3 October 2024
CASTILLO COPPER
LIMITED
("Castillo" or the
"Company")
Strategic Sale of Cangai
Copper Mine to Infinity Mining
Castillo Copper Limited (LSE and
ASX: CCZ), a base metal explorer primarily focused on copper across
Australia and Zambia, is pleased to announce that it has entered
into a conditional agreement with ASX-listed Infinity Mining
Limited (ACN 609 482 180) ("IMI") to sell three granted exploration
licences EL 8625, EL 8635 and EL 8601 in northern New South Wales
("NSW") which host Cangai Copper Mine ("Cangai Copper Mine
tenements").
Highlights:
·
Castillo has entered into a conditional agreement
to sell three contiguous tenements which host Cangai Copper Mine in
northern New South Wales to ASX-listed Infinity Mining
·
Under the terms of the proposed transaction, which
is subject to the satisfactory completion of due diligence and
securing key approvals, Castillo will receive 40m IMI shares and
20m IMI 5-year options exercisable at $0.07:
o As a
result, Castillo is set to become a significant shareholder in IMI
and directly participate in any value created arising from
advancing the Cangai Copper Mine tenements
·
The divestment is in line with Castillo's
strategic goal to align with the right development partner to
ensure non-core asset portfolio optimisation, enabling the Board to
focus on advancing the core NWQ Copper Project in the Mt Isa
copper-belt, commencing with the Big One Deposit
·
This strategy has already proved successful for
unlocking value for shareholders, as Castillo received equity
consideration in ASX-listed Rimfire Pacific Mining NL (ASX: RIM)
from selling the BHA West Project in the Broken Hill
region1
·
With the level of consolidation across the global
copper sector appearing to gain momentum, the Board intends to hold
the remaining two non-core assets - BHA East Project in NSW and
Mkushi Copper Project in Zambia - until the right development
partners are secured
Ged
Hall, Chairman, commented: "The strategic sale of the
Cangai Copper Mine tenement package to Infinity Mining is an
excellent outcome, as it is the second such transaction which
unlocks value this calendar year. Moreover, it validates the
Board's strategy on optimising the non-core asset portfolio and
enables resources to be channelled into developing the core NWQ
Copper Project in the Mr Isa copper-belt. The Board is highly
confident Infinity Mining's team has the capability to fully
develop the Cangai Copper Mine tenements which in turn has the
potential to generate material value for stakeholders given the
equity position Castillo will hold post-transaction
close."
Key
Terms of Transaction
IMI will acquire the Cangai Copper
Mine tenements on the following terms:
·
Execution of a Formal Sale Agreement on terms
consistent with the agreed Term Sheet;
·
IMI receiving firm commitments for a capital
raising of not less than $1 million (before costs);
·
Castillo will procure that the holders of the
existing royalties over the Cangai Copper Project (ranging from a
1-3% NSRs) will grant IMI the first right of refusal to forfeit or
assign 100% of the royalty interests in consideration for the issue
of 30,000,000 IMI shares and 15,000,000 IMI options each
exercisable at $0.07 and expiring 5 years from the date of
grant;
·
IMI and Castillo where required, obtaining all
shareholder, statutory and regulatory approvals and/or waivers
required to implement the Sale, including IMI shareholder approval
to issue the Acquisition Shares and Acquisition Options;
·
Issue of 3,000,000 IMI shares to Marshall
Custodians as their fee for introducing and facilitating the
acquisition;
·
The absence of a material adverse change in
relation to the Assets; and
·
All representations and warranties given by the
Seller remaining true and accurate in all material respects;
and
·
The completion period is 60 days after execution
of the Term Sheet.
Upon completion Castillo will be
issued:
·
40,000,000 fully paid ordinary shares in the Buyer
(Acquisition Shares); and
·
20,000,000 options to acquire ordinary shares in
the Buyer, each exercisable at $0.07 and expiring 5 years from the
date of grant (Acquisition Options).
Note, at the time of writing, IMI
and Castillo still must complete all necessary ancillary legal
documentation, while the transaction is still subject to standard
regulatory conditions apparent in NSW including ministerial consent
to transfer the tenements.
Successfully Unlocking Value from Non-Core
Assets
Divesting the Cangai Copper Mine
tenements is in line with Castillo's strategic intent to seek out
the right development partner to ensure non-core asset portfolio
optimisation. This is critical since it enables the Board to focus
on advancing the core NWQ Copper Project in the Mt Isa copper-belt,
starting with the Big One Deposit.
This strategy has already proved
successful for unlocking value for shareholders, as Castillo
received equity consideration in RIM from selling the BHA West
Project in the Broken Hill region1. Looking ahead, with
the level of consolidation across the global copper sector
appearing to gain momentum, the Board intends to hold the remaining
two non-core assets - BHA East Project in NSW and Mkushi Copper
Project in Zambia - until the right development partners are
identified.
To recap, the key selling points for
the two non-core assets are below:
·
BHA East Project (NSW): leveraging historical data
and data gathered from the most recent drilling campaign, a JORC
compliant inferred MRE was calculated at 64Mt @ 318 ppm Co for
21,556t contained cobalt metal and 44,260t of contained copper
metal (63Mt @ 0.07% Cu)2 at relatively shallow
depths.
·
Mkushi Project (Zambia): a 2022 IP survey
highlighted multiple zones of high chargeability coincident with
known copper soil anomalies which are potential bodies of
disseminated copper sulphide mineralisation and are prime targets
to test drill3.
For
further information, please
contact:
Castillo Copper Limited
|
+61 8 6558 0886
|
Gerrard Hall (UK),
Chairman
|
|
|
|
SI
Capital Limited (Financial Adviser
and Corporate Broker)
|
+44 (0)1483 413500
|
Nick Emerson
|
|
|
|
Gracechurch Group (Financial
PR)
|
+44 (0)20 4582 3500
|
Harry Chathli, Alexis Gore, Henry
Gamble
|
|
References
1) RIM ASX Release
- 21 March 2024
2) CCZ ASX Release
- 1 June 2022
3) CCZ ASX Release
- 5 April 2022
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".