(Alliance News) - Castillo Copper Ltd on Monday saw its shares take a tumble, after it retracted an announcement made earlier in July, in which it based production targets on an inferred resource.
Castillo Copper is a base metal explorer primarily focused on copper across Australia and Zambia. Company shares fell 16% to 0.40 pence each in London on Monday morning.
The firm said that, following discussions with the Australian Securities Exchange, it had chosen to retract the announcement from July 13 as the information was not consistent with ASX Listing Rules 5.16.6.
The announcement in question told investors that a preliminary pit optimisation study for the Big One deposit delivered a net present value of AUD28 million, around GBP14.7 million.
At the time, Castillo said that the study showed an optimised pit shell could deliver as much as 6,266 tonnes of copper with a head grade of 1.4%, 4,363 tonnes of silver at 0.31 grammes per tonne and 1,469 tonnes of cobalt at 0.3%. It also said there was potential to build on the findings and advance towards obtaining a mining license once a development partner had been attained.
According to ASX listing rules, if a production target is based solely on inferred mineral resources, there must also be a statement of the factors that lead the entity to believe it has a reasonable basis for the target.
Among other stipulations, there must also be a cautionary statement proximate to, and with equal prominence as, the reported production target, which clarifies the "low level of geological confidence associated with inferred mineral resources", and that further exploration may not help to realise the production target.
On Monday, Castillo said that it has now retracted its announcement. As a consequence, it advises that "investors should not rely on the retracted announcement for their investment decisions".
By Holly Beveridge, Alliance News reporter
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Castillo Coppe. (CCZ)