumwana N&S and Mwansa projects.
It plans to leverage the availability of high-quality geology teams at relatively low costs. The initial exploratory work will entail:
- Gathering all historic data and prioritising drill targets;
- Geological mapping concurrent with geochemical sampling and geophysical surveys; and
- Conducting ground IP/magnetic surveys over high priority targets to further delineate structures and conductive bodies for drilling
Pillar III: Cangai Copper Mine
The Cangai Copper Project in northern NSW 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.
In Far West NSW, the company has formed an equal coalition comprising Castillo, Impact Minerals and private group Squadron, which will own the largest tenement footprint surrounding the world-class Broken Hill zinc-lead-silver deposit in NSW.
Castillo will contribute its highly prospective tenure to the alliance, which complements the tenements from the two other groups.
The stakeholders are seeking a strategic partner to expedite developing the project.
