RNS Number : 8558F
Castillo Copper Limited
13 July 2023
 

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13 July 2023

 

 

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

 

Initial pit optimisation delivers A$28m NPV for Big One

 

Castillo Copper Limited (LSE and ASX: CCZ), a base metal explorer primarily focused on copper across Australia and Zambia, is pleased to announce that it has received a preliminary pit optimisation study on Big One Deposit from Entech Group1 which produced a A$28m Net Present Value ("NPV") (Figure 1).

 

HIGHLIGHTS:

 

·     The preliminary pit optimisation study - completed by Perth-based Entech Group ("Entech")1 - for the Big One Deposit, which is part of the NWQ Copper Project, delivered a $28m NPV

·     Drilling down, the study focused on the near-surface component of known mineralisation at the Big One Deposit (Mineral Resource Estimate: 2.1Mt @ 1.1% Cu for 21,886t copper metal - inferred)2 and provides significant confidence a standalone mining operation can potentially be developed

·     Key findings indicate an initially optimised pit shell could potentially deliver up to 6,266t copper (head grade: 1.42% Cu), 4,362oz silver (head grade: 0.31 g/t Ag) and 1,469t cobalt (head grade: 0.33% Co)

·     As known mineralisation is open south-west and down dip from the pit shell, there is significant potential to build on the preliminary findings and progress a mining license once a strategic development partner is secured

·     Further, there are over 20 incremental copper, gold, lead, and zinc prospects across the NWQ Copper Project that are highly prospective for copper mineralisation which potentially provide the foundations for developing a series of satellite deposits

 

Ged Hall, Chairman of Castillo Copper, said: "The Board is delighted with the findings from Entech's preliminary pit optimisation study, as it provides significant confidence a standalone mining operation can potentially be developed at Big One Deposit. More importantly, the Board believes the study's insights will be key to securing a strategic partner to progress critical development work moving forward."

 

PIT OPTIMISATION: A$28M NPV 

 

The focus of the study was on the near-surface component of known mineralisation based on the Inferred MRE at 2.1Mt at 1.1% Cu for 21,886t2 copper metal.

 

FIGURE 1: OPTIMISATION OUTCOMES - ULTIMATE PIT

Mining Diluted & Recovered Material

Units

Total/Av

Tonnes

Waste

t

          567,427

Ore

t

          441,998

Total

t

       1,009,425

Strip ratio

1:n

1.3

Grade

Copper

%

                1.42

Silver

g/t

0.31

Cobalt

%

                0.33

Metal

Copper

t

              6,266

Silver

oz

              4,362

Cobalt

t

              1,469

 



SUMMARY

Cost

Mining

$m

                  4.3

Processing

$m

                14.1

Rate

Mining

$/t ore

9.78

Processing

$/t ore

31.8

Insitu Physicals

Tonnes

t

          441,998

Cu Grade

%

1.42

Ag Grade

g/t

0.31

Co Grade

%

0.33

Source: Entech Group

 

^ Cautionary Statement:

 

The study referred to in this RNS announcement is conceptual in nature. It is a preliminary technical study to assess the potential for open pit base and precious metal mining and to assist in determining the likely size and depth of open pit mining. It is based on only JORC 2012 Inferred Resources. The study is preliminary in nature and not intended as a Feasibility Study. It should be understood by the reader that this announcement reports on preliminary outcomes of early-stage open pit optimisation works on the Big One deposit. It does not account for the capital costs of infrastructure such as power stations, access roads, dewatering, processing infrastructure, offices, camps etc, nor considers hydrogeology or geotechnical issues.

 

KEY FINDINGS

 

As shown in Figure 1 above, initially the optimised pit shell could potentially deliver up to up to 6,266t copper (head grade: 1.42% Cu), 4,362oz silver (head grade: 0.31 g/t Ag) and 1,469t cobalt (head grade: 0.33% Co). However, this is only a starting point, as with known mineralisation open south-west and down dip it can potentially be built upon with further development work.

 

The Board is optimistic these initial findings provide significant confidence a standalone mining operation can eventually be developed once a strategic development partner is secured. Incrementally, there are circa 20 known prospects across the NWQ Copper Project highly prospective for copper, gold, lead, and zinc mineralisation, which potentially provide the foundations for developing a series of satellite deposits. (Note: The NWQ Copper Project has secured "project status" with the Queensland Department of Resources (PROJ-0221) which comprises EPMs 26462, 26513, 26525, 26574, and 27440.)

 

METHODOLGY

 

In undertaking the open pit optimisation study, Castillo and Entech agreed the input assumptions summarised in Figures 2, 3 and 4.

 

FIGURE 2: OPTIMISATION INPUT ASSUMPTIONS

 

PROCESSING COSTS & ASSUMPTIONS

 Commodity Price:


A$/t

             13,024

 Commodity Price:


A$/g

1.22

 Commodity Price:


A$/t

             51,515

 Commodity Price - calculated:


A$/t (including Royalty & Payability)

             10,158

 Commodity Price - calculated:


A$/g (including Royalty & Payability)

0.59

 Commodity Price - calculated:


A$/t (including Royalty & Payability)

             25,114

 State Royalty:



                      0

 Processing Rate:


tpa

           500,000

 Processing Cost Oxide:


$/t ore

                    30

 Processing Cost Fresh:


$/t ore

                    30

 Grade Control Costs:


$/t ore

                    30

 Concentrate Grade:


Cu

15%

 Moisture Content:



8%

 Concentrate Costs:


$/wmt

                    15

 Annual Discounting:




 Payability (Cu)



80%

 Payability (Ag)



50%

 Payability (Co)



50%

 Processing recovery:




 

Cu Oxide


70%

 

Cu Fresh


88%

 

Ag Oxide


50%

 

AG Fresh


50%

 

Co Oxide


95%

 

Co Fresh


95%

Source: Entech Group

 

FIGURE 3: LOAD AND HAUL RATES PER BENCH

 

Unit Load & Haul Rates:

 Ore

 Waste

Bench 1

$/bcm

       9.23

       8.58

Bench 2

$/bcm

       9.40

       8.60

Bench 3

$/bcm

       9.57

       8.62

Bench 4

$/bcm

       9.75

       8.95

Bench 5

$/bcm

       9.92

       9.03

Bench 6

$/bcm

     10.10

       9.48

Bench 7

$/bcm

     10.27

       9.49

Bench 8

$/bcm

     10.45

       9.53

Bench 9

$/bcm

     10.62

       9.64

Bench 10

$/bcm

     10.80

       9.81

Bench 11

$/bcm

     10.97

     10.04

Bench 12

$/bcm

     11.15

     10.08

Bench 13

$/bcm

     11.32

     10.12

Bench 14

$/bcm

     11.40

     10.24

Bench 15

$/bcm

     11.44

     10.24

Bench 16

$/bcm

     11.45

     10.42

Bench 17

$/bcm

     11.47

     10.43

Bench 18

$/bcm

     11.86

     10.86

Bench 19

$/bcm

     11.92

     10.88

Bench 20

$/bcm

     11.95

     10.91

Bench 21

$/bcm

     11.89

     10.94

Bench 22

$/bcm

     12.06

     10.99

Bench 23

$/bcm

     12.05

     11.01

Bench 24

$/bcm

     12.05

     11.04

Bench 25+

$/bcm

     12.16

     11.09

Source: Entech Group

 

FIGURE 4: DRILL AND BLAST RATES PER MATERIAL TYPE

 

Unit Drill & Blast Rates:

 Ore

 Waste

Bench 1 - Oxide

$/bcm

       9.23

       8.58

Bench 2 - Fresh

$/bcm

       9.40

       8.60

 

Source: Entech Group

 

Items considered part of the open pit optimisation include the following:

·    Load and haul rates per bench RL ($/bcm mined)

·    Drill and blast rates per material type ($/bcm mined)

·    Processing costs ($/t ore):

o This included coast allocations for grade control

·    Processing (metallurgical) recoveries (%)

·    Metal payabilities (%)

 

Items that were not considered to be a part of the open pit optimisation include the following:

·    Upfront Capital:

Power Stations, Access Roads, Dewatering, Processing Infrastructure, Offices/Camps etc

·    Hydrology (No studies available)

·    Geotechnical Guidance (No studies available)

 

RESULTS

 

Open pit optimisation is a process of selecting the most profitable open pit shell that matches a group's risk profile. Risk can be managed using a variety of methods, such as using a conservative commodity price, increasing the profit margin or by selecting a smaller pit than the one that generates the maximum value.

 

Despite optimisation results generating larger NPV pit shells, by applying this selection criterion, so long as a sufficient mill feed can be maintained, then a more generous monthly net cash flow can be maintained.

 

Figure 5 graphically illustrates the outcomes for the nested pit shells resulting from the assessment of the open pit optimisation (see Figures 6 and 7 for a cross-section and plan view). The open pit optimisation was run at an input copper price of A$13,024/t.

 

FIGURE 5: OPTIMISATION OUTPUTS

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Source: Entech Group

 

FIGURE 6: SECTION THROUGH RF 1 SHELL FOR THE BIG ONE OPTIMISATION

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Note: Resource model filtered to NSR>10

Source: Entech Group

 

 

FIGURE 7: PLANVIEW OF RF 1 SHELL FOR THE BIG ONE OPTIMISATION

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Note: Resource model filtered to NSR>10

Source: Entech Group


For further information, please contact:  

 

Castillo Copper Limited  

+61 8 6558 0886  

Dr Dennis Jensen (Australia), Managing Director  

Gerrard Hall (UK), Chairman  

 

 

 

SI Capital Limited (Financial Adviser and Corporate Broker)  

+44 (0)1483 413500  

Nick Emerson  

 


 

Gracechurch Group (Financial PR)

+44 (0)20 4582 3500

Harry Chathli, Alexis Gore, Henry Gamble 

 

 

 

About Castillo Copper  

 

Castillo Copper Limited is an Australian-based explorer primarily focused on copper across Australia and Zambia. The group is embarking on a strategic transformation to morph into a mid-tier copper group underpinned by its core projects:  

 

·    A large footprint in the Mt Isa copper-belt district, north-west Queensland, which delivers significant         exploration upside through having several high-grade targets and a sizeable untested anomaly within         its boundaries in a copper-rich region.  

·    Four high-quality prospective assets across Zambia's copper-belt which is the second largest copper           producer in Africa.  

·    A large tenure footprint proximal to Broken Hill's world-class deposit that is  prospective  for  zinc-    silver- lead-copper-gold and platinoids.  

·    Cangai Copper Mine in northern New South Wales, which is one of Australia's highest grading historic         copper mines.  

 

The group is listed on the LSE and ASX under the ticker "CCZ."  

 

Competent Person's Statement

 

The information in this report that relates to Exploration Results for "BHA Project, East Zone" is based on information compiled or reviewed by Mr Mark Biggs. Mr Biggs is a director of ROM Resources, a company which is a shareholder of Castillo Copper Limited.  ROM Resources provides ad hoc geological consultancy services to Castillo Copper Limited.  Mr Biggs is a member of the Australian Institute of Mining and Metallurgy (member #107188) and has sufficient experience of relevance to the styles of mineralisation and types of deposits under consideration, and to the activities undertaken, to qualify as a Competent Person as defined in the 2012 Edition of the Joint Ore Reserves Committee (JORC) Australasian Code for Reporting of Exploration Results, and Mineral Resources. Mr Biggs holds an AusIMM Online Course Certificate in 2012 JORC Code Reporting. Further, Mr Biggs consents to the inclusion in this report of the matters based on information in the form and context in which it appears.

 

References

1)        Entech Mining. Available at: https://entechmining.com.au

2)        CCZ ASX Release - 28 February 2022

 

 

APPENDIX A:  NWQ COPPER PROJECT

 

FIGURE A1 NWQ COPPER PROJECT RELATIVE TO PEERS

 

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Source: CCZ geology team

FIGURE A2: PROSPECTS WITHIN NWQ COPPER PROSPECT

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Source: CCZ geology team

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