Castle Gold Corporation
TSX VENTURE : CSG

Castle Gold Corporation

January 16, 2008 11:24 ET

Castle Gold Commences Drilling at La Fortuna Gold Project

TORONTO, ONTARIO--(Marketwire - Jan. 16, 2008) - Castle Gold Corporation ("Castle Gold" or the "Company") (TSX VENTURE:CSG) is pleased to announce that it has commenced a diamond drill program at its 100% owned La Fortuna Gold Project. The drill program is intended to verify historic drilling data as part of the production of a National Instrument 43-101 compliant resource estimate. The Company anticipates completion of this resource estimate in the second quarter of 2008.

As detailed in an independent, National Instrument 43-101 Compliant Technical Report ("the Report") prepared by Toren K. Olson, P.Geo. of Toren Olson Consulting (see May 17, 2007 press release), La Fortuna is located in the north-western corner of the State of Durango, Mexico about 70 kilometers northeast of Culiacan. Between 1991 and 1996, in excess of US$ 9.0 million was spent by previous owners developing La Fortuna. Previous work included detailed mapping and sampling of underground openings, and 121 closely spaced diamond drill holes aggregating a total length of 18,900 meters. The Report states "the La Fortuna ore body is well defined with 121 diamond drill core holes on a relatively close spacing", and goes on to note that there "are several other showings around the property which may also develop into resources with additional exploration and definition drilling thereby increasing the potential at La Fortuna."

In July of 1995 Fluor Daniel Wright (Fluor) of Vancouver, B.C. was commissioned to estimate the geological resource and to develop preliminary open pit designs for La Fortuna. This work produced an historical resource at a 0.5 g/t cut-off grade of 4,451,000 tons grading 2.25 g/t gold, 29.9 g/t silver and 0.23% copper (322,000 ounces gold, 4.3 million ounces silver, and 22.6 million pounds of copper). It should be noted that the historical assays and resources discussed above were calculated prior to the implementation of National Instrument 43-101 and do not comply with the current Canadian Institute of Mining, Metallurgy and Petroleum (CIM) standards and definitions for estimating resources and reserves as required by Canadian National Instrument 43-101 "Standards of Disclosure for Mineral Projects". Sufficient work has not been done to verify the historical assays and resource estimate and to classify it as a current mineral resource and therefore this estimate should not be relied upon.

Previous metallurgical test work at La Fortuna was carried out by Colorado Minerals Research Institute (CMRI) and METCON to test the applicability of heap leaching using core samples which represented average grade indicated by the core drilling program. CMRI's conclusions showed that a 1/2" crush size produced a heap leach gold recovery of 64% with a 147 day leach cycle. This result was also verified by METCON's test work. Alternatively, conventional whole ore cyanidation utilizing a grind size of 100 mesh (149 microns) resulted in gold recoveries up to 97%.

Darren Koningen (P. Eng.), Vice-President - Operations, is the Qualified Person under National Instrument 43-101 for the La Fortuna Project.

Castle Gold is a growth oriented gold producer focused on expanding gold production within the Americas. Castle Gold owns a 100% interest in the El Castillo gold mine in Durango, Mexico and a 50% interest in the El Sastre gold mine in Guatemala. Castle Gold is also advancing exploration and development work at its La Fortuna gold project in Mexico and at its El Sastre, El Arenal, Bridge and Lupita projects in Guatemala.

Current issued and outstanding share capital: 75,310,782

CAUTION REGARDING FORWARD LOOKING STATEMENTS:

The information referred to referred to above contains "forward-looking statements" within the meaning of the United States Private Securities Litigation Reform Act of 1995 and applicable Canadian securities legislation. Forward-looking statements include, but are not limited to, statements with respect to the future price of metals, timing of exploration activities, mine life, economic viability and estimated internal rate of return, estimation of mineral resources, the results of drilling, estimated future capital and operating costs, future stripping ratios, projected mineral recovery rates and plans for developing, the projects. Generally, these forward-looking statements can be identified by the use of forward-looking terminology such as "plans", "expects" or "does not expect", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates" or "does not anticipate", or "believes", or variations of such words and phrases or state that certain actions, events or results "may", "can", "could", "would", "might" or "will be taken", "occur" or "be achieved". Forward-looking statements are subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of the companies to be materially different from those expressed or implied by such forward-looking statements, including but not limited to: risks related to the exploration and potential development of the projects, risks related to international operations, the actual results of current exploration activities, conclusions of economic evaluations, changes in project parameters as plans continue to be refined, future prices of metals. Although the companies have attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking statements, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements. The companies do not undertake to update any forward-looking statements that are incorporated by reference herein, except in accordance with applicable securities laws.

The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy of this news release.

Contact Information

  • Castle Gold Corporation
    Chris Babcock
    President and CEO
    Toll-Free: 1-866-646-3274
    Website: www.castlegoldcorp.com