The company said there were unmined high-grade supergene copper ore working sections, about 50km east of Grafton, and calculated an inferred resource of 3.2 million tonnes grading 3.35% copper, implying some 108,000 tonnes of contained copper.
Consultants ROM Resources calculated that on a metal equivalent basis there was an inferred resource of 4.2% copper equivalent, 9.3% zinc equivalent, 6.9 grams per tonne gold equivalent and 503.9gpt silver equivalent.
Castillo is still waiting assay results for legacy core samples to estimate the cobalt potential of the mine.
Executive director Alan Armstrong said in a statement to the Australian Securities Exchange yesterday that the copper-zinc-cobalt resource size for the Jackaderry project was set to increase substantially with incremental historic assay results and Castillo’s maiden drilling campaign.
The drilling will target additional supergene ore mineralisation as 3D modelling has confirmed the deposit is open in all directions.
The same modelling suggests the mine can be redeveloped using an open pit, given the resource is relatively shallow and located on the top of a hill.
That would keep extraction costs moderate, which combined with blacktop all the way to the Port of Newcastle and the likelihood of producing direct shipping ore could give Castillo a competitive advantage under any development scenario.
Armstrong said the promising numbers were an “outstanding start” in the company’s mission to return the mine to production.
Earlier this week, Castillo closed the acquisition of unlisted Total Iron assets, which gave it five new copper-cobalt-zinc-nickel prospects across NSW and Queensland, for a total of 11.
They included the Jackaderry Southwest cobalt prospect, which exhibits contiguous mineralisation with Jackaderry South, which hosts Cangai.
In Queensland it adds the Alpha cobalt project, enhancing the Mt Oxide project and brings three Marlborough cobalt-nickel prospects into the fold in Queensland.
It is now working to develop four JORC complaint inferred resources – two from legacy data at Jackaderry and Broken Hill and two from maiden drilling programs.
Cangai was discovered in 1901 and was in production between 1904 and 1917, but only ore greater than 13-15% copper was extracted using manual techniques.
Some 5080 tonnes of copper, 1035 kilograms of silver and 53kg of gold were produced before it was abandoned.
Western Mining and CRA Exploration separately looked at the area in the 1980s and 1990s.
WMC walked away because it found little encouragement, while CRA, which concluded WMC had looked in the wrong location, dropped the area because of depressed metal prices.
