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Castillo Copper Limited (ASX:CCZ) has announced a joint venture with A-Cap Resources (‘A-Cap’, ASX: ACB). A binding term sheet to explore the Marlborough nickel-cobalt project, near Rockhampton in north-east Queensland, has been signed. Highlights of the announcement include the following.
Analyst comments: although the Marlborough project is highly prospective, it is a non-core asset of Castillo’s and has added little, if any, value to the company’s current share price.
The terms of the joint venture are favourable for Castillo (as outlined above). Moreover, it will retain a 40% interest in the project if a discovery is made without having to contribute any further expenditure until completion of a bankable feasibility study. Considering the limited amount of exploration work at the project to date, and the funds likely to be required to advance the project towards this stage of development, it is an excellent outcome for Castillo.
Importantly for Castillo, both its funds and management time will remain totally focused on its main assets at Cangai and Broken Hill. We look forward to initial assay results from the ongoing exploration drill program at Cangai to be release in late August/early September. We maintain our assessment of Castillo as a SPECULATIVE BUY.
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