30 January 2024

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

December 2023 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 shareholders its latest quarterly report for the period 1 October 2023 to 31 December 2023.

HIGHLIGHTS:

STRATEGIC ASSET PORTFOLIO REVIEW

·    A wholesale asset portfolio review was completed to support the definition of next steps and optimal pathways to create shareholder value.

·    The review identified which assets remain core and highly prospective to prioritise exploration capital and leverage future opportunities with strategic development partners.

NWQ COPPER PROJECT, QUEENSLAND

·    The Board collectively endorsed the geology team's motion to earmark the NWQ Copper Project as a core asset.

·    Growing geological understanding of the 20+ prospects is now a Board focus, in readiness of engaging potential strategic partners.

·    Field trips commenced to map and fully assess future exploration targets across the asset.

CORPORATE

·    Former Managing Director Dr Dennis Jensen tendered his resignation during the Quarter.

·    Mr Jack Sedgwick (BEng BCom MBA - Distinction) GAICD transitioned from interim Executive Director to Non-Executive Director.

·    Cash on hand at the end of quarter totalled $1,747,000.

·    Rehabilitation Security Bonds which will convert to cash within 12 months totalled $311,000 at quarter end.

STRATEGIC ASSET PORTFOLIO REVIEW

Identification of Core and Non-Core Assets

During the quarter, a strategic asset review was completed to assess the location, timing and sequence of planned exploration activities across Castillo's existing portfolio.

Assets deemed to be core will be developed, potentially with the support of a strategic partner, while assets deemed non-core will be divested.

NWQ COPPER PROJECT

Core Asset Identification

During the quarter as part of the strategic asset portfolio review, the Company's NWQ Copper Project - situated in Mount Isa's copper-belt - was identified as a core asset.

This classification acknowledges the NWQ Copper Project (see Figure 1) as an asset that aligns with Castillo's future development plans.

Next Steps

The Board will be embarking on a campaign to deepen its understanding of the 20+ prospects across the tenure (excluding the Big One Deposit) ahead of engaging with potential strategic partners.

As part of the review process, members of the geology team visited the Boomerang and Josephine Prospects to assess their exploration potential. Both have been interpreted as prospective for structurally controlled copper mineralisation.

Historical Highlights

The historical highlights of these prospects are as follows:

Boomerang Prospect^(1-4)

Mineralisation is hosted in the Surprise Creek Formation and is through to be associated with secondary faulting related to the Mt Gordon Fault, a regional NE trending structure.

In 1975, Dampier Mining conducted an exploration campaign that included geological mapping, rock sampling and drilling of nine RAB holes, to delineate a sandstone hosted copper oxide mineralisation over an 800m strike length. Secondary copper staining was observed along the strike length.

Josephine Prospect^(1-4)

Occurs within a fault-bounded block of middle-lower Surprise Creek Formation. The host rock consists of buff, brown and grey thin bedded fine feldspathic and labile sandstone, ferruginous sandstone and micaceous siltstone.

Figure 1: NWQ Project Prospect Map

Field Trip and Rock Chip Sampling

The field trip was undertaken to complete a small program of rock chip sampling (refer ASX Announcement dated 24 October 2023) taken across various geological formations.

This preliminary work was undertaken to determine the prospectivity for copper mineralisation and facilitate the next phase of a more systematic exploration campaign if suitable targets are determined.

CORPORATE

Board changes: On 10 October 2023 Managing Director Dr Dennis Jensen resigned from the Castillo Copper Board.

Rehabilitation Security Bonds

Rehabilitation Security and Bonds which will convert to cash within 12 months totalled $311,000 at quarter end.

During the quarter $225,000 was paid to related parties of the Company relating to executive and non-executive director fees and exploration consulting fees paid to an entity controlled by a related party.

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

Table 1: Summary of Exploration Expenditure

For further information, please contact:  

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".

References

1)        CCZ London Listing Prospectus - 28 July 2020

2)        CCZ ASX Announcement - 17 October 2023

3)        CCZ ASZ Announcement - 23 January 2023

4)        Nowland, M. L. (2020-22). EPM 26462 Big Oxide North Annual Report for period 29th August 2021 to 28th August 2022. Prepared by ROM Resources for Castillo Copper Limited.

APPENDIX A: Key PROJECTS

Figure 2: West and East Zone - BHA Project, Broken Hill Region (Source: CCZ Geology Team)

Figure 3: Zambia Copper-Belt Projects (Source: CCZ Geology Team)

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

APPENDIX B: Interest in mining tenements held

Table 2: Jackaderry (Cangai), New England Orogen in NSW

Table 3: Broken Hill, located within a 20km radius of Broken Hill in NSW

Table 4: Mt Oxide, Mt Isa region in North West Queensland

Table 5: Zambia

Appendix 5B

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

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 January 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.