What does shallow copper oxide observation at Big One mean for Castillo Copper (LON: CCZ)?

Summary

• Castillo Copper has intercepted copper and sulphide deposits in Queensland (Australia)
• An update is expected shortly; the drilling campaign at the Big One Deposit is gathering momentum
• The shares of the metal miner have soared by more than 15 per cent in a year’s time

Base metal explorer Castillo Copper Limited (LON:CCZ) has observed shallow sulphide and copper oxide mineralisation within the company's fully owned Mt Oxide Project located in the Mt Isa copper-belt district of Queensland (Australia) at the Big One Deposit site.

The Mt Oxide Project is located in the copper-belt district, approximately 150 kilometres north of Mt Isa in north-west Queensland in Australia. The Big One Deposit is currently the main highlight of the Mt Oxide Project, being the main exploration target comprising shallow high-grade supergene ore that contains a significant amount of copper.

Besides, an airborne electromagnetic survey conducted by Geoscience Australia in March 2019 led to the discovery of the Arya Prospect. Notably, Castillo Copper also owns one of the Australia's highest grading historic copper mines -- Cangai Copper Mine located in northern New South Wales.

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The metal mining company discovered these minerals from samples earlier taken during drilling activities conducted at the first seven holes located at Big One site. Last month, a 35-hole RC (reverse circulation) drilling programme started at the Big One Deposit site. The drilling and exploration activities were planned to test for mineralisation up to 190 metres below surface, targeted at a dedicated strike zone of around 580 metres by 120 metres.

(Source: Company’s filings, LSE)

These discovered samples of deposits have yielded positive results from the previous drilling, which included up to 28.4 per cent copper, however, assays are being expedited for any holes of this current program at Big One.

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This is an exceptional achievement for the company as it managed to discover copper oxide and sulphide mineralisation at shallow depths in the initial phase of an extensive drilling programme. The company looked forward to receiving the assay results and is delighted with the early success. The company still has a significant exploration upside ahead with around 28 drill-holes to complete.

These results are encouraging for the company as the discovered mineralisation is wide, ranging from nine metres to thirteen metres that can help the metal miner in enhancing its scale of operations at the Big One. The samples from the drilling campaign have been sent to the lab for further analysis.

The plans for the Big One Deposit drilling campaign on 14 July by Castillo consists of a 4,385m RC campaign, with more than 35 drill-holes, which are expected to test for mineralisation from 26m up to 190m below surface along with a strike zone of 580m by 120m. In addition, the company tested shallow mineralisation from 26m up to 52m below surface for its 160m diamond drilling campaign.

In August, Castillo prioritised the Mt Oxide Project and mustered all the funding required for ramping up its exploration efforts across its Tier 1 asset.  The company believed that the Big One Deposit could potentially be part of a larger IOCG (iron-oxide-copper-gold) mineralised system after it identified massive hematite/cuprite chalcocite vein mineralisation.

Notably, Castillo's geology team pegged 35 drill-sites at Big One Deposit on 19 August to commence the drilling campaign. By the end of August, the metal miner appointed Depco Drilling as the lead contractor for the upcoming RC and diamond drilling campaigns at the Big One Deposit and Arya Prospect by signing an agreement with the Queensland based group.

The company seems to be in a good space as it is able to simultaneously progress exploration programmes in Australia and Zambia. The company now has 8 priority targets across the Mkushi Project, Zambia, which could commence test drilling in 2021 as they are expected to deliver good results.

In Zambia, the company continued to make progress across multiple assets as the soil anomaly results obtained from the extended mineralisation along strike from a known operating copper mine were encouraging. 

According to its quarterly report ended September, the cash balances of the company stood at A$ 4,486,000. Castillo Copper shares were hovering around GBX 2.95 at GMT 01:02 PM+1 on 16 November, up by 11.32 per cent from the previous day closing price level on the backdrop of striking Copper mineralisation at the Big One. The metal miner’s market capitalisation was hovering around £26.82 million. The shares of the metal miner have soared by more than 15 per cent in a year’s time.