Castillo partners with global base metal trader to monetise legacy ore stockpiles
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Castillo Copper Limited (ASX:CCZ) has signed an MOU with Noble Group, a global base metal and commodities trader, that provides a clear avenue to monetise the legacy stockpiles at Cangai Copper Mine.
The Cangai Copper Mine, near Grafton in northeast NSW, is CCZ’s flagship project. The project comprises a volcanogenic massive sulphide (VMS) ore deposit, with one of Australia’s highest grade Inferred Resources for copper: 3.2Mt at 3.35% copper. In terms of contained metal, the Inferred Resource is 107,600t copper, 11,900t zinc, 2.1Moz silver and 82,900Moz gold. Notably, supergene ore with up to 35% copper and 10% zinc is present, which is ideal feedstock for direct shipping ore.
CCZ, with Noble Group, will work towards delivering a binding off-take agreement enabling Noble to exclusively distribute up to 200,000t of copper concentrate from existing stockpile ore.
Upon signing a binding off-take agreement, which the parties aim to expedite, Noble Group will pay CCZ a A$500,000 pre-payment for working capital purposes, subject to satisfactory due diligence and definitive long form documents.
CCZ continues to undertake metallurgical test-work on the stockpile ore which has already demonstrated copper concentrate recoveries >80%, with the grade up to 22% copper.
It is also working to secure regulatory approval to remove the stockpiles and closely follow the legislative protocols to secure the ministerial consent to do so. Work will continue in an attempt to expedite the process, in parallel with CCZ moving towards crystallising the binding off-take agreement.
CCZ continues to progress the diamond drilling campaign at Cangai Copper Mine, focusing on massive sulphide conductors identified during the first DHEM survey program. At the same time, the DHEM survey team will be commencing work on drill-holes from the Phase I campaign to evaluate conductors found from the fixed loop electromagnetic program.
CCZ Chairman Peter Meagher commented: “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.
“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.”