June 2024 Quarterly Activities Report

Castillo Copper Limited

30 July 2024

 

30 July 2024

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

June 2024 Quarterly Activities Report

Castillo Copper Limited (LSE and ASX: CCZ), a base metal explorer primarily focused on copper across Australia and Zambia, is pleased to present its latest quarterly report for the period 1 April 2024 to 30 June 2024.

HIGHLIGHTS:

Big One Deposit Surface Sampling Campaign Revealed¹

·    Comprehensive three-day surface sampling campaign devised, concentrating on eight areas across the Big One Deposit with historical anomalous surface copper and/or high conductivity zones.

·    Campaign was developed with reference to an Induced Polarisation (IP) survey undertaken by Castillo in 2020, which evidenced:

o  Significant incremental copper mineralisation along north-trending fault structures, rather than within the trachyte dyke, and

o  Significant untested bedrock conductor north of the line of lode, materially larger than the high-grade anomaly drilled in 2020. 

Strategic Asset Portfolio Review - Additional Resolutions²

·    Board committed to advancing the NWQ Copper Project, which has > 20 known prospects, and in the context of a copper bull market.

·    Strategic partners being sought to develop remaining assets in NSW and Zambia.

Cash and Liquid Investments

·    Cash on hand at end of quarter totalled $1.118 million.

·    Rehabilitation Security Bonds totalled $486,960, of which $172,900 is expected to be converted to cash within 1 month.

·    Castillo holds 13,440,861 Rimfire Pacific Mining Ltd (ASX: RIM) shares which as at 28 June 2024 had a market value of ~$376,000.         

Eduardo Robaina, Non-executive Director, commented: "We're tracking well against the reinvigorated strategy that was devised by the Board at the end of 2023, where it was unanimously agreed that the Company's focus would prioritise the development of the NWQ Copper Project. This, in turn, resulted in the determination that our remaining assets - deemed non-core - should be either divested or pursued as a Joint Venture.

"In Q1, to put this strategy in motion, we divested ourselves of two of our four tenements at the Broken Hill Project. Furthermore, in this latest Quarter, we announced a soil sampling campaign that would reconcile past results and help to inform future drilling programs at our flagship NWQ Copper Project."

PAST WORK AT BIG ONE PROVES DEVELOPMENT POTENTIAL OF PROSPECT

The Big One Deposit has long been a prospect of interest. In 2022, the Company delivered a maiden, JORC 2012 compliant Mineral Resource Estimate (MRE)³ of 2.1Mt @ 1.1% Cu for 21,886t contained metal, which included the following high grade drilling results:⁴

·    40m @ 1.64% from surface incl: 11m @ 4.40% from 24m, 5m @ 7.34% from 28m and 1m @ 16.65% from 29m (BO_303RC)

·    44m @ 1.19% Cu from surface incl: 14m @ 3.55% from 27m, 3m @ 10.88% from 27m and 1m @ 12.6% from 37m (BO_301RC)

FOCUS AREA OF CAMPAIGN DEFINED

Non-Executive Director and Chief Geologist, Joel Logan, devised a targeted soil sampling campaign; covering eight highly prospective areas across the Big One Deposit - north and south of the 1,200m line of lode (Figure 1).

FIGURE 1: BIG ONE DEPOSIT LINE OF LODE AND FOCUS AREAS FOR CAMPAIGN

RATIONALE FOR CAMPAIGN PARAMETERS

A previous IP survey undertaken by Castillo in 2020, comprised six lines ranging from 500-700m long and spaced 200m apart over the 1,200m line of lode.

FIGURE 2: LINE LOCATIONS TRANSVERSING BIG ONE DEPOSIT

The 2020 IP survey interpretations at the time suggested that there was a significant untested bedrock conductor north of the line of lode that was materially larger than the high-grade anomaly drilled in 2020 (Figure 2).

Further, interpretations from surface sampling implied that there was incremental copper mineralisation along north-trending fault structures, rather than constrained within the trachyte dyke.

FIGURE 3: LINE 3, NEWLY IDENTIFIED BEDROCK CONDUCTORS

GOSSAN FORMATIONS REQUIRING FURTHER ASSESSMENT

Based on historical surface observations, ~200m north of the line of lode is a sizable, potential mineralised gossan that has been identified for thorough assessment for its underlying copper potential.

Gossan formations are known to act as a 'marker' for subsurface ore deposits, and are generally observed as rock that is intensely oxidised, decomposed or weathered in appearance.

PURPOSE OF CAMPAIGN

The Scope of Work is designed to progress and/or enable the following developments:

·    Detailed geological mapping across the eight zones.

·    Soil and/or rock chip sampling.

·    Reconnaissance of potential future RC and diamond core sites.

·    Explore magnetic susceptibility and pXRF measurements on any soil or rock chip samples collected.

·    Record any other pertinent geological observations while in the field.

METHOD TO DETERMINE THE NEXT STEPS

The process following the three-day Soil Sampling Campaign is as follows:

·    All samples to be sent to the laboratory for assaying.

·    Once the full suite of geochemical results is returned, Castillo will reconcile results with historical observations / 2020 IP survey.

·    Castillo will then devise high conviction test-drill targets to potentially extend known mineralisation north of the line of lode.

Cash and Liquid Investments

Cash on Hand

Cash on hand at end of quarter totalled $1.118 million.

Rehabilitation Security Bonds

Rehabilitation Security Bonds totalled $486,960 at quarter end, of which $172,900 is expected to convert to cash within 1 month.

Listed Investments

Castillo holds 13,440,861 Rimfire Pacific Mining Ltd (ASX: RIM) shares which as at 28 June 2024 had a market value of ~$376,000.

R&D Tax Incentive

An income tax refund of $182,756 due to the R&D Tax Incentive claim by Castillo is expected to be received within 2 months.

Information Required Under ASX Listing Rules

1. ASX LR 5.3.5

During the Quarter $72,000 was paid to related parties of the Company relating to non-executive director fees and exploration consulting fees paid to an entity controlled by a related party.

2. ASX LR 5.3.1

A summary of the exploration expenditure incurred during the quarter is set out below:

Table 1: Summary of Exploration Expenditure

Asset	Consulting Fees	Rates and Mines Department Fees	Other
Cangai	$1,000	$1,000	-
Broken Hill	$1,000	-	-
NWQ (Mt Isa)	$4,000	$2,000	-
Zambia	-	-	-
Totals	$6,000	$1,000	-

3. ASX LR 5.3.3

In accordance with ASX Listing Rule 5.3.3, a schedule of Company's tenements as at 30 June 2024 can be found at Appendix B.

For further information, please contact:  

Castillo Copper Limited	[phone]
Gerrard Hall (UK), Chairman
SI Capital Limited (Financial Adviser and Corporate Broker)	[phone]
Nick Emerson
Gracechurch Group (Financial PR)	[phone]
Harry Chathli, Alexis Gore, Henry Gamble

References

1)                  CCZ ASX Release - 27 May 2024

2)                  CCZ ASX Release - 14 May 2024

3)                  CCZ ASX Releases - 1 June 2022

4)                  CCZ ASX Releases - 14 January 2020, 11 January 2021, 10 February 2021

About Castillo Copper  

Castillo Copper Limited is an Australian-based, Australian-focussed copper exploration Company with a strategy to develop multi-commodity assets that demonstrate future potential as an economic mining operation.

Through the application of disciplined and structured exploration and analysis, Castillo Copper has identified assets deemed core to the Company's sustained growth and is actively progressing these interests up the value curve.

Current focus will be on advancing exploration activity at the Company's wholly owned NWQ Project, situated in the copper-belt district approximately 150km north of Mt Isa in north-west Queensland.

Other interests include the Broken Hill Project in western New South Wales and the Cangai Copper Mine in north-east New South Wales, as well as exploration targets in Zambia.

Castillo Copper is listed on the LSE and ASX under the ticker "CCZ".

APPENDIX A: Key Projects

Figure 1: BHA Project, Broken Hill Region (Source: CCZ Geology Team)

Figure 2: Zambia Copper-Belt Projects (Source: CCZ Geology Team)

Figure 3: Historic drilling results in SYG's Mining Lease (Source: Refer to CCZ ASX Release 11 November 2019)

Figure 4: NWQ Copper Project, Mt Isa Region (Source: CCZ Geology Team)

APPENDIX B: Interest in mining tenements held

Table 1: Jackaderry (Cangai), New England Orogen in NSW

Tenement ID	Ownership at start of Quarter	Ownership at end of Quarter	Change during the Quarter
EL8635	100%	100%	-
EL8625	100%	100%	-
EL8601	100%	100%	-

Table 2: Broken Hill, located within a 20km radius of Broken Hill in NSW

Tenement ID	Ownership at start of Quarter	Ownership at end of Quarter	Change during the Quarter
EL8434	100%	100%	-
EL8435	100%	100%	-

Table 3: Mt Oxide, Mt Isa region in North West Queensland

Tenement ID	Ownership at start of Quarter	Ownership at end of Quarter	Change during the Quarter
EPM 26513	100%	100%	-
EPM 26525	100%	100%	-
EPM 26574	100%	100%	-
EPM 26462	100%	100%	-
EPM 27440	100%	100%	-

Table 4: Zambia

Tenement ID	Ownership at start of Quarter	Ownership at end of Quarter	Change during the Quarter
24659-HQ-LEL (Mkushi)	100%	100%	100%

Appendix 5B

Mining exploration entity or oil and gas exploration entity
quarterly cash flow report

Name of entity
Castillo Copper Ltd
ABN		Quarter ended ("current quarter")
52 137 606 476		30 June 2024

Consolidated statement of cash flows		Current quarter $A'000	Year to date (12 months) $A'000
1.	Cash flows from operating activities
1.1	Receipts from customers
1.2	Payments for
	(a)   exploration & evaluation
	(b)   development
	(c)   production
	(d)   staff costs
	(e)   administration and corporate costs	(249)	(1,205)
1.3	Dividends received (see note 3)
1.4	Interest received	5	32
1.5	Interest and other costs of finance paid
1.6	Income taxes paid
1.7	Government grants and tax incentives
1.8	Other (provide details if material)
1.9	Net cash from / (used in) operating activities	(244)	(1,173)
2.	Cash flows from investing activities
2.1	Payments to acquire or for:
	(a)   entities
	(b)   tenements
	(c)   property, plant and equipment
	(d)   exploration & evaluation	(7)	(567)
	(e)   investments
	(f)    other non-current assets
2.2	Proceeds from the disposal of:
	(a)   entities
	(b)   tenements
	(c)   property, plant and equipment
	(d)   investments
	(e)   other non-current assets
2.3	Cash flows from loans to other entities
2.4	Dividends received (see note 3)
2.5	Other (provide details if material)	(10)	(38)
2.6	Net cash from / (used in) investing activities	(17)	(605)
3.	Cash flows from financing activities
3.1	Proceeds from issues of equity securities (excluding convertible debt securities)
3.2	Proceeds from issue of convertible debt securities
3.3	Proceeds from exercise of options
3.4	Transaction costs related to issues of equity securities or convertible debt securities
3.5	Proceeds from borrowings
3.6	Repayment of borrowings
3.7	Transaction costs related to loans and borrowings
3.8	Dividends paid
3.9	Other (provide details if material)
3.10	Net cash from / (used in) financing activities	-	-
4.	Net increase / (decrease) in cash and cash equivalents for the period
4.1	Cash and cash equivalents at beginning of period	1,387	2,897
4.2	Net cash from / (used in) operating activities (item 1.9 above)	(244)	(1,173)
4.3	Net cash from / (used in) investing activities (item 2.6 above)	(17)	(605)
4.4	Net cash from / (used in) financing activities (item 3.10 above)	-	-
4.5	Effect of movement in exchange rates on cash held	(8)	(1)
4.6	Cash and cash equivalents at end of period	1,118	1,118

5.	Reconciliation of cash and cash equivalents at the end of the quarter (as shown in the consolidated statement of cash flows) to the related items in the accounts	Current quarter $A'000	Previous quarter $A'000
5.1	Bank balances	718	987
5.2	Call deposits	400	400
5.3	Bank overdrafts
5.4	Other (provide details)
5.5	Cash and cash equivalents at end of quarter (should equal item 4.6 above)	1,118	1,387

6.	Payments to related parties of the entity and their associates	Current quarter $A'000
6.1	Aggregate amount of payments to related parties and their associates included in item 1	701
6.2	Aggregate amount of payments to related parties and their associates included in item 2	22
1Comprises director's fees for the quarter. 2Comprises exploration expenditure paid to Field Crew Pty Ltd, a related entity of former director David Drakeley.

7.	Financing facilities Note: the term "facility' includes all forms of financing arrangements available to the entity. Add notes as necessary for an understanding of the sources of finance available to the entity.	Total facility amount at quarter end $A'000	Amount drawn at quarter end $A'000
7.1	Loan facilities
7.2	Credit standby arrangements
7.3	Other (please specify)
7.4	Total financing facilities
7.5	Unused financing facilities available at quarter end
7.6	Include in the box below a description of each facility above, including the lender, interest rate, maturity date and whether it is secured or unsecured. If any additional financing facilities have been entered into or are proposed to be entered into after quarter end, include a note providing details of those facilities as well.

8.	Estimated cash available for future operating activities	$A'000
8.1	Net cash from / (used in) operating activities (item 1.9)	(244)
8.2	(Payments for exploration & evaluation classified as investing activities) (item 2.1(d))	(7)
8.3	Total relevant outgoings (item 8.1 + item 8.2)	(251)
8.4	Cash and cash equivalents at quarter end (item 4.6)	1,118
8.5	Unused finance facilities available at quarter end (item 7.5)
8.6	Total available funding (item 8.4 + item 8.5)	1,118
8.7	Estimated quarters of funding available (item 8.6 divided by item 8.3)	4.5
	Note: if the entity has reported positive relevant outgoings (ie a net cash inflow) in item 8.3, answer item 8.7 as "N/A". Otherwise, a figure for the estimated quarters of funding available must be included in item 8.7.
8.8	If item 8.7 is less than 2 quarters, please provide answers to the following questions:
	8.8.1     Does the entity expect that it will continue to have the current level of net operating cash flows for the time being and, if not, why not?
	Answer: N/A
	8.8.2     Has the entity taken any steps, or does it propose to take any steps, to raise further cash to fund its operations and, if so, what are those steps and how likely does it believe that they will be successful?
	Answer: N/A
	8.8.3     Does the entity expect to be able to continue its operations and to meet its business objectives and, if so, on what basis?
	Answer: N/A
	Note: where item 8.7 is less than 2 quarters, all of questions 8.8.1, 8.8.2 and 8.8.3 above must be answered.

Compliance statement

1        This statement has been prepared in accordance with accounting standards and policies which comply with Listing Rule 19.11A.

2        This statement gives a true and fair view of the matters disclosed.

Date:                30 July 2024

Authorised by:  The Board of Directors

(Name of body or officer authorising release - see note 4)

Notes

1.          This quarterly cash flow report and the accompanying activity report provide a basis for informing the market about the entity's activities for the past quarter, how they have been financed and the effect this has had on its cash position. An entity that wishes to disclose additional information over and above the minimum required under the Listing Rules is encouraged to do so.

2.          If this quarterly cash flow report has been prepared in accordance with Australian Accounting Standards, the definitions in, and provisions of, AASB 6: Exploration for and Evaluation of Mineral Resources and AASB 107: Statement of Cash Flows apply to this report. If this quarterly cash flow report has been prepared in accordance with other accounting standards agreed by ASX pursuant to Listing Rule 19.11A, the corresponding equivalent standards apply to this report.

3.          Dividends received may be classified either as cash flows from operating activities or cash flows from investing activities, depending on the accounting policy of the entity.

4.          If this report has been authorised for release to the market by your board of directors, you can insert here: "By the board". If it has been authorised for release to the market by a committee of your board of directors, you can insert here: "By the [name of board committee - eg Audit and Risk Committee]". If it has been authorised for release to the market by a disclosure committee, you can insert here: "By the Disclosure Committee".

5.          If this report has been authorised for release to the market by your board of directors and you wish to hold yourself out as complying with recommendation 4.2 of the ASX Corporate Governance Council's Corporate Governance Principles and Recommendations, the board should have received a declaration from its CEO and CFO that, in their opinion, the financial records of the entity have been properly maintained, that this report complies with the appropriate accounting standards and gives a true and fair view of the cash flows of the entity, and that their opinion has been formed on the basis of a sound system of risk management and internal control which is operating effectively.

 

END