Special report: Castillo Copper has attracted the likes of major Hong Kong-based commodities trader Noble Group, which is interested in helping the emerging producer generate early cash from its Cangai copper mine.

Castillo (ASX:CCZ) and Noble have signed a memorandum of understanding to work quickly towards a binding off-take (sales) agreement that would see Noble exclusively sell up to 200,000 tonnes of copper concentrate from the existing stockpiles at Cangai.

The company had been advancing its plans to monetise the legacy stockpiles after metallurgical test-work confirmed copper concentrate recoveries of over 80 per cent and grades up to 22 per cent copper.

The project hosts five historic stock piles of high-grade ore located near the Cangai mine.

“We are delighted to have signed a collaboration agreement with Noble Group, with the objective being to generate early cash flow by processing of the legacy stockpiles at Cangai, provided regulatory approval can be secured and further test work on the stockpiles is successful,” chairman Peter Meagher said.

“The board intends to work diligently with our counterparts from Noble Group to ensure a binding off-take agreement can be achieved in a timely manner.

“Concurrently, our legal team are working through the necessary legislative protocols that should hopefully deliver the necessary ministerial consent to remove the stockpiles.”
Once a binding off-take agreement has been signed, Noble will hand Castillo a $500,000 pre-payment for working capital purposes, subject to satisfactory due diligence and definitive long form documents.

This latest news continues Castillo’s successful run at Cangai.

Earlier in October the company revealed that electromagnetic surveys aimed at detecting accumulations of massive sulphide mineralisation at the Cangai mine identified several sizeable conductors.

Massive sulphide ore deposits are often associated with copper.

The “Downhole ElectroMagnetics” surveys (or DHEM) measure conductivity and resistance by transmitting an electric field into the rocks — which is converted to a magnetic field if the rocks are conductive.

This helps explorers uncover strong conductors or massive sulphide ore bodies located some distance away from the drill hole.

The goal is to identify conductors associated with massive sulphides to reinforce drilling results from August. Results included 11m at 5.94 per cent copper, 2.84 per cent zinc and 19.13 grams per tonne silver from 40m.

Anything above 1.5 per cent copper and 50 g/t silver is considered high-grade.

Castillo is continuing drilling and DHEM work has started on the drill holes from the phase one program to evaluate the conductors found.


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