Cadence Minerals plc (LON:KDNC) has announced that initial due diligence undertaken by Castillo Copper on the Litchfield Lithium Project in Australia’s Northern Territory has highlighted significant pegmatite outcropping along the north-west boundary. This follows the Castillo announcement on Monday October 4th 2021, that preliminary due diligence on the Picasso Lithium Project, near Norseman in Western Australia, has verified multiple lithium surface occurrences across the tenure that align with pegmatite outcropping.
Highlights:
· Follow up site visit to the Litchfield Lithium Project in the Northern Territory highlighted significant pegmatite outcropping along the western boundary
· This is contiguous to Core Lithium’s Finnis Lithium Project1 which has JORC compliant ore reserves (7.4Mt @ 1.3% Li2O)1
· With satellite imagery2 verifying the geology in the Litchfield Lithium Project (NW quadrant) is comparable to CXO’s ground, CCZ is awaiting assay results on 657 surface samples (taken along the NW boundary) to determine the potential for contiguous mineralisation:
• Encouragingly, the site-visit geological reports noted the areas sampled mostly comprised metamorphic rocks linked to the Burrell Creek formation – a host rock for the regional occurrences of pegmatites.
As announced on September 29th 2021 by Castillo, satellite imagery has verified the geology along the Litchfield Lithium Project’s north-west boundary is comparable to CXO’s ground. Cadence’s geological consultant conducted intensive surface sampling across four target areas within the NW quadrant, taking 657 samples to determine the potential for contiguous mineralisation. The sampled areas mostly comprised metamorphic rocks linked to the Burrell Creek formation – a host rock for the regional occurrences of pegmatites. The samples are at the laboratory undergoing further analysis, with results expected in the coming weeks.
Castillo’s Managing Director Simon Paull commented: “Initial due diligence at the Litchfield Lithium Project is off to an excellent start, with demonstrable photographic evidence of pegmatite outcropping along the western boundary. The Board now awaits the outcome of assay results which will determine the potential for contiguous mineralisation with CXO’s Finniss Lithium Project.”
Overview
Lithium Technologies Pty Ltd and Lithium Supplies Pty Ltd, in which Cadence owns a 29% shareholding, each own 50% of Synergy Prospecting Pty Ltd (“Synergy”), and have granted, as announced on 29 September 2021, Castillo a 90-day option to acquire 100% of the outstanding shares of LT and LS and by implication 100% of Synergy.
During this 90-day period, Castillo will be conducting due diligence on all three entities to ensure the underlying assets are in good standing and there are no material adverse issues. Under the terms of the option agreement, Castillo can exercise its right to acquire LT, LS and Synergy at any time during the 90-day period.
Castillo Copper Limited is an Australian-based explorer primarily focused on copper across Australia and Zambia. The group is embarking on a strategic transformation to morph into a mid-tier copper group underpinned by its core projects:
· A large footprint in the in the Mt Isa copper-belt district, north-west Queensland, which delivers significant exploration upside through having several high-grade targets and a sizeable untested anomaly within its boundaries in a copper-rich region.
· Four high-quality prospective assets across Zambia’s copper-belt which is the second largest copper producer in Africa.
· A large tenure footprint proximal to Broken Hill’s world-class deposit that is prospective for zinc-silver-lead-copper-gold.
· Cangai Copper Mine in northern New South Wales, which is one of Australia’s highest grading historic copper mines.
The primary assets of Synergy, which are wholly-owned, comprise the Litchfield Lithium Project (EL31774) in NT and Picasso Lithium Project (E63/1888) in WA. In addition, Synergy has an application in NT – EL31828 – known as the Alcoota Lithium Project, which comprises ground proximal to Alice Springs. Castillo will need to undertake further geological due diligence on this application.
LT and LS also hold applications for six lithium properties in San Luis Province, Central Argentina. Again, Castillo will need to undertake further geological due diligence on these applications.
Further details on these assets and all the applications and permits are contained on our website.
Option terms & consideration
The terms of the 90-day option are as follows:
· A$50,000 non-refundable deposit in cash on formally granting the option that will go directly to Synergy for working capital purposes.
Upon exercising the option within the 90-day period, the binding consideration terms are as follows:
· A$1m script payment in CCZ shares will become payable to the Vendor Group based on the 14-day WVAP calculated from the date of which the option agreement is announced to the ASX. Note, the Vendor Group will be subject to a 6-month voluntary escrow period for 50% of the shares and 12-months for the 50% balance from the date of settlement. In addition, both parties agree to sign off on a binding term sheet.
Incremental consideration terms are applicable if the following milestones are achieved:
· A$1m script payment in CCZ’s shares to the Vendor Group based on the 14-day WVAP if two drill-holes produce assayed intercepts greater or equal to a true width of at least 10m @ 1.3% Li2O.Note, the two holes will be at least 100m apart, but not greater than 200m.
· A$1m script payment in CCZ’s shares to the Vendor Group based on the 14-day WVAP if a JORC compliant total inferred resource of at least 7Mt @ 1.3% Li2O is modelled by SRK Consulting.
· In the event of commercial mining operations commencing a 2% NSR will be payable to the nominees of the facilitator.
References
1. CXO ASX Release – 21 September 2021 (Annual Report) & CCZ ASX Release – 29 September 2021
2. Satellite imagery from Geological Survey of Western Australia. Available at: https://www.dmp.wa.gov.au/Geological-Survey/Geological-Survey-262.aspx & CCZ ASX Release – 29 September 2021
Cadence Minerals CEO Kiran Morzaria added: “We are pleased to note that the initial due diligence conducted by Castillo both at Litchfield and Picasso bears out the initial findings announced by Cadence to the market on March 4th 2019. We look forward to further developments”
