03 October 2023

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION AS STIPULATED UNDER THE UK VERSION OF THE MARKET ABUSE REGULATION NO 596/2014 WHICH IS PART OF ENGLISH LAW BY VIRTUE OF THE EUROPEAN (WITHDRAWAL) ACT 2018, AS AMENDED.  ON PUBLICATION OF THIS ANNOUNCEMENT VIA A REGULATORY INFORMATION SERVICE, THIS INFORMATION IS CONSIDERED TO BE IN THE PUBLIC DOMAIN.

 

CASTILLO COPPER LIMITED

("Castillo" or the "Company")

 

Final Results

 

Publication of Annual Report

 

Castillo Copper Limited (LSE and ASX: CCZ), a base metal explorer primarily focused on copper across Australia and Zambia, announces its financial results for the year ended 30 June 2023.

 

Annual Address

 

Dear Shareholders,

 

Challenges thrown up by the external environment in FY2023 - rapid increase in interest rates to combat inflation, ongoing war in Ukraine, pedestrian commodity prices and subdued equity markets - forced the Board to undertake thorough due diligence before making decisions.

 

The Board's core theme, which remains a constant moving forward, is to align with strategic development partners to optimise the value creating potential from the current asset portfolio. Further, the Board will consider any outright offer to acquire one of the assets based on its merits.

 

Reflecting on FY2023, extremely weak stock market conditions in the UK resulted in London-based Metallea Group not proceeding with plans to acquire the Zambia Copper Projects. However, the Board has committed to further exploratory work and re-doubled efforts to align with a new strategic development partner.

 

In Australia, solid progress was made advancing the three projects, summarised as follows:

 

·     East Zone, BHA Project (NSW): Post defining a JORC compliant inferred cobalt resource from legacy data (64Mt @ 318 ppm Co for 21,556t), the Board commissioned a 2,000m drilling campaign.

 

The surprise upshot from this campaign was the discovery of a significant shallow rare earth element system proximal to the Fence Gossan, Reef and Tors Tank Prospects.

 

While initial metallurgy samples were inconclusive, the Board is investigating trialling several alternate metallurgical test-work techniques to improve extraction results.

 

·      NWQ Copper Project (QLD): Metallurgical test-work undertaken on samples from the Big One Deposit to produce a concentrate were encouraging, with upgrades ranging from 5-10x copper metal. Further, combined with a JORC compliant inferred Mineral Resource Estimate - 2.1Mt @ 1.1% Cu for 21,886kt copper metal - and known targets to test-drill, the Big One Deposit offers significant exploration potential.

 

More broadly, across the NWQ Copper Project are over 20 incremental under explored prospects that are highly prospective for copper mineralisation which potentially provide the foundations for developing a series of satellite deposits.

 

·      Cangai Copper Mine (NSW): Post the review period, the geology team produced an updated JORC compliant inferred Mineral Resource Estimate at 4.4Mt @ 2.5% Cu and 0.2Mt @ 1.35% Cu indicated from historic stockpiles for ~114kt contained copper metal.

 

Ged Hall 

Chairman

 

Dennis Jensen

Managing Director

 

 

 

For further information, please contact:  

 

 

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."  

 

Annual Report and Accounts

 

The Company's Annual Report and Accounts is available on the Company's website at: https://castillocopper.com/investors/

 

RESULTS OF OPERATIONS

 

The net loss of the Group for the year after income tax was $6,942,228 (2022: $1,653,183) and the net assets of the Group at 30 June 2023 were $12,071,269 (2022: $19,012,138).

 

DIVIDENDS

 

No dividend was paid or declared by the Group during the year and up to the date of this report.

 

CORPORATE STRUCTURE

 

Castillo Copper Limited is a company limited by shares that is incorporated and domiciled in Australia.

 

NATURE OF OPERATIONS AND PRINCIPAL ACTIVITIES

 

During the financial year, the principal activity of the Group was mineral exploration and examination of new resource opportunities. The Group currently holds copper projects in Queensland and New South Wales in Australia as well as copper projects in Zambia.

 

EMPLOYEES

 

Other than the Directors, the Group had no employees at 30 June 2023 (2022: Nil).

 

REVIEW OF OPERATIONS

 

During the financial year, the principal activity of the group was mineral exploration primarily focused on copper, cobalt and rare earth elements ("REE") projects in Australia and Zambia.

 

East Zone, BHA Project, NSW

 

On 2 August 2022, metallurgical test-work on BH1 drill-core extracted from The Sisters Prospect - BHA Project's East Zone - delivered excellent beneficiation results for cobalt and, surprisingly, copper-gold - with the best outcomes:

 

·      Cobalt: 200ppm head-grade up to 2,500ppm post-test-work; 12x upgrade.

·      Copper: 520ppm head-grade up to 16,000ppm (1.6%) post-test-work; 30x upgrade.

·      Gold: 0.02g/t Au head-grade up to 3.87g/t Au post-test-work; >190x upgrade.

 

Pleasingly, the metallurgical test-work showed that cobalt-copper-gold liberated easily from BH1 drill-core samples to produce a potentially viable concentrate. Further, the original BH1 drill-core the samples were extracted from comprised:

 

24m @ 424ppm Co from 103m including 2m @ 1,120ppm Co from 107m; 1m @ 873ppm Cofrom 120m; and 2m @ 486ppm Co from 125m (BH1)

 

Moving forward, the Board's primary focus for the East Zone is to increase the confidence in the current inferred Mineral Resource Estimate which stands at 21,556t cobalt (64Mt @ 318 ppm Co) and 44,260t copper (63Mt @ 0.07% Cu).

 

On 9 August 2022, targets were finalised for the drilling campaign at the East Zone which comprised one diamond core and 17 RC drill-holes for 2,100m, with depths ranging from 100m to 160m.

 

Of these, two drill-holes were earmarked for The Sisters, with the balance across Fence Gossan, Reefs & Tors Tanks Prospects.

 

Notably, for the Fence Gossan, Reefs & Tors Tanks Prospects, the campaign was designed to penetrate deep enough to intersect two lower cobalt-rich zones that were interpreted to host higher grade mineralisation than had been modelled.

 

On 31 August 2022, two key contractors were appointed:

 

·      AllState Drilling's team to perform the campaign; and

·      FieldCrew to manage day-to-day aspects of the drilling campaign.

 

In addition, with Australia securing preferred status for the supply of critical minerals to the USA's electric vehicle battery program, the Board determined it necessary to deepen its understanding of the East Zone's REE potential at two targets:

 

·      The Sisters Prospect: both RC drill-holes were analysed for copper-cobalt-gold and REEs; and

·      Iron Blow: having already confirmed the presence of REEs, the geology team tested additional drill- core samples from the core library to determine if there are further extensions to known mineralisation.

 

On 3 October 2022, after approval was secured from the New South Wales Resources Regulator, a four-week long drilling campaign at the East Zone commenced across four prospects (Figure 1 & 2).

 

 

FIGURE 1: PROPOSED DRILLING CAMPAIGN BHA PROJECT EAST ZONE

 

Source: CCZ geology team

 

FIGURE 2: DRILLING UNDERWAY AT BHA PROJECT'S EAST ZONE

 

Location:6460000mN, 570000mE

Source: CCZ geology team

 

On 12 October 2022, four drill-holes for 488m were completed at the Tors Tank Prospect which delivered encouraging initial observations, including:

 

·      All four drill-holes hit targeted cobalt mineralisation zones, evidenced by intersecting sequences comprising clay, amphibolite, schist, and gneiss;

·      Qualitative logging identified multiple disseminated sulphide layers (mostly pyrite), up to 12m thick, associated with amphibolite layers that can potentially host cobalt mineralisation;

·      Field XRF observations, subject to final assay results, indicated the presence of cobalt mineralisation within these amphibolite zones; and

·      The intersected geology was interpreted to be consistent with observations by previous explorers, including Broken Hill North, across the 1970-80s.

 

In addition, proximal to the amphibolite layers, there are significant magnetite-rich zones - associated with pegmatite up to 14m thick - that potentially hosts REEs. Notably, this interpretation was based on recently re-assayed diamond core from drill-hole DD90_IB3 at the Iron Blow Prospect which returned up to 1,270ppm TREO.

 

On 24 October 2022, four drill-holes for a total of 516m were completed at the Fence Gossan Prospect, with positive initial observations comparable to the Tors Tank Prospect:

 

·      Targeted cobalt mineralisation zones were hit across the four drill-holes, as sequences intersected comprised clay, amphibolite, schist and gneiss;

·      Numerous disseminated sulphide layers (mostly pyrite linked to amphibolite), up to 17m thick, were logged which could potentially host cobalt mineralisation; and

·      Interpreting the intersected geology suggests it is consistent with observations noted by North Broken Hill in the 1970-80s, while XRF field observations (subject to final assays) indicated cobalt mineralisation is apparent.

 

Similar to the Iron Blow Prospect, there are significant magnetite-rich zones - associated with pegmatite up to 19m thick - which potentially hosts REEs.

 

On 31 October 2022, after reconciling geochemical and geophysical data for the Iron Blow Prospect, several viable targets were selected for drill-testing with significant exploration potential. These findings were based on a re- interpretation of geophysical campaigns from 2000, 2001 and 2017 which identified several significant bedrock conductors that could host mineralisation.

 

The primary focus is REEs since diamond core assays from drill-hole DD90_1B3 (sourced from the core library) returned positive readings - on a cumulative basis - over 35m, with the best intersections:

 

·      8m @ 1,460ppm TREO from 150m

·      12m @ 297ppm TREO from 199m

·      6.4m @ 290ppm TREO from 189m

·      4.8m @ 311ppm TREO from 232m

 

On 15 November 2022, assays from seven drill-holes across the Fence Gossan and Tors Tank Prospects, confirmed a significant shallow clay-hosted REE discovery - up to 2,410ppm TREO, with high-value Magnet REOs representing up to 29.9% of the grade - the best intercepts are highlighted in Figure 3 below:

 

Source: CCZ geology team

 

Of significance, the assays for FG_002-4RC delineated an initial 800m strike event starting near Fence Gossan's eastern boundary. Moreover, with REE mineralisation open in all directions, and Fence Gossan circa 4km long by 1km wide (W-E), the Board ordered follow up geological mapping, sampling and auger drilling to target extending the known strike event to the west.

 

The new REE discovery has pivoted the Board's strategic focus for the current drilling campaign and beyond to fully understanding the extent of REE mineralisation across the East Zone.

 

On 23 November 2022, new assays for RT_001RC and FG_001RC were positive for TREO, confirming REEs are more widely apparent across the East Zone than initially envisaged - the best intercepts comprise:

 

·      11m @ 1,078 TREO from 8m (RT_001RC)

·      20m @ 609ppm TREO from surface incl. 4m @ 1,709ppm REO from 8m (FG_001RC)

·      11m @ 862ppm TREO from 58m (FG_001RC)

 

More significantly, all the assays returned to date from Fence Gossan, Tors Tank and Reefs Tank highlight the REE mineralisation discovered is extensive and shallow.

 

On 20 December 2022, following the receipt of drill assays for the Fence Gossan, Tors Tank and partly Reefs Tank Prospects, which confirmed that shallow REE mineralisation is widely apparent, the Board commissioned an extensive auger sampling campaign.

 

Encouragingly, the auger sampling campaign, which covered a 6.5km2area proximal to the Fence Gossan Prospect, was designed to identify the full extent of REE mineralisation and new targets to test-drill.

 

All samples were sent to the laboratory for further analysis, with subsequent interpretation charting the next phase of REE-focused exploration across the East Zone.

 

On 15 February 2023, the assay results for diamond core from TT_005DD (Figure 4) - undertaken at the Tors Tank Prospect - significantly boosted confidence in the shallow, clay-hosted, REE discovery, with the best intercept:

 

·      13m @ 1,550ppm Total Rare Earth Oxides (TREO) from 5m

 

FIGURE 4: TORS TANK DIAMOND CORE FROM 5.3-11.8M (TT_OO5DD)

Source: CCZ geology team

Notably, high value Magnetic REO (Nd+Pr+Dy+Tb) represented an exceptional 38.9% of the TREO grade vs 25% peer average.

 

Re-assays of 4m composite samples at Tors Tank & Fence Gossan to 1m provided greater clarity on the underlying geology, whilst delivering further evidence of an extensive, shallow REE mineralisation system - the best intercepts comprise:

 

·      17m @ 1,605ppm TREO from 2m and 1m @ 3,236 TREO from 19m (FG_003RC)

·      10m @ 1,013ppm TREO from 49m (FG_001RC)

·      6m @ 1,480ppm TREO from 7m (FG_004RC)

·      5m @ 1,598ppm TREO from 14m (TT_002RC)

·      4m @ 1,342ppm TREO from 28m (FG_004RC)

·      2m @ 3,491ppm TREO from 7m (TT_003RC)

 

Assays for circa 70% of the recent hand auger surface sampling campaign across Fence Gossan delineated a sizeable

 

4.5km2anomalous area for REE mineralisation. Notably, a preliminary interpretation suggests there are several more prime targets to test-drill that could potentially extend known mineralisation between the Fence Gossan and Tors Tank Prospects.

 

On 13 April 2023, specialist consultant, ANSTO, was appointed to undertake comprehensive metallurgical test-work on six samples from Fence Gossan, Reefs and Tors Tanks Prospects to understand the potential to extract REE from shallow clay zones.

The scope of work focused on characterising REE leachability from the six samples which comprise fresh pegmatite to highly weathered clay, especially with Magnetic Rare Earth Oxide (MREO) grades ranging from 362-603ppm.

 

This was an important step towards advancing the viability of the East Zone's REE potential and securing interest from prospective development partners, especially given the extent of high-value MREO (Nd+Pr+Dy+Tb) within the system.

 

On 14 June 2023, specialist consultant, ANSTO, produced the following preliminary findings from metallurgical test- work performed on six samples from the Fence Gossan, Reefs, and Tors Tanks Prospects:

 

·      The Total Rare Earth Element plus Yttrium (TREY) grades for the six samples ranged from 227 to 1,632 ppm TREY;

·      The proportion of high-value Magnetic Rare Earth Oxides (MREO; Nd+Pr+Dy+Tb) to Total REO (TREO) across the six samples ranged from 22% to 27%; and

·      The best TREY extraction, using a direct leach process at pH 1, was 30%

 

The Board is reviewing next steps, including trialing alternate leach tests proposed by ANSTO to improve extraction results.

 

NWQ Copper Project, Queensland

 

On 19 July 2022, preliminary metallurgical test-work on samples extracted from drill-hole BO_318RC1 at the Big One Deposit produced a concentrate (Figure 5) with confirmed upgrades ranging from 5x to 10x for copper metal. The best result for copper comprised: 0.72% head-grade to 7.2% post-test-work.

 

Further test-work is underway on samples from the Big One Deposit to determine the final optimal results. Notably, this is an important proof of concept and de-risking exercise as part of the Board's strategic intent to secure a processing agreement.

 

FIGURE 5: METALLURGICAL TESTING - FROTHER PRODUCT EXAMPLE

Source: ALS Metallurgy, Perth, Western Australia

 

On 23 January 2023, following a review of prospects at the NWQ Copper Project, CCZ's geology team visited several prospects - including Big One, Arya and Valparaisa - to identify new drill targets.

 

The initial focus was on the Big One, which has an inferred MRE of 2.1Mt @ 1.1% Cu for 21,886kt copper metal post- two drilling campaigns across 2020-21. Moreover, factoring in a large conductor north of the line of lode, plus reconciling available geophysics and geochemical data, CCZ's geological consultant set an Exploration Target that ranges from 2-6Mt @ 0.6-1% Cu for 12-60kt copper metal.

 

Cautionary Statement: It should be noted that the Exploration Target tonnage range quoted above are conceptual in nature and there has been insufficient exploration to define a copper resource. Although a preliminary analysis was undertaken, insufficient data exists to confidently correlate mineralised horizons within the Exploration Target area. It is uncertain whether further exploration may lead to the reporting of a JORC-standard resource, however, there is some evidence to support the current exploration tonnage calculations, and the sufficient mineralised thicknesses interpreted from historical drilling to warrant further investigation in some areas.

The Valparaisa Prospect comprises copper mineralisation across two horizons over a 6km strike event, with the interaction of two intersecting faults suggesting a structurally controlled copper system that can potentially be drill- tested.

 

At the Arya Prospect, there is a significant magnetic anomaly, south of a known graphite system (test drilled in late 2021), that shows potential to be a primary source of copper mineralisation.

 

On 20 February 2023, CCZ's Board approved plans to assess optimising the Big One Deposit via implementing the following:

 

·      Commissioning an independent engineering contractor to conduct a pit optimisation study on the viability of commencing copper mining operations, utilising prospective third-party processors and effective path to market.

·      Re-formulating optimal plans for a third drilling campaign and companion geophysical surveys to extend known mineralisation beyond the line of lode.

 

Previous drilling campaigns have demonstrated the Big One Deposit remains highly prospective for copper mineralisation, with the best intercepts comprising:

 

·      40m @ 1.64% Cu from surface incl: 11m @ 4.40% Cu from 24m, 5m @ 7.34% Cu from 28m & 1m @ 16.65% Cu from 29m (303RC)

·      44m @ 1.19% Cu from surface incl: 14m @ 3.55% Cu from 27m, 3m @ 10.88% Cu from 37m & 1m @ 12.6% Cu from 37m (301RC)

·      34m @ 1.51% Cu from surface incl: 21m @ 2.25% Cu from surface, 12m @ 3.44% Cu from 3m, 6m @ 4.79% Cu from 3m and 1m @ 9.4% Cu from 9m (B0017)

 

On 28 March 2023, CCZ appointed Entech Mining to undertake a pit optimisation and mine design study for the Big One Deposit. If the findings are positive then next steps comprise determining the optimal path to market and effective use of third-party processors.

 

Concurrently, work can focus on capitalising on Big One Deposit's exploration potential via drill-testing known targets north of the line of lode.

 

On 13 July 2023 the Board received the preliminary pit optimisation study for the Big One Deposit.

 

Drilling down, the study focused on the near-surface component of known mineralisation at the Big One Deposit and provided significant confidence a standalone mining operation could 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.

 

Cangai Copper Mine

 

On 9 March 2023, following a site visit to Cangai Copper Mine by geologist and director David Drakeley, the Board approved plans to update and enhance the confidence in the 2017 inferred JORC MRE - 107,589t contained copper metal (3.2Mt @ 3.35%).

 

Considerable drilling work post-2017, which includes 34 RC drill-holes for a total of circa 5,000m are to be factored into the updated geological model - the best intercepts from these campaigns comprised:

 

·    11m @ 5.94% Cu; 2.45% Zn & 19.13g/t Ag from 40m including:

 

o  3m @ 8.1% Cu; 2.84% Zn & 23.42g/t Ag from 41m

o  1m @ 10.25% Cu; 1.68% Zn & 32.50g/t Ag from 48m

o  1m @ 7.53% Cu; 6.04% Zn & 30.60g/t Ag from 50m (CC0023R)

 

•        5m @ 1.56% Cu, 4.43g/t Ag & 0.4% Zn  from 92m including:

 

o  3m @ 2.22% Cu, 6.38g/t Ag & 0.60% Zn (CC004RC)

 

•        4.39m @ 5.06% Cu, 2.56% Zn and 20.1 g/t Ag from 49.9m (CC0036D)

 

Furthermore, the model will factor in bulk sampling done on several historic stockpiles (which should support a higher confidence Indicated MRE), drone topographic survey and re-positioned mine workings that are accurately georeferenced.

 

On 24 July 2023 CCZ's geology team, working in conjunction with a specialist geological consultancy, produced an updated JORC (2012) compliant MRE for Cangai Copper Mine at:

 

·      4.4Mt @ 2.5% Cu inferred insitu and 0.2Mt @ 1.35% Cu indicated from historic stockpiles for ~114kt contained copper metal; augmented further by zinc, gold, and silver credits

 

At each reporting date, the Group undertakes an assessment of the carrying amount of its exploration and evaluation assets. During the period, the Group identified indicators of impairment on certain exploration and evaluation assets under AASB 6 Exploration and Evaluation of Mineral Resources. As a result of this review, an impairment charge of

$5,762,872 has been recognised in the statement of profit or loss and other comprehensive income in relation to areas of interest where no future exploration and evaluation activities are expected.

 

Zambia Copper Projects

 

On 7 December 2022, CCZ's Board approved incremental development work on known key targets - focusing on the highly prospective Luanshya Project which is in the heart of Zambia's copper belt.

 

Specifically, the geology team planned to roll out an Induced Polarisation (IP) geophysics campaign to build on earlier work undertaken in 2021 which focused on a 6km zone of copper surface anomalism that delineated up to 14 chargeable zones. A key focus of the IP campaign was to refine targets for test drilling and enhance the confidence of finding structurally controlled copper mineralisation.

 

The plans for development work follow London-based, Metallea Group's (previously Hyperion Copper) decision to cancel plans to list on the Alternative Investment Market (AIM) of the London Stock Exchange (LSE), due to extremely difficult equity market conditions. As this was a key requirement to secure funds to progress development work, Metallea has further advised it was not exercising the option - which delivered a US$100,000 non-refundable deposit to CCZ - to acquire the Zambia Copper Projects.

 

Moving forward, as CCZ's Board remains committed to aligning with a development partner or undertaking a trade sale for the Zambia Copper Projects, efforts will be redoubled to deliver this outcome.

 

 

CORPORATE

 

Board Changes

 

On 30 January 2023, to strengthen and diverse the Board's skill set, two new Non-Executive Directors were appointed:

·       Mr David Drakeley BSc (Hons), an experienced field geologist who has worked as point on CCZ's drilling campaigns in Broken Hill and Queensland, who will oversee designing and implementing all future exploratory work across the group's portfolio.

·       Mr Jack Sedgwick BEng BCom MBA (Distinction) GAICD, a hands-on corporate strategist / business improvement specialist with blue-chip experience across the mining / energy sectors (including working on Rio Tinto's iron ore expansion projects), who will oversee portfolio optimisation and the group's finances.

 

Note, these new additions follow the departure of Mr Geoff Reed to pursue a new opportunity.

 

SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS

There were no significant changes in the state of affairs of the Group during the year, other than as outlined elsewhere in this report.

 

SIGNIFICANT EVENTS AFTER THE BALANCE DATE

Other than as set out in the Review of Operations, there were no known material significant events from the end of the financial year to the date of this report that have significantly affected, or may significantly affect the operations of the Group, the results of those operations, or the state of affairs of the Group in future financial periods.

 

LIKELY DEVELOPMENTS AND EXPECTED RESULTS OF OPERATIONS

Castillo Copper remains focused on progressing its four (4) pillared strategy which includes continued exploration efforts at NWQ Copper Project in Queensland, Cangai Copper Mine and Broken Hill Project in New South Wales, and its four Zambian properties.

 

ENVIRONMENTAL REGULATION AND PERFORMANCE

The operations of the Group are presently subject to environmental regulation under the laws of the Commonwealth of Australia and the States of Queensland and New South Wales and the Republic of Zambia. The Group is, to the best of its knowledge, at all times in full environmental compliance with the conditions of its licenses.

 

SHARE OPTIONS

As at the date of this report, there were 52,000,000 unissued ordinary shares under unlisted options. The details of the unlisted options at the date of this report are as follows:

 

 

 

In addition to the unlisted options, there are 163,439,781 listed options (ASX: CCZA, CCZB). The details of the listed options at the date of this report are as follows:

 

 

No option holder has any right under the options to participate in any other share issue of the Group or any other entity.

 

PERFORMANCE SHARES

As part of the Zed Copper acquisition in the 2021 financial year, the Group issued 2 classes of performance shares to the vendors on 20 February 2021:

46,875,000 Class A performance shares

Conditions precedent - converting to an equal number of CCZ shares on delineation of a JORC resource of 200,000 tonnes of contained copper at a minimum grade of 0.5% within 5 years of execution of the Share Sale Agreement.

 

46,875,000 Class B performance shares

Conditions precedent - converting to an equal number CCZ shares on completion of a preliminary feasibility study demonstrating an internal rate of return greater than 25% within 5 years of execution of the Share Sale Agreement.

 

None of the above conditions were met during the 2023 financial year.

 

INDEMNIFICATION AND INSURANCE OF DIRECTORS AND OFFICERS

The Group has made an agreement indemnifying all the Directors and Officers of the Group against all losses or liabilities incurred by each Director or Officer in their capacity as Directors or Officers of the Group to the extent permitted by the Corporation Act 2001. The indemnification specifically excludes wilful acts of negligence. The Group paid insurance premiums in respect of Directors' and Officers' Liability Insurance contracts for current officers of the Group. The liabilities insured are damages and legal costs that may be incurred in defending civil or criminal proceedings that may be brought against the Officers in their capacity as Officers of entities in the Group. The total amount of insurance premiums paid has not been disclosed due to confidentiality reasons.

 

PROCEEDINGS ON BEHALF OF THE GROUP

No person has applied for leave of the court to bring proceedings on behalf of the Group or intervene in any proceedings to which the Group is a party for the purpose of taking responsibility on behalf of the Group for all or any part of those proceedings. The Group was not a party to any such proceedings during the year.

 

INDEMNITY AND INSURANCE OF AUDITOR

The Company has not, during or since the end of the financial year, indemnified or agreed to indemnify the auditor of the company or any related entity against a liability incurred by the auditor.

 

CORPORATE GOVERNANCE

 

In recognising the need for the highest standards of corporate behaviour and accountability, the Directors of Castillo Copper Limited support and have adhered to the principles of sound corporate governance. The Board recognises the recommendations of the Australian Securities Exchange Corporate Governance Council and considers that Castillo Copper is in compliance with those guidelines to the extent possible, which are of importance to the commercial operation of a junior listed resources company. During the financial year, shareholders continued to receive the benefit of an efficient and cost effective corporate governance policy for the Group. The Group's Corporate Governance Statement and disclosures can be found at https://castillocopper.com/investors/governance/.

 

 

Consolidated Statement of Profit or Loss and Other Comprehensive Income

for the year ended 30 June 2023

 

 

 

 

The accompanying notes form part of these financial statements.

 

 

Consolidated Statement of Financial Position

as at 30 June 2023

 

 

 

 

 

 

The accompanying notes form part of these financial statements.

 

 

Consolidated Statement of Changes in Equity

for the year ended 30 June 2023

 

 

 

 

 

 

 

The accompanying notes form part of these financial statements.

 

 

Consolidated Statement of Cash Flows

for the year ended 30 June 2023

 

 

 

 

Exploration and evaluation expenditure                                                          8                 (1,678,114)        (5,112,153)

NET CASH USED IN INVESTING ACTIVITIES                                                                  (1,760,114)        (5,023,505)

 

 

 

 

The accompanying notes form part of these financial statements.