- Castillo Copper (CCZ) is diversifying its portfolio with two new Australian lithium projects
- The company has entered a 90-day option deal with three entities to acquire the Litchfield project in the Northern Territory and the Picasso project in Western Australia
- Both projects are close to major projects such as Core Lithium’s Finniss project and Liontown Resources’ Buldania project
- Castillo will pay a $50,000 deposit and, upon exercising the option, it will make a $1 million scrip payment of its shares
- Company shares are up 12.5 per cent to trade at 3.6 cents at 12:06 pm AEST
Castillo Copper (CCZ) has entered a 90-day option agreement to acquire two Australian lithium projects.
According to the company, the projects will diversify its portfolio and allow it to potentially create significant value during the global transition to renewable energy and the “surging demand” for electric vehicles.
Litchfield
The Litchfield Lithium Project is in the Northern Territory and strategically neighbours Core Lithium’s (CXO) Finniss Lithium Project which has four spodumene lithium deposits and an ore reserve of 7.4 million tonnes at 1.3 per cent lithium dioxide.
Based on satellite imagery analysis, there may be potential for lithium pegmatite bodies along Litchfield’s northwest boundary which is the primary exploration target area.
Picasso
The Picasso Lithium Project is around 50 kilometres from Norseman which is a well-known lithium producing region as it hosts two major lithium mines which have a combined resource tonnage of 97 million tonnes.
Further, Picasso is just 20 kilometres from Liontown Resources’ (LTR) Buldania lithium project, which has a mineral resource of 14.9 million tonnes at 0.97 per cent lithium dioxide.
The Geological Survey of Western Australia mapped granitic pegmatites at the Picasso project which typically host lithium-bearing minerals like spodumene.
Managing Director Simon Paull commented on the potential acquisitions.
“Acquiring prospective lithium projects, which complement the copper assets, arguably provides CCZ a strong comparative advantage moving forward,” Mr Paull said.
Agreement terms
Owners of Lithium Technologies (LT) and Lithium Supplies (LS), who each own 50 per cent of Synergy Prospecting, have granted CCZ the 90-day option to acquire all of the outstanding shares of LT and LS, and therefore 100 per cent of Synergy Prospecting.
During the 90-day period, Castillo Copper will conduct due diligence on the three entities to ensure their assets are in good standing and there aren’t any issues.
Castillo will pay a $50,000 cash deposit which will directly go to Synergy for working capital purposes.
Upon exercising the option, the company will make a $1 million scrip payment of its shares which will be based on the 14-day volume-weighted average price from the date the option agreement is announced.
Subject to meeting certain milestones, two $1 million scrip payments in CCZ shares will be payable.
Company shares were up 12.5 per cent to trade at 3.6 cents at 12:06 pm AEST.