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Castle to focus on graphite following Great Boulder deal

Updated: Apr 17

Castle Minerals has recorded positive gold results from drilling at the Wanganui project near Meekatharra. Credit: File

Castle Minerals has vowed to switch more focus onto its Kambale graphite project in Ghana after agreeing to sell a 75 per cent chunk of its Polelle and Wanganui gold projects near Meekatharra in Western Australia to Great Boulder Resources.

While Castle will retain a 25 per cent financial exposure to the promising gold projects as part of the deal with Great Boulder, it will also give it space to better explore Kambale. Just last month, management unveiled a 38 per cent boost to the mineral resource estimate at the project, taking it to 22.4 million tonnes averaging 8.6 per cent total graphitic carbon (TGC).

The updated resource followed impressive results from 43 reverse-circulation (RC) drillholes Castle plunged into its deposit in August that included 86m going 8.2 per cent TGC from 104m, with grades peaking at 24.1 per cent TGC. The Kambale graphite deposit sits within a broader 149-square-kilometre licence area within Ghana’s mining-friendly Wa region and close to major sealed roads and rail networks.

The company says the Great Boulder deal was a natural progression.

With Castle’s focus on fast-tracking its Kambale Graphite Project, aligning the Polelle and Wanganui Projects with the Side Well Project is the logical way forward. We have closely followed the impressive developments at Side Well and believe that combining these extensive and prospective projects substantially increases the opportunity to establish a critical mass of resources in this very under-explored eastern region of the prolific Meekatharra gold camp. Castle Minerals managing director Stephen Stone

The deal doubles Great Boulder’s footprint at Meekatharra to 384 square kilometres, with Polelle located south of the company’s flagship South Well project and in a similar geological and structural setting.

The project sits 7km south-east of Westgold Resources’ operating Bluebird gold mine and hosts a mainly obscured and minimally-explored greenstone belt that is prospective for gold. It also has the potential for base metals, while Wanganui is considered prospective for down-plunge high-grade gold shoots.

An RC drill campaign by Castle at Wanganui returned some solid results including a 3m hit grading 18.66 grams per tonne gold from 62m, 8m at 4.1g/t gold from 66m and 10m going 3.34g/t gold from 56m.

As part of the heads of agreement, Great Boulder has a 12-month option to explore Polelle and Wanganui. Consideration for the option is $50,000 in scrip valued at a 30-day volume-weighted average price (VWAP) prior to the execution date of the agreement, with a further commitment to spend a minimum of $250,000 on exploration.

The company may exercise the option and acquire a 75 per cent interest in both projects by paying Castle an additional $100,000 in scrip valued at a 30-day VWAP. Great Boulder may also extend the option for an additional 12-month period by paying a second option fee of $100,000 in scrip, in addition to committing to spend another $400,000 during the second option period.

Upon exercising the option, the two companies will form a 75:25 contributing joint venture (JV). If Castle elects not to contribute, its JV interest will dilute annually on a pro-rata basis. If Castle’s interest drops below 10 per cent, it will automatically convert to a 1 per cent net smelter royalty.

There is also a pre-existing 1 per cent gross revenue royalty for both projects, which has been acquired by Castle.

Great Boulder expects to reveal a list of priority targets within its new ground after its geologists finish compiling and assessing all previous exploration data. It says initial work is likely to involve field mapping and ground-truthing of the priority targets.

And with the latest agreement with Great Boulder in place, Castle now finds itself in the enviable position of being able to concentrate its efforts on Kambale, while still maintaining an interest in both Polelle and Wanganui.

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