Castillo Coppe. Regulatory News (CCZ)

1 October 2020

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

Castillo acquires commanding ground position at Broken Hill's world-class zinc-silver-lead deposit

Enhances footprint surrounding the world's largest high-grade zinc-silver-lead deposit

New technology confirms tenements are highly prospective for Broken Hill Type zinc-silver-lead (BHT) and Iron-Oxide-Copper-Gold (IOCG) mineralisation

Castillo Copper Limited (LSE: CCZ; ASX: CCZ), a base metal explorer primarily focused on copper across Australia and Zambia, is pleased to announce it has entered into a binding agreement with Wyloo Metals Pty Ltd to acquire two new tenements at its Broken Hill Project in New South Wales, Australia.

Castillo's Broken Hill Project currently consists of two contiguous tenements (EL8599 and EL8572) prospective for cobalt-zinc, located within a 20km radius of Broken Hill. The new highly prospective tenements EL8434 (611.9 km2) and EL8435 (72.4 km2) complement Castillo's existing tenure and expand its footprint surrounding Broken Hill, the world's largest high-grade zinc-silver-lead deposit, to 801.3km2 from 117km2 previously.

Highlights

· Acquisition gives Castillo a commanding ground position in Broken Hill - a transformational move which delivers a large footprint proximal to Broken Hill's world-class silver-zinc-lead deposit

· Significant technological advances have unlocked progress, indicating that Castillo's footprint is prospective for Broken Hill Type zinc-silver-lead (BHT) and Iron-Oxide-Copper-Gold (IOCG) mineralisation

· Recent work by Geological Survey of New South Wales (GSNSW) generated advanced predictive geological models for major mineral systems:

o Confirmed that Castillo's enlarged tenure is "Highly Prospective" for silver-zinc-lead in the West Zone and for copper-gold mineralisation in the East Zone

· Applying new technology has generated numerous high priority drillable targets within the tenure boundaries which delivers a significant pipeline of exploratory work ahead

· Historical exploration, using conventional methods, missed identifying these highly prospective targets as they are below a 5-40m covering of surficial clay and sand

Next steps for Broken Hill

· Castillo is reviewing development plans:

o Target is a significant value creating opportunity for copper-gold-zinc-silver-lead mineralisation, as the tenure has been largely under-explored over the past two decades

o Immediate priority to conduct ground geophysics on priority IOCG and BHT targets, then commence formulating the inaugural drilling campaign

Next steps for other projects

· Commencement of drilling at the Mt Oxide Project

· In fill soil sampling for Mkushi Project in Zambia

· Review of Eldorado prospect within the Mt Oxide Project

Simon Paull, Managing Director of Castillo Copper, commented: "The advanced predictive geological model has uncovered a potential scalable treasure trove of fresh targets to test-drill for BHT and IOCG mineralisation. More significantly, most of the new targets are at relatively shallow depth as the surficial clay and sand covering ranges from 5-40m. Our geology team believe with some further localised ground geophysics, a drilling campaign can be formulated and deployed relatively fast."

Ged Hall, UK Director of Castillo Copper, said: "New technology can change fortunes and that is exactly what has transpired here. Through acquiring more ground in Broken Hill, we now potentially have a scalable asset that is adjacent to the world-class silver-zinc-lead deposit."

Further information on Broken Hill Project

Targeting large-scale BHT and IOCG mineralisation

Castillo's enlarged project comprises a tenure package that is proximal to Broken Hill's world-class silver-zinc-lead deposit. Encouragingly, significant technological progress with advanced predictive geological modelling released by GSNSW highlighted the ground is prospective for Broken Hill Type zinc-silver-lead (BHT) and Iron-Oxide-Copper-Gold (IOCG) mineralisation.

West Zone: "Highly Prospective" for BHT style mineralisation

GSNSW's advanced predictive geological models provide fresh insights into previously undetected BHT mineralisation below a 5-40m covering of surficial sand and clay. The model suggests a large part of the West Zone has high potential to host significant mineralisation for silver-zinc-lead deposits.

More significantly, the model's "Highly Prospective" reading for the West Zone correlates with Broken Hill's core mining leases 25km to the north-east - where significant silver-zinc-lead has been produced historically.

Due to the scale of the "Highly Prospective" area across the West Zone, there are potentially numerous walk-up test drill targets which require simple ratification by a ground geophysical campaign. Interestingly, previous surface sampling and drilling completely missed the areas "Highly Prospective" for BHT mineralisation.

Overall, the model's insights highlight the potential for a new discovery, which materially enhances the exploration upside.

East Zone: "Highly Prospective" for IOCG mineralisation

Applying GSNSW's model to the East Zone illustrates this area is "Highly Prospective" for IOCG style mineralisation (gold-copper primarily) which complements the BHT potential in the West Zone.

Notably, the East Zone demonstrates one of the largest continuous untested IOCG trends that has surfaced from recent work. This delivers a plethora of potentially walk up drill targets subject to geophysical survey confirmation.

Interestingly, a scarcity of drilling along the south-east portion of the East Zone is due to significant post-depositional cover observed across the entire tenure. However, the insights from the model provide significant incremental exploration upside for IOCG mineralisation, as work so far has mostly focused on outcropping bedrock with areas of cover largely ignored.

Exploration programme

The immediate focus is to conduct ground geophysics on priority IOCG and BHT targets. The Company will then commence formulating the inaugural drilling campaign.

Transaction details

Castillo Copper Ltd, via its 100% owned subsidiary Broken Hill Alliance Pty Ltd, has entered into a binding agreement with private group, Wyloo Metals Pty Ltd, to acquire EL8434 and EL8435. Under the terms of the agreement, Castillo will pay Wyloo A$215,000 cash plus assign a 2% NSR in the event of future mining operations materialising.

Subject to securing NSW ministerial approval and completing tenement transfers by 31 July 2021, Castillo is set to own EL8434 (611.9 km2) and EL8435 (72.4 km2). On an aggregated basis, this lifts Castillo's tenure package in the region to 801.3km2 from 117km2 previously.

In addition to this release, a PDF version of this report, with supplementary information can be found on the Company's website: https://www.castillocopper.com/asx-announcements/

The Geological Survey of New South Wales is available at: https://www.resourcesandgeoscience.nsw.gov.au/miners-and-explorers/geoscience-information/geological-survey-of-nsw 

For further information, please contact:

Notes to Editors:

About Castillo Copper

Castillo Copper Limited is an Australian-based explorer primarily focused on copper across Australia and Zambia. Castillo Copper is listed on the LSE and ASX under the ticker "CCZ".

The three main projects across Australia and Zambia include:

Australia

Mt Oxide Project

Castillo is targeting the development of a viable copper mining operation at the Mt Oxide Project, which has significant exploration upside with several high-grade targets including an interpreted 130m thick by 1,500m by 450m massive sulphide bedrock conductor that is about to be drilled. The project is located approximately 150km north of Mt Isa in northwest Queensland. The project is within the proximity of several historic and currently operating copper mines including Lady Annie and Capricorn Copper.

Cangai Project

The Company's flagship project is the Cangai Project in northern New South Wales, where the Cangai Copper Mine is located, one of Australia's highest grading historic copper mines. The Company's core focus is the development and expansion of the Cangai Copper Mine, which comprises a volcanogenic massive sulphide deposit, with a JORC Code compliant Inferred Resource of 3.2Mt at 3.35 per cent. Cu. and up to 14.45 per cent. Cu in assayed diamond core intersections.

Zambia

Zed Projects

The Company is the sole shareholder of Zed, an Australian company which holds four high-quality prospective assets across Zambia's copper-belt, the second largest copper producer in Africa. Castillo Copper intends to initially focus on the Luanshya Project, which sits on the Zambian copper belt's Lufilian Arc geological structure. The second priority for the Company is the Mkushi Project, which contiguously surrounds an operating open-pit copper mine, in a region proven to be highly prospective for Cu-Au mineralisation. The Company is currently working towards establishing a Zambian in-country presence, utilising local geologists and joint venture partner teams.

Visit Castillo Copper's website: https://www.castillocopper.com/

Competent Person Statement

The information on the page that relates to Exploration Results at Broken Hill is based on information compiled or reviewed by Mr Mark Biggs, a consultant 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. Mr Biggs also consents to the inclusion in this report of the matters based on information in the form and context in which it appears.