Castillo Copper : Quarterly Activities Report - June 2022

ASX/LSE: CCZ22 July 2022

			JUNE 2022 QUARTERLY
use only	Exploration with Purpose	ACTIVITIES REPORT
Highlights
personal	o EAST ZONE, BHA PROJECT
		 Maiden Mineral Resource Estimate (MRE) to the JORC (2012) Code for BHA
		Project's East Zone is 64Mt @ 318 ppm Co for 21,556t contained metal at relatively
		shallow depths1
		 Further, the global MRE includes 44,260t of contained copper (63Mt @ 0.07% Cu)1
	o	ZAMBIA
		 London-based, Hyperion Copper, granted a 12-month option to acquire 100%-
For		owned subsidiary, Zed Copper (Zed), which owns four assets in Zambia's copper-
	belt including the prime Luanshya and Mkushi Projects1
	 Hyperion Copper paid a non-refundable US$100,000 fee (~A$142,000) for the
	exclusive option and, if exercised, will issue £2.25m (~A$4m) in Hyperion shares
	to acquire 100% of the issued capital of Zed1
	 Further, CCZ will receive £1.5m (~A$2.7m) in Hyperion shares upon a global MRE
	of 200,000t contained copper metal being delineated1

CASTILLO COPPER | 1

ACTIVITIES REPORT

Castillo Copper Limited's ("CCZ") Board is pleased to present shareholders its latest quarterly report for the period 1 April to 30 June 2022.

During the period, most of the focus remained on developing the cobalt potential at the East Zone, BHA Project in Broken Hill and successfully negotiating an option to sell the Zambia Projects.

onlyAn overview of key events follows:

DEVELOPMENT WORK

CCZ has four properties comprising the NWQ Copper Project in Mt Isa's copper-belt, the BHA Project near Broken Hill's world class silver-zinc-lead deposit in NSW, the historic Cangai Copper Mine and four assets across Zambia's copper-belt.

East Zone, BHA Project, NSW

useThe new cobalt assays, especially from Fence Gossan, are relatively shallow (from surface to circa
100m) and include several standout intercepts which align with earlier results at the Tors & Reef
Tank1 Prospects (Figure 1 & 2).
FIGURE 1: BEST ASSAYED INTERCEPTS - DEFINED TARGET AREA
personal		Prospect:		Best Intercepts
		Prospect
		New	- Fence			23m @ 660ppm Co from 28m including
		Gossan Prospect:
				3m	@ 1,300ppm Co from 37m	(3E49N)
						4m	@ 925ppm Co from 53m including
						2m	@ 1,300ppm Co from 55m	(3E45N)
						4m	@ 647ppm Co from 46m including
						1m	@ 1,700ppm Co from 48m	(TT05W10N)
						3m	@ 620ppm Co from 52m including
						1m	@ 1,100ppm Co from 54m	(TT05W14N)
						2m	@ 500ppm Co from 7m (TT4W035S)1
		New -	Ziggy's Hill		14m @ 262ppm Co from 84m including
For						1m	@ 600ppm Co from 93m (ZIG01)
					6m	@ 336ppm Co from 39m (RABZIG097)
					7m	@ 250ppm Co from 5m (ZH0210W)1
		Reported - Tors &			15m @ 760ppm Co from 67m including
		Reef	Tank			3m @ 1,500ppm Co from 70m	(3E51N)
		Prospects:
				5m	@ 1,200ppm Co from 15m	(AGSO2740)
						10m @ 510ppm Co from 5m including
						5m	@ 690ppm Co from 10m (AGSO2716)
						7m	@ 1,600ppm Co from 30m	(1800E1180N)
						10m @ 520ppm Co from surface (2925E1240S)
						5m	@ 520ppm Co from 45m (TT05W10N)1

On 13 April 2022, CCZ announced compelling new assays uncovered at the Fence Gossan and Ziggy's Hill Prospects within the Defined Target Area which provided incremental evidence there is potentially an extensive cobalt system apparent within the BHA Project's East Zone1 (Figure A1, Appendix A).

Source: CCZ geology team

CASTILLO COPPER | 2

On 5 May 2022, diamond core assay results for drill-hole BH1 at The Sisters Prospect confirmed significant cobalt mineralisation, with the best intercept:

24m @ 424ppm Co from 103m including 2m @ 1,120ppm Co from 107m; 1m @

873ppm Co from 120m; and 2m @ 486ppm Co from 125m (BH1)1

Notably, the new assays are in line with previously reported results from within the Defined Target Area1 (Figure 2).

onlyFIGURE 2: DRILL-HOLES & PROSPECTS; EAST ZONE, BHA PROJECT

usepersonalSource: CCZ geology team

On 1 June 2022, CCZ announced the maiden MRE to the JORC (2012) Code for BHA's Project's East Zone totaled 64Mt @ 318 ppm Co for 21,556t contained cobalt metal (Figure 3) at relatively shallow depths (0-80m). Furthermore, the global MRE has 44,260t (64Mt @ 0.07% Cu) of contained

copper metal that enhances the overall result1.

For

FIGURE 3: JORC RESOURCE TONNAGES BHA EAST ZONE PROSPECTS

Deposit

Prospect

Model

Cut-

Inferred

Co

Cu

Contained

Contained

Area

Surface

off

Cobalt

Copper

Mask

Area

Ha

Ha

Co

Mt

ppm

%

t

t

ppm

Fence

2,335

218

125

22.1

315

0.08

6,962

17,680

Gossan

Reefs

5,363

2362

180

42.3

345

0.06

14,594

26,580

Tank

64.4

318

0.07

21,556

44,260

Notes: (1)

Contained content reported is insitu at 100%, no mining assumptions or dilution yet applied.

Source: CCZ geology team

CASTILLO COPPER | 3

Moving forward, to extend known cobalt mineralisation, primary targets have already been factored into an inaugural drilling campaign which the Board plans to progress. Further, the Board intends to open discussions with potential off-take partners keen to lock in future cobalt supply chains and actively participate in the NSW government's critical minerals initiative1.

Zambia

onlyOn 5 April 2022, an Induced Polarisation survey campaign undertaken at the Mkushi Project highlighted multiple zones of high chargeability coincident with known copper soil anomalies.

More significantly, according to the geophysicist's interpretation, these are potential bodies of disseminated copper sulphide mineralisation and prime targets to test drill.

On 22 June 2022, in a landmark deal, CCZ announced that it granted London-based Hyperion Copper a 12-month option to acquire 100%-owned subsidiary, Zed, which owns four projects in Zambia's copper- belt - including the prime Luanshya and Mkushi Projects (Figure A2, Appendix A) - for total consideration of £3.75m (A$6.7m) in a value creating transaction.

useThe Board believes this is an excellent outcome for all stakeholders since it secures a strategic partner that is committed to fully develop the exploration potential of the Zambia projects. Moreover, with Hyperion Copper planning to list on the LSE's AIM market in 2H 2022, CCZ is set to accrue benefits via retaining its shareholding in Hyperion post listing.

Hyperion is positioning itself as an Africa-focused,copper-gold explorer as it owns 100% of the Yansse Gold Project in Burkina Faso. Notably, the Yansse Gold Project which is located in the highly prolific West African Birimian Terrane, which is host to some of the world's largest gold deposits.

CORPORATE

personal	 Board changes: On 1 April 2022, CCZ announced that Mr Ged Hall (non-executive director based
Zambia."
	in London) was promoted to Chairman and Dr Dennis Jensen to Managing Director (from CEO).
	These promotions follow on post the retirement of long-standing Chairman, Mr Rob Scott, with effect
	from 31 March 2022.
	 Strategic update: On 7 June 2022, Managing Director Dr Dennis Jensen summarised CCZ's latest
	strategy: "The Board's strategic intent is to create value for shareholders via developing the core
	projects. With cobalt remaining over U$$70,000/t, the priority is to extend known mineralisation
	across the BHA Project's East & West Zones via targeted drilling campaigns and formalising a clear
	path to market. Similarly, with copper above US$9,000/t, 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

POST PERIOD EVENT

For



Big One Deposit, NWQ Copper Project: On 19 July 2022, preliminary metallurgical test-workon samples extracted from drill-holeBO_318RC1 at the Big One Deposit, produced a concentrate with confirmed upgrades ranging from 5x to 10x for copper metal, with the best result: 0.72% Cu head- grade to 7.2% Cu post-test-work.

CASTILLO COPPER | 4

INFORMATION REQUIRED UNDER ASX LISTING RULES

1. ASX LR 5.3.5

During the quarter $98,000 was paid to related parties of the Company relating to executive director consulting fees and non- executive director fees.

2. ASX LR 5.3.1
The exploration and evaluation activity spend for the quarter consisted of:
only
		Consulting fees	Rates and mines
use			departments fees
Cangai	$36,000	-
Broken Hill Alliance	$141,000	$1,000
Mt Isa	$45,000	$26,000
	Zambia	$15,000	-
	Total	$237,000	$27,000

personal3. ASX LR 5.3.3

Please refer to Appendix C for details of the Company's interests in exploration and mining tenements.

The Board of Castillo Copper Limited authorised the release of this announcement to the ASX.

Dr Dennis Jensen

ForManaging Director

1) Note - All information referenced is from CCZ ASX Releases, as dated in text, from 1 January 2022 to 28 April 2022 inclusive

CASTILLO COPPER | 5