Castillo’s partnership strategy set to deliver value for Mt Oxide project and investors
Special report: Castillo Copper has decided the best strategy for taking its Queensland projects through to production is to bring in some muscle – an approach aimed at creating value for shareholders.
With the right high-calibre strategic partner, Castillo (ASX:CCZ) is aiming to develop a viable copper and cobalt mining operation at its highly prospective Mount Oxide project.
The project has a large mineralised footprint near Mt Isa and has delivered high grades of up to 2.99 per cent copper and 2400 parts per million (ppm), or 0.24 per cent, cobalt.
Anything over 1.5 per cent copper is considered high-grade, while cobalt grades of over 0.1 per cent are considered economic in the current strong price environment.
Last year’s re-opening of the Capricorn copper mine has prompted a revival in activity in the region. It is one of the largest copper development projects completed in Australia during the last decade.
The newly opened mine shipped first concentrate in February and is aiming to produce around 30,000 tonnes each year of copper concentrate over the next decade.
Castillo says the re-opening of the Capricorn mine validates its decision to acquire the Mount Oxide project.
Historic intersections at the Capricorn mine reached as high as 3600ppm cobalt at depth with similar grades reported at Mount Oxide in 2008 – which demonstrates the strong presence of cobalt mineralisation in the area.
The Big Oxide North and Hill of Grace prospects within the Mount Oxide project host multiple mineralised zones that are potential targets for the first drill program.
Since legacy explorers were focused on copper, gold and uranium mineralisation, there is significant exploration upside potential for cobalt.
Partners lining up
Castillo has already struck a deal with A-Cap Resources (ASX:ACB) for its Marlborough nickel and cobalt project near Rockhampton.
A-Cap will inject $2.25 million over two years on exploration of the highly prospective project to earn a 60 per cent stake in the project, with Castillo (ASX:CCZ) free-carried with 40 per cent.
Castillo chairman Peter Meagher says the deal is an “optimal outcome”.
“For Castillo, the benefit is being free-carried for a 40 per cent stake in the project through to bankable feasibility study, with an experienced strategic partner with significant China end-user connections,” he said.
Castillo’s strategy is two-pronged – leveraging experienced third parties for the Queensland projects, and using in-house expertise and resources to re-open the Cangai copper mine, while simultaneously progressing plans for a maiden drilling campaign at the Broken Hill project.
The company now has exploration teams concurrently in the field at the Cangai copper mine and “Area 1” at the Broken Hill project.
This special report is brought to you by Castillo Copper.
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