Castillo Coppe. Regulatory News (CCZ)

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

Castillo selects Depco Drilling as lead contractor

Castillo Copper Limited (LSE: CCZ; ASX: CCZ), a base metal explorer primarily focused on copper across Australia and Zambia, is delighted to announce it has secured an in-principle agreement with Queensland-based Depco Drilling to appoint them as the lead contractor for the upcoming Mt Oxide drilling campaigns. The agreement is subject to Depco's lawyers reviewing the agreement along with shareholder approval at a soon to be announced General Meeting of shareholders.

Highlights

· CCZ has secured an agreement in-principle to appoint Depco Drilling as the lead contractor for the upcoming reverse cycle (RC) and diamond drill (DD) campaigns at the Big One Deposit and Arya Prospect within the Mt Oxide Project

· Depco Drilling is a privately owned Queensland based group, which has been operating since the early 1960s and has significant experience across multiple projects in the Mt Isa Basin area

· In a major validation for the Mt Oxide Project, Depco Drilling have agreed, subject to Depco legal review and CCZ shareholder approval, to accept a material proportion of their fees in CCZ shares, with a six-month voluntary escrow period

· Mobilisation plans are now being ramped up and all necessary logistics are in place, as both CCZ and Depco Drilling are working towards an expedited timeline:

o Note, as a Queensland based group, Depco Drilling has drilling equipment and teams within the state boarders that are ready and available to deploy relatively fast

· As previously announced, the RC drilling campaign for the Arya Prospect comprises circa 3,432m over 14 drill-holes, within an area ~1,500m by ~1,000m, with targets near surface and deeper geophysical anomalies

· For the Big One Deposit, there are two parts to the upcoming drilling program:

o A 4,385m RC drilling campaign, over 35 drill-holes, which will focus on a strike zone (~580m by ~120m) to test for mineralisation from ~26m up to ~190m below surface; and

o An incremental 160m diamond drilling campaign, targeting two drill-holes that are testing primarily for shallow mineralisation from ~26m up to ~52m below surface

· In lead up to the commencement of the drilling campaign, the geology team -which have been on site for several weeks now -are due to re-visit the Arya Prospect for a closer review and peg drill sites

The process to select the right drilling contractor has been thorough, as the Board was keen to select a group that had a strong Queensland presence and experience in the Mt Isa Basin. Depco Drilling will use two types of drill rigs to undertake work at the Big One Deposit and Arya Prospect. Moreover, this equipment is capable of diamond drilling and going down several hundred metres to test geophysical anomalies.

Next steps include:

· Peg Arya Prospect drill-sites and conduct surface geology review.

· Finalise drilling timelines.

· Reviews on Valparaisa and Eldorado prospects within the Mt Oxide Pillar.

Simon Paull, Managing Director of Castillo Copper, commented: "After a thorough process, we are delighted to reach an agreement in principle with Depco Drilling to spearhead our inaugural drilling campaign to the Big One Deposit and Arya Prospect within the Mt Oxide Project. This is a transformative development which puts CCZ squarely on the path to achieve its strategic objective to evolve into a mid-tier copper group."

Ged Hall, UK Director of Castillo Copper, said: "This is an excellent result, as we now have an in-principle agreement with a specialist Queensland based driller that knows the Mt Oxide region well. Further, after all the hard work our geology team have done evaluating the Big One Deposit and Arya Prospect, we are now heading towards the pointy end of the exploration journey for these priority targets."

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/

Overview of Mt Oxide Project

Castillo is targeting the development of a viable copper mining operation at the Mt Oxide Project, which 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.

On 22 March 2017, the Company announced that it had entered into an agreement with certain sellers to acquire the entire issued capital of QComm, an Australian copper and cobalt company which owns three assets targeting high grade copper and cobalt systems in New South Wales and Queensland (including the Mt Oxide Project). On 4 July 2017, the Company completed the QComm Acquisition on 4 July 2017 and in August 2017, the Company received notice from Queensland's Department of Natural Resources and Mines that the final exploration application had been granted.

Currently, the main highlight within the Mt Oxide Project is the exploration targets known as Big One Deposit and the Ayra Prospect, which was identified through an airborne electromagnetic survey conducted by Geoscience Australia in March 2019. The Company's main objective is to progress with several site visits to conduct geochemical sampling and geophysical surveys on known exploration targets to facilitate an inaugural test drilling campaign for developing a clear exploration strategy.

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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/