Special report: Drilling at the Cangai mine continues to provide evidence that Castillo Copper has a high-grade polymetallic deposit on its hands.

Drilling returned a 9.6m intersection of massive sulphides from a shallow 50m that delivered grades of up to 4.57 per cent copper, 1.41 per cent zinc and 19.1 grams per tonne (g/t) silver.

The best hits delivered so far of the two drilling programs were 11m at 5.94 per cent copper, 2.45 per cent zinc and 19.1g/t silver from 40m, including 1m at 10.25 per cent copper, 1.68 per cent zinc and 32.5g/t silver from 48m.

“Exploration at the Cangai copper mine continues gaining momentum, with high-grade diamond drill core extracted from a shallow depth,” chairman Peter Meagher said.

“Further, the DHEM [down-hole electromagnetic] results have provided greater clarity on incremental sizeable massive sulphide conductors interpreted to be open at depth which may deliver the project scale.”

Undertaking DHEM surveys has been key to identifying several sizeable high-grade massive sulphide conductors under the Greenberg, Volkhardts and Mark lodes.

“The geology team are now optimising new priority targets, so the current drilling campaign can finish up, enabling the board to have a solid understanding of the ore body going into 2019,” Mr Meagher said.

Close to locking in early cash flow

Castillo’s plan all along has been to monetise the legacy stockpiles surrounding the Cangai mine to generate early cash flow.

There are five historic stock piles of high-grade ore located near the mine.

Metallurgical test-work confirmed copper concentrate recoveries of over 80 per cent and grades up to 22 per cent copper from the McDonoughs’ stockpile.

But Castillo expects new samples it has collected will show some improvement on the initial testwork conducted.

The company is getting closer to a binding deal to supply major Hong Kong-based commodities trader Noble Group copper from the stockpiles.

Castillo and Noble have already signed a memorandum of understanding to work quickly towards a formal deal that would see Noble exclusively sell up to 200,000 tonnes of copper concentrate from the existing stockpiles at Cangai.

Once the metallurgical results for the various stockpiles are returned, Castillo will work to finalise its agreement with Noble.


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