Castillo Copper Ltd (LSE:CCZ, ASX:CCZ) has reassessed its core strategy, choosing to prioritise growth of the Broken Hill Alliance (BHA) Project’s cobalt mineralisation in western New South Wales and the NWQ Copper Project’s Big One copper deposit in northwest Queensland.
This new strategy will also see the company seek development partners to advance assets at Cangai Copper Mine in northern NSW and four other prospective projects in Zambia's Copperbelt.
High commodity prices of US$70,000 per tonne for cobalt and US$9,000 per tonne for copper have prompted Castillo’s new strategy, which seeks to take advantage of the high demand forecast for both minerals.
“The board’s core strategic intent is to create value for shareholders via developing the core projects,” Castillo Copper managing director Dr Dennis Jensen said.
“With cobalt remaining over US$70,000 per tonne, the priority is to extend known mineralisation across the BHA Project’s East and West Zones via targeted drilling campaigns and formalising a clear path to market.
“Similarly, with copper above US$9,000 per tonne, the board will apply the same formula for the Big One Deposit within the NWQ Copper Project.
“Concurrently, the board intends to align with development partners to advance the Cangai Copper Mine and four prospective copper projects in Zambia.”
BHA Project East and West Zone
Castillo's geology team at the BHA Project near Broken Hill is defining an exploration target, having recently announced a shallow inferred mineral resource estimate (MRE) of 21,556 tonnes of contained cobalt metal.
The company is finalising planning and approvals for two reverse circulation (RC) drilling campaigns across the project, designed to extend known cobalt mineralisation in the East Zone and test targets identified in the West Zone, near Cobalt Blue’s Broken Hill project.
Castillo says it has been approached by several groups interested in becoming offtake partners since announcing the MRE, providing a clear path to commercialisation.
To aid these discussions, CCZ has dispatched diamond core from the Sisters Prospect for metallurgic analysis to determine its suitability for cobalt concentrate and other downstream applications.
The Castillo board intends to engage with key shareholders regarding potential support in developing the BHA Project at a faster pace, given its presence on the NSW Government’s critical minerals list.
NWQ Copper Project – Mt Isa Copperbelt
Castillo has also produced a shallow MRE at NWQ, fielding 21,886 tonnes of contained copper metal.
In the same vein as BHA, the company is engaging with potential offtake partners – specifically those with processing operations at Mt Isa – and diamond drill cores have again been set for metallurgic analysis to determine viability for copper concentrate and similar downstream applications.
The board says it is reasonably confident it will be able to secure an offtake partner, as several local processors are operating below desired capacity.
CCZ will conduct RC and diamond drilling campaigns on the Big One deposit, focused on extending known mineralisation and elevating confidence in measured resources.
The NWQ project holds additional upside in the Arya prospect, where flake graphite has been discovered and will be put through its metallurgic paces imminently.
There is also strong geochemical and geophysical evidence of copper mineralisation potential, which will be followed-up with a proof-of-concept campaign targeting a sizable magnetic anomaly.
The company has interpreted this anomaly to host massive sulphides with potential for copper mineralisation.
Cangai Copper Mine
The Cangai Copper Mine also features on the NSW Government’s critical mineral list, indicating it may receive some government support in developing the project, especially given its MRE of 107,589 tonnes of contained copper.
The company believes Cangai has ‘significant’ exploration potential, as it still holds several untested bedrock conductors interpreted to be open at depth.
Castillo is in preliminary discussions with several potential development partners to further advance Cangai.
Zambia Copper Projects
Castillo is confident comprehensive geochemistry and geophysical campaigns undertaken at the Luanshya and Mkushi projects in Zambia have identified multiple high-quality copper targets for drill testing.
The company is also encouraged by interest from several prospective development partners wishing to form a joint venture (JV) to advance these two projects via funding drilling campaigns.
The board is optimistic that further discussions could secure a positive outcome.