Castillo Coppe. Regulatory News (CCZ)

09 October 2020

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

Castillo set for maiden drilling campaign at the Mt Oxide Project

Logistics all in place ahead of drill campaigns at the Big One Deposit and the Arya Prospect

Castillo Copper Limited (LSE and ASX: CCZ), a base metal explorer primarily focused on copper across Australia and Zambia, is pleased to announce that all drilling logistics for the upcoming campaign at the Mt Oxide Project are now finalised and the drilling campaign is on track to commence by mid-October.

Highlights

· Castillo's geology team have largely finalised all necessary logistics with key stakeholders, enabling the drilling campaign at the Mt Oxide Project to commence by mid-month as planned:

o Contract with Depco Drilling has been formalised, with compensation terms including a material proportion in script and voluntary escrow period reflecting the driller's confidence in the Mt Oxide Project

· In principle, the landowner has agreed suitable access routes which is expected to result in drilling starting at the high-grade Big One Deposit then move on to the Arya Prospect

· Members of the geology and logistic teams recently visited the Arya Prospect to facilitate refining the best access route and fully optimise the test-drill targets:

o They reaffirmed the drilling programme for the Arya Prospect comprises 3,432m over 14 drill-holes, within an area 1,500m by 1,000m that targets near surface and deeper geophysical anomalies

o Notably, three deep vertical drill-holes will target the interpreted massive sulphide bedrock conductor (EG01) that is ~130m thick with dimensions ~1,500m by ~450m and ~426m deep

o The remaining drill-holes will focus on shallow anomalies, EG02 and EG10, interpreted to be supergene mineralisation - both are ~25m below surface and ~25m thick, with dimensions ~160m by 50m / ~270m by 280m respectively

· BHP, which found EG01, EG02 and EG10 in the 1990s, and other groups conducted rock chip sampling at surface, with assays confirming high-grade supergene copper mineralisation up to 7,400ppm Cu and 18,400ppm Cu respectively

· The overall objective of the campaign at the Arya Prospect is proving a clear nexus between the interpreted supergene copper mineralisation at surface and massive sulphides at depth

Next steps

There are several upcoming mutually exclusive events, including:

· Drilling commencing at Mt Oxide Project,

· Updates on Cangai Copper Mine and Broken Hill Projects; and

· Update on Mkushi Project in Zambia.

Simon Paull, Managing Director of Castillo Copper, commented: "It's pleasing to report that all logistics to commence the drilling campaign at the Mt Oxide Project are now in place. In particular, we are delighted our drilling contractor has agreed to be partly compensated in script, as that reflects a high degree of confidence in the Mt Oxide Project. Work is slated to commence at the high-grade Big One Deposit, then move on to the Arya Prospect where there are three principle interpreted targets including a sizeable potential massive sulphide conductor that is 130m thick."

Site visit to Arya Prospect

Members of the geology and logistic teams recently visited the Arya Prospect in order to determine the ideal access route and fully optimise the test drill targets. Under the current plan, while the drilling team are working on Big One Deposit, which is estimated to take 3-4 weeks, the logistics team will complete the access road to the Arya Project so it can accommodate heavy equipment. Concurrently, the geology team will conduct more thorough site inspections and then peg the drill sites ahead.

Further, work done by BHP4 and other groups confirmed high-grade supergene copper mineralisation at surface, based on assayed rock chip samples, up to 7,400ppm Cu and 18,400ppm Cu respectively. More significantly, BHP4 discovered EG01, EG02 and EG10 in the 1990s but due to exogenous factors at the time, possibly the prevailing base metal downturn, did not follow through and drill the targets.

As there is a probable link between supergene copper mineralisation at surface and massive sulphides at depth, the primary objective of Castillo's upcoming campaign at the Arya prospect is to secure demonstrable proof.

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 in the copper-belt district approximately 150km north of Mt Isa in north-west Queensland. The project is within the proximity of several historic and currently operating copper mines including Lady Annie and Capricorn Copper.

Currently, the main highlight within the Mt Oxide Project is the exploration targets known as the Big One Deposit, which comprises shallow high-grade supergene ore up to 28.4% Cu, and the Arya Prospect, which was identified through an airborne electromagnetic survey conducted by Geoscience Australia in March 2019.

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 Cangai Project is 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 in this report that relates to Exploration Results for the "Mt Oxide Project" contained in this announcement is based on a fair and accurate representation of the publicly available information at the time of compiling the RNS Release, and is based on information and supporting documentation compiled by Matthew Stephens, a Competent Person who is a Fellow of The Australian Institute of Geoscientists. Matthew Stephens is a Senior Consultant Geologist consulting to Xplore Resources Pty Ltd. Mr Stephens has been a Fellow of the Australian Institute Geoscientists for 11 years and has sufficient experience that is relevant to the style of mineralisation and type of deposit under consideration and to the activity being undertaken to qualify as a Competent Person as defined in the 2012 Edition of the 'Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves'. Mr Stephens consents to the inclusion in the report of the matters based on his information and the form and context in which it appears.