Castillo Copper : Half Year Financial Statements

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CASTILLO COPPER LIMITED

ABN 52 137 606 476

Half-year Financial Report

31 December 2021

Castillo Copper Limited

CORPORATE DIRECTORY

Directors

Robert Scott (Non- Executive Chair)

For personal use only

Gerrard (Ged) Hall (Non-Executive Director) Geoff Reed (Executive Director)

Company Secretary

Dale Hanna

Registered Office and Principal Place of Business

45 Ventnor Avenue,

West Perth, WA 6005 Australia

Australia

Telephone: + 618 6558 0886

Facsimile: + 618 6316 3337

Share Registry

Automic Registry Services Pty Ltd

Level 5

191 St Georges Terrace,

Perth, WA 6000

Telephone:	+ 1300 288 664
Facsimile:	+ 618 9324 2099

Auditors

HLB Mann Judd (WA Partnership)

Level 4

130 Stirling Street,

Perth, WA 6000 Australia

Securities Exchange Listing

Australian Securities Exchange

(Home Exchange: Perth, Western Australia)

ASX Code: CCZ

London Stock Exchange

LSE Code: CCZ

Castillo Copper Limited

For personal use only

Contents

Directors' Report

Auditor's Independence Declaration

Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income Condensed Consolidated Statement of Financial Position

Condensed Consolidated Statement of Changes in Equity

Condensed Consolidated Statement of Cash Flows

Notes to the Condensed Consolidated Financial Statements

Directors' Declaration

Independent Auditor's Review Report

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Castillo Copper Limited

For personal use only

DIRECTORS' REPORT

The directors of Castillo Copper Limited and its subsidiaries ("Castillo", "CCZ" or the "Group") submit the financial report of the Group for the half-year ended 31 December 2021. In order to comply with the provisions of the Corporations Act 2001, the directors report as follows:

Directors

The names of directors who held office during or since the end of the half-year and until the date of this report are as below. Directors were in office for this entire period unless otherwise stated.

Robert Scott	Non-Executive Chairman
Simon Paull	Managing Director (resigned 31 January 2022)
Gerrard (Ged) Hall	Executive Director
Geoff Reed	Non-Executive Director (Executive Director from 1 February
2022)

Results

The loss after tax for the half-year ended 31 December 2021 was $781,670 (31 December 2020 loss of $1,138,450).

Review of Operations

During the financial period, the principal activity of the Group was mineral exploration and examination of new resources in eastern Australia and Zambia. Specifically, the Group has four properties comprising NWQ Copper Project in Mt Isa's copper-belt, four assets across Zambia's copper-belt, historic Cangai Copper Mine and BHA Project - a large footprint near Broken Hill's world class silver-zinc-lead deposit in NSW.

The main focus was to continue developing the core assets to ensure the strategic intent to transform Castillo Copper into a mid-tier copper group remained on track.

A more detailed summary of key events follows:

MT ISA COPPER-BELT, QUEENSLAND

Big One Deposit & Arya Prospect

On 15 July 2021, CCZ announced the intersection of significant visible copper mineralisation in drill-hole BO_318RC in two distinct zones - 11m from 89-100m and 34m from 153-187m (apparent thickness).

Reconciling these new data points with the geological modelling completed to date, clearly verified material extensions to known mineralisation and potentially a larger underlying system than initially envisaged.

A key feature behind the success of the current campaign (Figure 1) has been the significantly improved targeting, resulting from the effective utilisation of geophysical insights to refine and reshape the drilling program to boost the collective exploration potential.

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Castillo Copper Limited

DIRECTORS' REPORT (continued)

FIGURE 1: DRILL RIG AT BIG ONE DEPOSIT

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Location: 7,880,306E, 335,422N

Source: CCZ geology team

On 26 July 2021, CCZ announced up to 9% copper in Big One Deposit assays plus more visible mineralisation up to 26m thick. Initial assays for drill-holesBO_315-317RC verified up to 9.19% Cu and clearly extended known mineralisation - the best intercepts are summarised below:

• 9m @ 1.42% Cu from 88m including 4m @ 3.06% Cu from 92m & 1m @ 9.19% Cu from 92m (BO_317RC),
• 5m @ 1.06% Cu from 141m (BO_316RC) and
• 3m @ 1.22% Cu from 65m (BO_315RC).

On 10 August 2021, CCZ announced logistics were in place to test drill the 130m thick target at the Arya Prospect. All key logistics to enable work to commence at the prime Arya Prospect were finalised during the September 2021.

A re-interpretation of legacy data by CCZ's geophysicist consultant - which enabled better targeting at the Big One Deposit - provided new insights and re-emphasised the Arya Prospect's merits as a major exploration target in Mt Isa's copper-belt. Notably, re-processing data from AusAEM Survey, commissioned by Geoscience Australia, shows the EG01 anomaly - interpreted to be 130m thick, 1,500m long & 450m wide - is only around 100-200m deep (Figure 2).

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