Castillian Resources Corp.

Castillian Resources Corp.

September 29, 2005 16:31 ET

Castillian Acquires Pederson Gold Property In Bolivia

TORONTO, ONTARIO--(CCNMatthews - Sept. 29, 2005) - CASTILLIAN RESOURCES CORP (TSX VENTURE:CT) has entered into an agreement with Maximus Resources S.A. with respect to the acquisition by Castillian of the Pederson Gold Property in Bolivia. The Pederson Property, comprised of 13 contiguous concessions which cover approximately 78 square kilometres, is located in the central west side of Bolivia, approximately 360km from the capital, La Paz, and about 130km south from Oruro, a major regional centre and site of several significant mining operations.

The Pederson Property contains a large, near surface, structurally controlled, sediment hosted gold deposit which has been subject to extensive historical exploration during the 1990's, including 21,616m of RC and diamond core drilling. Quartz-antimony-gold stockworks form interconnected stratiform "saddle-reef" style ore bodies in folded Paleozoic sediments along the axis and flanks of a cross-faulted north-south trending anticline.

Previous exploration, primarily by BHP during a joint venture period in 1998-1999, has defined an area of continuous gold mineralization upon which historical, non-NI43-101 compliant "measured, indicated and inferred" mineral resource estimates of approximately 51.6 million tonnes grading 1.4g/t Au (2.3M oz gold) were estimated at a cut-off grade of 0.5g/tAu over a 3.0m width using simple cross-sectional methodologies in accordance with the 1991 SME Guide for Reporting Exploration Information, Resources and Reserves. Historically the property has been mined for antimony, with some limited gold production. Castillian has not completed the necessary work to verify this resource and is therefore cautioning investors not to treat this as a 43-101 defined resource and that it should not be relied upon.

Approximately 20-25% of the mineralized zone is within oxidized material and may be amenable to heap leach recovery. Limited historical metallurgical test work indicates recoveries of approximately 77% and 90%, in the oxidized and primary (sulphide) zones respectively.

Evaluation of the Pederson Property will include: (1) surface sampling of previously un-sampled road cuts, (2) confirmatory diamond drilling to validate previous RC Drilling results and to provide additional structural information on the control of individual ore zones, particularly for resource interpretations, (3) completion of a NI 43-101 compliant mineral resource estimation, (4) additional metallurgical test work and (5) ultimately a Preliminary Assessment of the project.

The project area also has considerable exploration potential which has not been thoroughly tested; follow-up of previously defined soil geochemical anomalies is required.

Castillian's President and C.E.O., John Buckle, P.Geo. stated "The Pederson Property represents an advanced exploration target with a significant resource potential."

To acquire up to a 100% interest in the property, Castillian has entered into an agreement with Maximus Resources S.A., pursuant to which Castillian would acquire the rights and obligations that Maximus has under an agreement in principle with Orvana Minerals Corp. and an agreement with EMUSA. Orvana and EMUSA are the current indirect owners of the Property and EMUSA is the current owner of the Bolivian Company that is the operator of the project. To acquire the Property and the operations of the project, Castillian would be required to make cash payments of US$50,000 and issue the equivalent of US$50,000 worth of common shares of Castillian to each of Orvana and EMUSA upon receipt of regulatory approval for the transaction. Additionally, each of Orvana and EMUSA would receive US$50,000 and the equivalent of US$50,000 of common shares within 90 days, an additional 1,000,000 shares and the equivalent of US$1,000,000 of common shares within 12 months and a final cash payment of US$1,400,000 within 5 years of completion of a feasibility study on the Property. Orvana and EMUSA would retain a collective net smelter royalty of up to 1.5% on the Property, with advance royalty payments of US$200,000 per year commencing on the second year anniversary of the agreement (with those payments counting towards a US$2,000,000 buyout of the royalty that is held by Orvana and EMUSA). The agreement in principle with Orvana is subject to, among other things, completion of due diligence, the approval of Orvana's board of directors and execution of definitive binding documentation.

To assume the agreements from Maximus Resources S.A., Castillian would be required to make a one time cash payment of $100,000 as well as issue 500,000 common shares of Castillian to Maximus.

A technical report has been completed by Mr. Douglas A Currie, MAusIMM, of Gwynva Resources Management Inc., an independent Qualified Person as defined by National Instrument 43-101. This report will be filed on SEDAR shortly.

The agreements referred to above remain subject to receipt of regulatory approval.

Castillian Resources Corp. is a Canadian mineral exploration company listed on the TSX Venture Exchange. The company is focused on acquiring, exploring and developing Nickel-Copper, polymetallic and base metal deposits in Latin America. Inventories of base metals are diminishing at historical rates with a prognosis for ever increasing consumption. Although the Brazilian shield has potential for mining-camp scale base metal deposits, this region has rarely seen the application of modern exploration technology. Also largely overlooked, is the potential for volcanogenic massive sulphide and polymetallic deposits in the Andean Cordillera. Recently restructured, Castillian Resources has targeted these potential resources, commencing with the high-profile Mangabal Joint Venture with Falconbridge Brasil Ltda.

Contact Information

  • Castillian Resources Corp.
    John Buckle
    President & CEO
    (905) 517-6555
    Castillian Resources Corp.
    Tony Wonnacott
    Corporate Secretary
    (416) 861-5879
    (416) 861-8165 (FAX)