Proposed acquisition of three highly-prospective, complementary...

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    Proposed acquisition of three highly-prospective, complementary assets to double CCZ’s 100%-owned mineralised footprint across New South Wales and Queensland
     CCZ will be targeting three JORC compliant resources concurrently
     Sufficient preliminary data to generate JORC compliant resource for copper-cobalt at historic Cangai Copper Cobalt Mine, located in north-east NSW
     Resampling of core from Cangai Copper Cobalt Mine resulted in confirmation of high grade mineralisation of 190,000ppm copper, 1,860ppm zinc and 740ppm cobalt
     Modelling underway to calculate JORC compliant resource for zinc-cobalt at Peak Hill project area Broken Hill, NSW, which will now include newly acquired adjacent tenure with continuous mineralisation
     Timely, as demand for cobalt copper and zinc supply chains from `stable jurisdictions’ is set to continue growing moving forward
     Clear scalable strategy to fast-track production and generate cashflow via using third party processors
    The Board of Castillo Copper Limited (CCZ or Company) is delighted to announce that it has signed a binding Heads of Agreement with Total Minerals Pty Ltd (Total), which owns three cobalt & copper assets in NSW and Queensland (including the historic Cangai Copper Cobalt Mine in northeast NSW), to acquire all its outstanding issued shares (Proposed Acquisition). The key terms of the Proposed Acquisition are outlined in Annexure A.
    The Proposed Acquisition is highly strategic to CCZ’s forward prospects as:
    • The Total assets significantly increase the size of mineralisation and therefore the possible size of three compliant JORC resources;
    • Total’s three assets are directly complementary to CCZ’s current highly prospective project areas;
    • Combining the six assets’ area will effectively double the size of CCZ’s footprint, which materially enhances the commercial scalability of the operation;
    • Preliminary data is sufficient, without requiring drilling, to calculate a JORC compliant resource at Cangai Copper Cobalt Mine (Cangai) within the Jackaderry project area (NSW) and CCZ Peak Hill project in Broken Hill (NSW);
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    • Historic mining at Cangai mainly focused on shallow oxide copper with high grade cobalt mineralisation and deeper copper sulphide over looked;
    • Collectively, with modelling underway to generate a JORC compliant resource for the Peak Hill project area, CCZ will potentially have an Inferred Resource targeting zinc-copper-cobalt from its NSW assets based on legacy data; and
    • Demand for new cobalt supply chains from stable regions, away from the Democratic Republic of Congo, is set to accelerate on growing take-up of electric vehicles and energy storage units.

    CCZ ended up 50% for the week, closing at 2.4 with a high of 2.7. The timing of the announcement at 3.30pm did not really give investors much time to absorb the content. The fact that the share price did not close on the high of 2.7 indicates that there was selling into the news. There were comments in the Day Trading Thread so Day Traders may well have been active. Perhaps on Monday there will be another crack at buying in, however I think that if this happens then day traders may well be active again, so proper trade management will be important so holders are not left paying a premium potentially if the news is sold into. For the Company itself the agreement effectively means that their tenement footprint has been doubled, which "enhances the commercial scalability of the operation". There is a fair bit of work to be done in the pre mining stage and whilst Cobalt is the Trendy word at present, it does not mean that it is a free ticket for Cobalt stocks to ride on its coattails.

    "The Total Minerals Project occurs in an area which is known to have significant cobalt mineralisation in the southern Curnamona Craton, with large resources defined at the Pyrite Hill and Thackaringa deposits. This prospect has similarities to both these cobalt occurrences. However, it is unique in having low-copper and high-gold mineralisation associated with the cobalt surface gossans."

    Below is a copy of the proposed acquisition timeline. The important dates are now the 4th August where the finalisation of the share sale agreement is supposed to occur, and the completion 18th August.
    ccz attach 1 23.7.2017.PNG

    How much buying and flipping into the news is hard to say, but there will certainly be a fair bit imo. I think that if this sale does go ahead for CCZ it will be highly significant if they are able to bring a JORC together for the 3 projects. As always there is no certainty that the above will happen, but it appears that the new project is a good fit.

    Please DYOR as this is not a buy or sell recommendation
    Cheers
    GF
 
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