Castillo Copper : Strategic update

ASX/LSE: CCZ

7 June 2022

Strategic update: Creating value developing core projects

onlyuse	Exploration with Purpose
personal	Strategic Update
	Castillo Copper's Managing Director Dr Dennis Jensen commented: "The Board's core
	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 Zambia".

BHA PROJECT - EAST & WEST ZONE

ForFollowing the announcement of a shallow inferred Mineral Resource Estimate (MRE) at 21,556t contained cobalt metal (64Mt @ 318 ppm Co)1 for the BHA Project's East Zone, the geology team are defining an exploration target which will factor in several more prospects and deeper depths.

Further, the geology team are finalising planning and approvals for two RC drilling campaigns across the BHA Project. The first will focus on extending known cobalt mineralisation within the East Zone, while the second will test targets identified in the West Zone2 which is proximal to Cobalt Resources' (ASX: COB) Broken Hill Project3 (Figure 1).

Since announcing the MRE, the Board has been approached by several groups interested in becoming potential off-take partners and providing a clear path to market. To aid progressing these discussions to an eventual definitive outcome, the Board has dispatched diamond drill core - extracted from The Sisters Prospect4 - for metallurgical analysis and potential to create a cobalt concentrate suitable for downstream applications.

As the BHA Project is listed on the NSW government's critical minerals list5, the Board intends to engage with key stakeholders to see what potential support can be secured to aid developing the cobalt potential at a faster pace.

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FIGURE 1 : WEST AND EAST ZONE - BHA PROJECT

onlyusepersonalSource: CCZ geology team

NWQ Copper Project

Big One Deposit

Having produced a shallow MRE at 21,886t contained copper metal (2.1Mt @ 1.1% Cu)6, the Board has been reviewing the optimal paths to market. This has involved discussions with several parties with processing operations in the Mt Isa copper-belt region that are potential off-take partners (Figure 2 & Appendix A). In tandem with this process, diamond drill core samples have been sent for metallurgical analysis and potential to produce a viable copper concentrate for downstream analysis.

The Board believes there is a reasonable prospect of securing an off-take partner, as many of the processing operators are operating below optimal capacity.

In addition, the Board is planning another RC and diamond core drilling campaign for the Big One Deposit which will focus on extending known mineralisation and elevating confidence in the MRE.

For

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FIGURE 2 : NWQ COPPER PROJECT, MT ISA COPPERBELT

onlyuse personalSource: CCZ geology team

ForArya Prospect

The Board is waiting for the final geological report on the graphite discovery7 which will include a metallurgical analysis on the flake size composition.

However, as there is still strong geochemistry and geophysical evidence suggesting copper mineralisation potential7, the geology team have developed another proof-of-concept campaign that will target a sizeable magnetic anomaly. This is interpreted to be massive sulphides with potential to host copper mineralisation. Note, this differs from the large electro-magnetic anomaly drilled in late 2021 which produced the graphite discovery.

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Cangai Copper Mine

Like its sister project in NSW, the Cangai Copper Mine features on the NSW government's critical minerals list5. As such, the Board intends to see the degree of government support that can be secured to aid further advancing the Cangai Copper Mine, considering it has an MRE at 107,589t contained copper metal (3.2Mt @ 3.35%)8 and is one of Australia's highest grading historic copper mines.

onlyIn addition, the Cangai Copper Mine still delivers significant exploration potential as there are several untested bedrock conductors that are interpreted to be open at depth8.

Factoring in these positive points, the Board is in preliminary discussions with several prospective development partners to further advance the Cangai Copper Mine.

FIGURE 3 : CANGAI COPPER MINE

usepersonalSource: CCZ geology team For

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Zambia Copper Projects

The comprehensive geochemistry and geophysical campaigns undertaken at the Luanshya and Mkushi Projects in Zambia (Figure 4) have identified multiple high quality copper targets for drill- testing9.

Pleasingly, several prospective development partners have expressed an interest in forming a Joint- Venture to advance these two projects via funding drilling campaigns.

onlyMoving forward, the Board is optimistic that progressing discussions further could potentially secure an outcome.

FIGURE 4: ZAMBIA PROJECTS

usepersonalSource: CCZ geology team

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

Dr Dennis Jensen

Managing Director

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