Last checked at 30 Apr 2024 12:12
30 April 2024
CASTILLO COPPER LIMITED("Castillo", "CCZ" or the "Company")
March 2024 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 January 2024 to 31 March 2024.
HIGHLIGHTS:
Strategic Asset Portfolio Update
· A strategic portfolio review undertaken in Q4 2023 determined which assets would remain core and highly prospective.
· In this quarter, Castillo Copper divested itself of two Exploration Licenses, which formed part of the larger Broken Hill Project.
Rimfire (ASX:RIM, "Rimfire") acquires two Exploration Licenses from Castillo Copper
· Rimfire acquired an unencumbered 100% ownership of Exploration Licenses 8572 and 8599 (Castillo tenements).
· Rimfire announced the acquisition on 11 January and completed it on 21 March 2024.
Corporate
· Mr Jack Sedgewick BEng BCom MBA (Distinction) GAICD stepped down from his role as Non-Executive Director on 14 Mar.
· Dr David Drakeley stepped down from his role as Non-Executive Director on 14 Mar.
· Mr Eduardo Robaina BEng assumed the role of Non-Executive Director on 14 Mar.
· Mr Joel Logan BSc assumed the role of Non-Executive Director on 14 Mar.
Cash and Liquid Investments
· Cash on hand at end of quarter totalled $1.387m.
· Rehabilitation Security Bonds totalled $486,960 at quarter end, of which $172,900 is expected to convert to cash within 3 months.
· CCZ holds 13,440,861 Rimfire Pacific Mining Ltd (ASX: RIM) shares which as at 26 March 2024 had a market value of ~$417,000.
Eduardo Robaina, Non-Executive Director, commented: "I am very much looking forward to assuming an active role on the Castillo Copper Board, seeking to bolster Company efforts in executing the asset strategy that has been devised in the later stages of 2023.
"This strategy has included making a considered assessment of our existing tenements - whilst all prospective in their own right - to identify those that we deem core or complementary to our team's collective strengths and our Company objectives at current.
"Subsequently, the rationalisation of our Australian and Zambian portfolio has to date resulted in the successful divestment of two of our four tenements at Broken Hill to Rimfire, an established explorer in this district.
"In addition to this divestment, future activity will further enable the Company to optimise its capital allocation, which will prove critical to making advancements at our core asset - the NWQ Project - situated in the established Mount Isa copper belt and consisting of over 20 prospects of interest.
"2023 was undoubtedly a year to reset and redirect Company efforts. Now, with a renewed Corporate structure and clear path forward, Castillo Copper looks forward to returning focus upon delivery."
STRATEGIC ASSET PORTFOLIO UPDATE
Prospect Interpretations at Core Asset
During Q4 2023, a strategic review was completed to assess the location, timing and sequence of planned exploration activities across Castillo's existing portfolio.
As part of the review process, members of the geology team visited the North West Queensland Copper Project's Boomerang and Josephine Prospects to assess their exploration potential. Both have been interpreted as prospective for structurally controlled copper mineralisation.
Sale Price of Exploration Licenses 8572 and 8599
It was determined that Company assets deemed non-core would be sold. Castillo Copper divested itself of two tenements at Broken Hill this quarter, selling Exploration Licenses 8572 and 8599 to Rimfire Pacific Mining Ltd (ASX: RIM) (Rimfire). These assets were prospective of cobalt, copper and pegmatite rare earth elements.
As per the agreement terms, Rimfire issued 8,064,516 Rimfire Ordinary Shares (Consideration Shares) to Castillo Copper being $150,000 worth of shares at an issue price of $0.0186 (Consideration Shares Issue Price).
Rimfire issued a further $150,000 worth of Rimfire Ordinary Shares (Subsequent Shares) at an issue price of $0.0279, which was 50% above the Consideration Shares Issue Price (Subsequent Shares Issue Price). As a result, Rimfire issued Castillo Copper 5,376,345 Shares at this price.
At 26 March 2024, CCZ's shareholding in Rimfire had a market value of ~$417,000.
CORPORATE BOARD CHANGES
Outgoing Non-Executive Directors
As of 14 March 2024, Jack Sedgewick and David Drakeley stepped down as Non-Executive Directors. Chairman, Gerrard Hall personally thanked Jack and David for assisting in guiding the Company's reinvigorated development strategy in recent months.
"No doubt we find ourselves facing a challenging market at present, however with core assets identified - as well as a commitment to advance development at these operations with targeted exploration activity - the company is well-equipped to forge ahead. Castillo wishes Jack and David all the best in their future endeavours," Gerrard Hall said.
Incoming Non-Executive Directors
As of March 2024, Eduardo Robaina and Joel Logan joined Castillo Copper in the capacity of Non-Executive Directors.
"To bolster our developmental efforts in 2024 and beyond, we are incredibly excited to welcome aboard Eduardo and Joel to the Castillo Copper Board. Each possesses a unique calibre of experience, the Company looks forward to maximising Company value with the adage of their joint expertise," Gerrard Hall said.
About Mr Eduardo Robaina, Non-Executive Director
Eduardo Robaina is an accomplished Managing Director and Engineering Consultant with an executive and technical skillset that will greatly complement that of the Castillo Board.
Possessing over two decades of experience working in the resources sector, spanning both technical and leadership positions at foremost businesses - including the likes of Woodside, Mineral Resources, Santos and most recently Add Energy (part of ABL Group) - Mr Robaina brings an all encompassing understanding of business operations.
In his most recent position as Managing Director at Add Energy, Mr Robaina was responsible for overseeing the business operating model, which saw the Company achieve significant financial growth over a 4-year period. He was an active member in Add Energy's Executive team during its 2022/23 acquisition and integration into ABL Group.
About Mr Joel Logan, Non-Executive Director
Joel Logan is an Exploration Geologist with an impressive breadth of work experience in exploration, development and producing assets. These operations have hosted a variety of resources such as copper, uranium, gold, lithium, nickel, cobalt and PGEs.
Over the course of his professional career, Mr Logan has developed strong theoretical and practical skills, enabling the delivery of geoscientific outcomes to notable Companies and operations, including the likes of BHP's Olympic Dam Project and Azure Minerals Ltd's Andover Project.
Mr Logan's role at Azure Minerals saw him design and execute exploration and drill hole strategies, in addition to resource development of highly mineralised LCT pegmatities. This experience in driving early-stage activity will be invaluable to furthering Castillo's asset development strategy.
CASH AND LIQUID INVESTMENTS
Cash on Hand
Cash on hand at end of quarter totalled $1.387m.
Rehabilitation Security Bonds
Rehabilitation Security Bonds totalled $486,960 at quarter end, of which $172,900 is expected to convert to cash within 3 months.
Listed investments
CCZ holds 13,440,861 Rimfire Pacific Mining Ltd (ASX: RIM) shares which as at 26 March 2024 had a market value of ~$417,000.
For further information, please contact:
Castillo Copper Limited | +61 8 6558 0886 |
Gerrard Hall (UK), Chairman |
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SI Capital Limited (Financial Adviser and Corporate Broker) | +44 (0)1483 413500 |
Nick Emerson |
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Gracechurch Group (Financial PR) | +44 (0)20 4582 3500 |
Harry Chathli, Alexis Gore, Henry Gamble |
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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".
APPENDIX A: Key Projects
Figure 1: BHA Project, Broken Hill Region (Source: CCZ Geology Team)
Figure 2: Zambia Copper-Belt Projects (Source: CCZ Geology Team)
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Figure 3: Historic drilling results in SYG's Mining Lease (Source: Refer to CCZ ASX Release 11 November 2019)
Figure 4: NWQ Copper Project, Mt Isa Region (Source: CCZ Geology Team)
APPENDIX B: Interest in mining tenements held
Table 1: Jackaderry (Cangai), New England Orogen in NSW
Tenement ID | Ownership at start of Quarter | Ownership at end of Quarter | Change during the Quarter |
EL8635 | 100% | 100% | - |
EL8625 | 100% | 100% | - |
EL8601 | 100% | 100% | - |
Table 2: Broken Hill, located within a 20km radius of Broken Hill in NSW
Tenement ID | Ownership at start of Quarter | Ownership at end of Quarter | Change during the Quarter |
EL8599 | 100% | - | 100% |
EL8572 | 100% | - | 100% |
EL8434 | 100% | 100% | - |
EL8435 | 100% | 100% | - |
Table 3: Mt Oxide, Mt Isa region in North West Queensland
Tenement ID | Ownership at start of Quarter | Ownership at end of Quarter | Change during the Quarter |
EPM 26513 | 100% | 100% | - |
EPM 26525 | 100% | 100% | - |
EPM 26574 | 100% | 100% | - |
EPM 26462 | 100% | 100% | - |
EPM 27440 | 100% | 100% | - |
Table 4: Zambia
Tenement ID | Ownership at start of Quarter | Ownership at end of Quarter | Change during the Quarter |
24659-HQ-LEL (Mkushi) | 100% | 100% | - |
25195-HQ-LEL (Luanshya) | 55% | - | 55% |
25273-HQ-LEL (Luanshya) | 55% | - | 55% |
25261-HQ-LEL (Mwansa) | 100% | - | 100% |
Appendix 5B
Mining exploration entity or oil and gas exploration entity quarterly cash flow report
Name of entity | ||
Castillo Copper Ltd | ||
ABN | Quarter ended ("current quarter") | |
52 137 606 476 | 31 March 2024 |
Consolidated statement of cash flows | Current quarter $A'000 | Year to date (9 months) $A'000 | |
1. | Cash flows from operating activities | ||
1.1 | Receipts from customers | ||
1.2 | Payments for | ||
(a) exploration & evaluation | |||
(b) development | |||
(c) production | |||
(d) staff costs | |||
(e) administration and corporate costs | (293) | (956) | |
1.3 | Dividends received (see note 3) | ||
1.4 | Interest received | 4 | 27 |
1.5 | Interest and other costs of finance paid | ||
1.6 | Income taxes paid | ||
1.7 | Government grants and tax incentives | ||
1.8 | Other (provide details if material) | ||
1.9 | Net cash from / (used in) operating activities | (289) | (929) |
2. | Cash flows from investing activities |
(59) |
(560) |
2.1 | Payments to acquire or for: | ||
(a) entities | |||
(b) tenements | |||
(c) property, plant and equipment | |||
(d) exploration & evaluation | |||
(e) investments | |||
(f) other non-current assets | |||
Consolidated statement of cash flows | Current quarter $A'000 | Year to date (9 months) $A'000 | |
2.2 | Proceeds from the disposal of: |
(28) |
(28) |
(a) entities | |||
(b) tenements | |||
(c) property, plant and equipment | |||
(d) investments | |||
(e) other non-current assets | |||
2.3 | Cash flows from loans to other entities | ||
2.4 | Dividends received (see note 3) | ||
2.5 | Other (provide details if material) | ||
2.6 | Net cash from / (used in) investing activities | (87) | (588) |
3. | Cash flows from financing activities | ||
3.1 | Proceeds from issues of equity securities (excluding convertible debt securities) | ||
3.2 | Proceeds from issue of convertible debt securities | ||
3.3 | Proceeds from exercise of options | ||
3.4 | Transaction costs related to issues of equity securities or convertible debt securities | ||
3.5 | Proceeds from borrowings | ||
3.6 | Repayment of borrowings | ||
3.7 | Transaction costs related to loans and borrowings | ||
3.8 | Dividends paid | ||
3.9 | Other (provide details if material) | ||
3.10 | Net cash from / (used in) financing activities | - | - |
4. | Net increase / (decrease) in cash and cash equivalents for the period | ||
4.1 | Cash and cash equivalents at beginning of period | 1,747 | 2,897 |
4.2 | Net cash from / (used in) operating activities (item 1.9 above) | (289) | (929) |
4.3 | Net cash from / (used in) investing activities (item 2.6 above) | (87) | (588) |
4.4 | Net cash from / (used in) financing activities (item 3.10 above) | - | - |
Consolidated statement of cash flows | Current quarter $A'000 | Year to date (9 months) $A'000 | |
4.5 | Effect of movement in exchange rates on cash held | 16 | 7 |
4.6 | Cash and cash equivalents at end of period | 1,387 | 1,387 |
5. | Reconciliation of cash and cash equivalents at the end of the quarter (as shown in the consolidated statement of cash flows) to the related items in the accounts | Current quarter $A'000 | Previous quarter $A'000 |
5.1 | Bank balances | 987 | 1,747 |
5.2 | Call deposits | 400 | - |
5.3 | Bank overdrafts | ||
5.4 | Other (provide details) | ||
5.5 | Cash and cash equivalents at end of quarter (should equal item 4.6 above) | 1,387 | 1,747 |
6. | Payments to related parties of the entity and their associates | Current quarter $A'000 |
6.1 | Aggregate amount of payments to related parties and their associates included in item 1 | 531 |
6.2 | Aggregate amount of payments to related parties and their associates included in item 2 | 402 |
1Comprises director's fees for the quarter. 2Comprises consulting fees paid to the Managing Director and exploration expenditure paid to Field Crew Pty Ltd, a related entity of director David Drakeley. | ||
7. | Financing facilities Note: the term "facility' includes all forms of financing arrangements available to the entity. Add notes as necessary for an understanding of the sources of finance available to the entity. | Total facility amount at quarter end $A'000 | Amount drawn at quarter end $A'000 |
7.1 | Loan facilities | ||
7.2 | Credit standby arrangements | ||
7.3 | Other (please specify) | ||
7.4 | Total financing facilities | ||
7.5 | Unused financing facilities available at quarter end | ||
7.6 | Include in the box below a description of each facility above, including the lender, interest rate, maturity date and whether it is secured or unsecured. If any additional financing facilities have been entered into or are proposed to be entered into after quarter end, include a note providing details of those facilities as well. | ||
8. | Estimated cash available for future operating activities | $A'000 |
8.1 | Net cash from / (used in) operating activities (item 1.9) | (289) |
8.2 | (Payments for exploration & evaluation classified as investing activities) (item 2.1(d)) | (59) |
8.3 | Total relevant outgoings (item 8.1 + item 8.2) | (347) |
8.4 | Cash and cash equivalents at quarter end (item 4.6) | 1,387 |
8.5 | Unused finance facilities available at quarter end (item 7.5) | |
8.6 | Total available funding (item 8.4 + item 8.5) | 1,387 |
8.7 | Estimated quarters of funding available (item 8.6 divided by item 8.3) | 4.0 |
Note: if the entity has reported positive relevant outgoings (ie a net cash inflow) in item 8.3, answer item 8.7 as "N/A". Otherwise, a figure for the estimated quarters of funding available must be included in item 8.7. | ||
8.8 | If item 8.7 is less than 2 quarters, please provide answers to the following questions: | |
8.8.1 Does the entity expect that it will continue to have the current level of net operating cash flows for the time being and, if not, why not? | ||
Answer: N/A | ||
8.8.2 Has the entity taken any steps, or does it propose to take any steps, to raise further cash to fund its operations and, if so, what are those steps and how likely does it believe that they will be successful? | ||
Answer: N/A | ||
8.8.3 Does the entity expect to be able to continue its operations and to meet its business objectives and, if so, on what basis? | |
Answer: N/A | |
Note: where item 8.7 is less than 2 quarters, all of questions 8.8.1, 8.8.2 and 8.8.3 above must be answered. |
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 April 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.