Castillo Copper Ltd (ASX:CCZ) has secured a strategic partner to explore the Marlborough Nickel-Cobalt Project near Rockhampton in Queensland.
The company and A-Cap Resources Limited (ASX:ACB) intend to form a joint venture and in this regard have signed a binding terms sheet.
This will see A-Cap invest up to $2.25 million over two years to fund exploration activities until the completion of a bankable feasibility study (BFS).
In prolific nickel-cobalt area
The work will entitle A-Cap to earn a 60% interest in the project, which is adjacent to Queensland Nickel mining leases.
Castillo Copper’s chairman Peter Meagher said: “This is a significant milestone for CCZ, as it is a win-win transaction on two fronts.
“Firstly, we are working with a first-rate strategic partner in ACB that brings project development expertise as well as prospective customers for nickel and cobalt in the all-important China market.
“Secondly, the ACB earn-in JV arrangement enables our Marlborough project to be optimised concurrently as we focus on re-opening the Cangai Copper Mine and developing the cobalt-zinc Broken Hill project.”
READ: Castillo Copper aims to add to Cangai copper bounty with phase II drilling
After completing a BFS Castillo may elect to fund its share of project development costs or otherwise resolve to dilute its JV interest.
A definitive JV agreement will be prepared and entered within 30 days of signing the terms sheet.
The project, which comprises three tenements, is just 3 kilometres north of Marlborough Nickel Pty Ltd's resource and mining leases.
The property is 3 kilometres from the Marlborough Nickel resource.
These leases contain proven and probable reserves of 48.7 million tonnes at 0.94% nickel and 0.06% cobalt within a total resource of 70.8 million tonnes.
Given significant legacy mining operations in the region, there is adequate supporting infrastructure, a skilled labour pool and access to ports.
A-Cap well connected in China
It is a timely transaction for both companies, particularly as demand for nickel-cobalt from the lithium-ion battery sector continues to grow, stimulating the search for new reliable supply chains.
A-Cap has connections in China that can deliver prospective customers for Australian sourced base-and-speciality metals.
The group’s interests span uranium, coal and base metals in Botswana, but it is looking to establish base-and-speciality metal operations in Australia.
Upon executing a JV agreement A-Cap intends to expedite exploration at the Marlborough project.
READ: Castillo Copper expedites cobalt exploration at Broken Hill project
Castillo’s flagship project is the historical Cangai Copper Mine near Grafton in northeast NSW.
The project comprises a volcanogenic massive sulphide ore deposit, with one of Australia’s highest grade JORC-compliant inferred resources for copper of 3.2 million tonnes at 3.35%.
In terms of contained metal, there 107,600 tonnes of copper, 11,900 tonnes of zinc, 2.1 million ounces of silver and 82,900 ounces of gold.
It also has the Broken Hill property consisting of two contiguous tenements prospective for cobalt-zinc within 20 kilometres of Broken Hill and just north of Cobalt Blue Holdings Ltd’s (ASX:COB) ground.
In Queensland, Castillo also has the Mt Oxide copper-cobalt prospect in the Mt Isa region.