Castle Resources Inc.

March 05, 2010 16:33 ET

Castle Resources Announces Positive Preliminary Economic Assessment for the Elmtree Gold Project

- Micon International’s PEA confirms robust economics at Elmtree

- Management fast-tracking Elmtree to bankable feasibility this year

- Permitting process has begun at the Elmtree Project for open pit plan

TORONTO, ONTARIO--(Marketwire - March 5, 2010) - Castle Resources Inc. (TSX VENTURE:CRI) ("Castle" or the "Company ") is pleased to announce the results of its NI 43-101 compliant Preliminary Economic Assessment ("PEA") for its Elmtree Gold Project near Bathurst, New Brunswick. The independent PEA was completed by Micon International Limited ("Micon") of Toronto, Ontario.

Management commissioned the Micon PEA to determined baseline economics of the Elmtree project. The PEA indicates a pre-tax IRR of 25% using $900 Au/oz and a pre-tax IRR of 63% using $1,100 Au/oz, based on open pit mining and processing of 1.117 million tonnes with an average gold grade of 2.41 g/t Au, a stripping ratio of 6.3 (W/O), and assumes a 90% Au recovery and a 60% Ag recovery.

Highlights from Micon's Elmtree PEA at 100% interest include:

Gold Ounces 85,000  
Silver Ounces 17,000  
Mine Life 15 months  
Development Time 12 – 15 months  
(Feasibility & Permitting)    
Price of Gold $900 /oz $1,100 /oz
Price of Silver $12 /oz $16 /oz
CAPEX LOM $3 million $3 million
OPEX LOM $45 million $45 million
Gross Sales $73.8 million $90 million
Net Cash (pre-tax)* $7.6 million $23 million
IRR (pre-tax) 25% 63%
NPV (8%) $3.8 million $14.3 million

* after return of Capital Expenditures (CAPEX)

The Micon study is based on the extraction of NI 43-101 compliant Indicated and Inferred resources through a bulk tonnage, open-pit mining scenario. The study suggests that the best economic return can be achieved with a toll milling strategy that significantly reduces CAPEX for a project of this size. All the results presented in this release assume toll milling at an existing facility for the production of a sulphide concentrate and its sale to a nearby smelter. The PEA also considers a base case that includes a processing plant and tailings facility at Elmtree. The Elmtree Gold Project is located in a favourable mining jurisdiction with excellent local milling and processing infrastructure, including power, roads and a skilled work force.

"We are very excited by the economic returns laid out by Micon for the Elmtree Project," said Mr. Stephen Shefsky, President & CEO of Castle Resources Limited. "Our goal now is to advance the project towards bankable feasibility within 12 months with the aim of beginning production at Elmtree in the next 18 months."

Castle is in the first year of a 3 year option agreement with Stratabound Minerals Corp. to acquire up to a 70% interest in their 100% owned Elmtree Gold Property (see press release dated June 12, 2009). The Elmtree property (85 claims, 1,375 hectares) hosts at least three gold-bearing zones, the higher grade West Gabbro Zone, original Discovery Zone and the larger tonnage, lower grade South Gold Zone. In 2008 a NI 43-101 compliant resource estimate prepared by Mercator Geological Services Limited (Mercator) reported 525,000 Indicated tonnes in the West Gabbro Zone grading 2.45 g/t gold; 1,556,000 Inferred tonnes in the West Gabbro Zone grading 2.01 g/t gold; 2,367,000 Inferred tonnes in the South Gold Zone grading 0.74 g/t gold; 583,000 tonnes in the Discovery Zone grading 1.15 g/t gold only, as well as 117,000 Inferred tonnes in the Discovery Zone grading 1.77 g/t gold, 44.36 g/t silver, 0.78% lead and 2.17% zinc. Mercator's estimate was used by Micon as the basis for the PEA. Mineral resources that are not mineral reserves do not have demonstrated economic viability.

The PEA is reported in accordance with Canadian Securities Administrators' NI 43-101 and mineral resources have been classified in conformity with generally accepted CIM "Estimation of Mineral Resource and Mineral Reserves Best Practices" guidelines. Gold and silver grades were estimated using inverse power of distance constrained by geologic shapes constructed at reasonable cutoffs.

The PEA is preliminary in nature and includes Inferred Mineral Resources that are considered too speculative, geologically, to have the economic considerations applied to them that would enable them to be categorized as Mineral Reserves. There is no certainty that all or any part of the mineral resource will be converted into mineral reserves. The PEA was prepared by Sam Shoemaker Jr., Victor Bryant and Christopher Jacobs of Micon. A copy of the Technical Report will be available on SEDAR within 45 days.

Castle Resources is presenting at the 2010 PDAC in Toronto, March 7-10, booth #2319

Brad Leonard, P. Geo., Castle's Exploration Manager, is the Qualified Person responsible for the scientific and technical work discussed as defined under National Instrument 43-101 and has reviewed this press release.

About Castle Resources

Castle Resources Inc. is a Toronto-based junior mineral exploration company focusing on high-quality, advanced exploration gold projects. Management's goal is to quickly advance the new Elmtree option and to seek additional opportunities to continue to add value for shareholders. For more information please visit the Castle Resources' website at


Certain statements contained in this news release may contain forward-looking information within the meaning of Canadian securities laws. Such forward-looking information is identified by words such as "estimates", "intends", "expects", "believes","may", "will" and include, without limitation, statements regarding the company's plan of business operations (including plans for progressing assets), estimates regarding mineral resources, projections regarding mineralization and projected expenditures. There can be no assurance that such statements will prove to be accurate; actual results and future events could differ materially from such statements. Factors that could cause actual results to differ materially include, among others, metal prices, risks inherent in the mining industry, financing risks, labour risks, uncertainty of mineral resource estimates, equipment and supply risks, title disputes, regulatory risks and environmental concerns. Most of these factors are outside the control of the company. Investors are cautioned not to put undue reliance on forward-looking information. Except as otherwise required by applicable securities statutes or regulation, the company expressly disclaims any intent or obligation to update publicly forward-looking information, whether as a result of new information, future events or otherwise.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

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