Castillian Resources Corp.
TSX VENTURE : CT

Castillian Resources Corp.

November 17, 2010 08:00 ET

Castillian Identifies New Hangingwall Zone at Hope Brook, Newfoundland Intersecting 5.43 g Au/t Over 10.7 Metres

TORONTO, ONTARIO--(Marketwire - Nov. 17, 2010) - Castillian Resources Corporation (TSX VENTURE:CT) ("Castillian" or the "Company") is pleased to provide an update on its diamond drilling and exploration program at its Hope Brook Gold Project located on the southwest coast of Newfoundland. Significant initial drill results are detailed in Table 1 below. Highlights are as follows:

  • 5.43 grams gold per tonne (g Au/t) over 10.7 m (8.1 m true width) from 404.0 to 414.7 m in a new hanging wall zone and a second intersection of 2.16 g Au/t over 8.8 m (6.7 true width) from 473.0 m to 481.8 m in the upper part of the main zone in Hole HB10-003. The hanging wall intersection is located approximately 60 meters from the mine workings at a vertical depth of approximately 325 meters; and

  • 1.48 grams g Au/t over 10.7 m core length (8.1 m true width) from 459.7 m to 470.4 m in the main zone within a broader mineralized zone grading 1.07 g Au/t over 25.0 m core length (19.0 m true width) from 459.7 m to 484.7 m in Hole HB10-001

Dr. Bill Pearson, P.Geo., President & CEO of Castillian commented: "We are very excited about the initial drill results which confirm the targets developed from our re-interpretation of the historical data. Hole HB10-003 intersected a significant hanging wall zone that is approximately 40m above the main zone that was previously mined. In addition, the new holes indicate that the gold-bearing silicified zones at Hope Brook likely have a much steeper dip at depth than previously interpreted. Many of the deeper historical surface drill holes appear to have been too short to fully test the mineralized zones hence both the main and new hangingwall zones remain open downdip and along strike. The surface geophysical surveys show that the mineralized zones have very good continuity from the mine area southeastwards to the 240 zone area, a strike length of over 2.2 kilometres. In addition these surveys suggest that the main zone may extend further along strike east of the mine but is offset about 100 metres to the north and possibly down-dropped along a fault east of the mine." 

Table 1: Summary of Significant Drilling Results, Hope Brook Gold Project, November 16, 2010
 
Hole (i)   From (m)   To (m)   Core
Length
(m)
  True
Width
(m)
  Horizontal
Width (ii)

(m)
 
Gold(g/t)
HB10-003(iii)   404.0   414.7   10.7   8.1   8.6   5.43
and   426.0   428.0   2.0   1.5   1.6   1.66
and   445.0   448.0   3.0   2.3   2.4   2.54
and   473.0   481.8   8.8   6.7   7.0   2.16
HB10-002   Results pending                
HB10-001   459.7   484.7   25.0   19.0   20.0   1.07
incl.   459.7   470.4   10.7   8.1   8.6   1.48
incl.   477.7   484.7   7.0   5.3   5.6   1.17
and   494.7   497.9   3.2   2.4   2.6   1.82
and   503.6   504.6   1.0   0.8   0.8   1.75
(i)    All holes are NQ core size
     
(ii)    Horizontal width is quoted in the table to allow direct comparison to historical intersections that are reported using horizontal width as shown on the longitudinal sections in Figures 1 and 2. True width in the case of these holes is very close to horizontal width.
     
(iii)   Partial results

To date a total of 2,063 metres (m) in six (6) drill holes have been completed. The first three of these holes tested an area below the former mine and the next three holes tested a potential near surface mineralized zone immediately southwest of the former pit. The locations of the pierce points of these holes are shown in the attached vertical longitudinal sections, Figures 1 and 2. Figures 3 and 4 are geological cross sections of Holes HB-003 and Hole HB10-001, respectively. Results have been received only for Holes HB10-001 and HB10-003 thus far; all others results are pending.

Holes HB10-003 and HB10-001 are spaced about 100 m apart directly below the past producing Hope Brook Mine. Both intersected strongly silicified zones approximately 50 m and 70 m respectively below the 4,800 level (approximately 340 m below surface), the lowest level developed in the mine. The strongly silicified zones in both of these holes have the characteristic bluish-grey colour and vuggy texture disseminated pyrite and local chalcopyrite that is typical of gold –bearing mineralization historically reported. Hole HB-10-002 drilled about 35 m east of the 4800 level intersected a mixed zone of mafic and granitic rocks which appears to have disrupted the main silicified zone in this area.

In addition to the drilling, induced polarization (IP/RES) geophysical surveys both surface and down hole are being carried out. A total of 22.5 line kilometres of surface lines have been completed initially at 200 m line spacings from line 12400E northeast of the mine southwestwards to line 10400E in the 240 Zone target area (see Figure 2). Selected in-fill lines at 100 m spacing have also been completed. Physical property measurements have been completed on core samples in Hole HB10-001 to correlate the IP/RES response with different rocks types and zones of silicification with mineralization. A downhole IP/RES survey has been completed on hole HB10-003 however the first two holes were blocked due to down-hole caving preventing an adequate survey in these holes. Preliminary conclusions from the IP/RES surveys are as follows:

  • Major zones of silicification are marked by strong resistivity anomalies which reflect the intensity of silicification and chargeability anomalies which reflect the presence of sulphides. The chargeability anomalies tend to be broader reflecting the presence of sulphides in aluminous altered schistose rock which surround the silicified zones. The strong resistivity peaks within the broader chargeability responses directly correlate with the strongly silicified zones.

  • Initial results of the surface survey indicate that the IP will allow effective mapping of the silicified zones across the full mine target area from the open pit southwestwards to the 240 zone, a strike length of over 2.2 kilometres and to a depth of as much as 100 m. Airborne magnetic indicate that the favourable structure likely extends much farther to both the southwest and northeast.

  • The surface IP/RES survey suggests that the Main Zone has been offset and down-dropped along a fault to the east of the mine. The mineralized zone may extend further along strike northeast of the mine with a displacement of approximately 100 m to the north. There are no records of historical drilling in this area.

  • The down hole IP survey in Hole HB10-003 suggests that silicification strengthens towards the southwest from the hole as compared to eastward.

The Hope Brook deposit, discovered in 1983 by BP-Selco Inc., was mined from 1987 to 1997 with total production reported to be 752,163 ounces of gold plus a copper concentrate. Preproduction historical resources are reported have to have been 11.2 million tonnes grading 4.54 grams gold per tonne (g Au/t) at a 2.5 g Au/t cutoff (~1.60 million ounces of gold) (See the Technical Report dated September 9, 2010 filed under the Company's profile on SEDAR at www.sedar.com). The stated resource is historical in nature and not National Instrument 43-101 ("NI 43-101") compliant. Castillian has not done the work necessary to verify this resource and hence cautions that this estimate should not be relied upon.

As previously announced (see press release August 18, 2010) the exploration program will include at least 5,000 m of drilling focused on testing the prime target areas in the historic mine area and in the 240 Zone approximately one kilometre south of the mine. Five priority target areas as previously reported (see press release September 14, 2010) and outlined in the NI 43-101 Technical Report have been identified for exploration diamond drilling. The target areas are outlined below and shown on the attached longitudinal section (Figure 2) (all intersections horizontal width in metres):

  • Unmined historical resource areas and possible extensions to these that occur immediately adjacent to underground mine workings, particularly below the 4,800 Level (approximately 340 m below surface). Historical surface drill hole intersections in this area include 3.37 g Au/t over 10m (CW-051), 3.26 g Au/t over 16.4 m (CW-094) and 2.38 g Au/t over 27.9 m (CW-052) in addition to underground definition drill holes not shown on the longitudinal section;

  • The Northeast Extension area, located adjacent to and east of the mine (east of Line 12,000 East on the grid), where potential exists for discovery of a displaced, subsurface extension of the Hope Brook alteration zone and associated gold mineralization, based on interpretation of the 2008 airborne survey results;

  • The near-surface mineralized zone located immediately southwest of the open pit, between Line 11,000 East and Line 11,350 East, where potential exists for definition of gold mineralization extending from the limits of the historical open pit. Historical drill intersections in this area include 2.88 g Au/t over 10.3m (CW-246) 1.28 g Au/t over 24.5 m (CW-243), 4.64 g Au/t over 14.9 m (CW-235), 2.06 over 13.6 m (CW-012) and 3.11 over 18.0 m (CW-212);

  • Plunge extensions of the unmined 240 Zone, located 1 km southwest of the open pit. Historical drill intersections in this zone include 3.88 g Au/t over 41.0 m (CE-246), 2.71 g Au/t over 43.4 m (CE-283A) and 6.98 g Au/t over 5.8 m (CE-240);

  • The Chetwynd Prospect area, located 2 kilometres southwest of the mine, where extensions to mineralized historic drilling intercepts warrant follow-up

Collar coordinates and orientations of diamond drill holes in the current program are listed in Table 2.

Table 2: Collar Coordinates and Orientations of Drill Holes, Hope Brook Gold Project, November 16, 2010
 
Hole   UTM   Mine Grid   Elev.
(i)
  Length
(ii)
  Az
(iii)
  Dip
(iii)
Hole   Easting   Northing   Easting   Northing  
HB10-001   418479   5287806   11940   4812   5145   624.4   325   -64
HB10-002   418474   5287918   12000   4909   5142   500.0   325   -65
HB10-003   418423   5287765   11871   4813   5150   674.2   318   -62
HB10-004   417706   5287539   11154   5037   5113   50.0   325   -45
HB10-005   417646   5287520   11093   5055   5116   50.0   325   -44
HB10-006   417571   5287475   11006   5061   5102   40.8   160   -45
HB10-007   417328   5286583   10296   4468   5129   In progress   318   -62
(i)   Elevations have 5000 m added to actual measurements to conform to historical practice
     
(ii)   Total meterage in this table does not include one lost hole and one hole stopped due to excessive deviation with a collective total of 123.4 m bringing the total meterage drilled to date to 2,063 m excluding meterage in Hole HB10-007
     
(iii)   All measurements are in metres except Azimuth (Az) and Dip which are measured in degrees.

SAMPLING, ASSAYING AND QUALITY CONTROL

The core (NQ 47.6 mm) is logged, photographed and then sawn in half with one-half sent to the laboratory for analysis and the other half retained and stored on site. All core samples were prepared and assayed at ALS Chemex with sample preparation done in Sudbury and analytical work in Vancouver. All locations of ALS Chemex are ISO 9001:2000 certified. The entire sample received is weighed and crushed to ≥ 70% passing 2mm (10 mesh); a sample split of up to 1000g is then pulverized to ≥ 85% passing 75 microns (200 mesh) to produce a homogenized sample. A 50g aliquot is used for fire assaying with an atomic absorption (AA) finish to determine gold concentration. Internal quality control includes the use of blanks, duplicates and standards in every batch of samples. The Company also conducts internal check assaying using certified external reference standards and blanks. Regular external check assays are performed at a second certified Canadian commercial laboratory. Castillian also inserts external reference standards as well as blank granite drill core in each sample batch as a further external check.

Mr. Dan Lee, P.Geo. Chief Geologist and Project Manager for Hope Brook and Dr. Bill Pearson, P.Geo., President and CEO of Castillian, both of whom are qualified persons as defined by National Instrument 43-101 ("NI 43-101"), have reviewed and approved the scientific and technical content of this press release. Dr. Chris Hale, P.Geo., Chief Geophysicist for Castillian and a qualified person as defined by NI 43-101 has supervised all geophysical work at Hope Brook and has reviewed and approved the scientific and technical content of this press release.

Castillian Resources Corp. is a Canadian mineral exploration company listed on the TSX Venture Exchange under the symbol "CT" which has gold and base metal properties in Canada and South America. Castillian's flag ship property is the Hope Brook Gold Project located in southwestern Newfoundland where it has recently begun a 5,000 metre diamond drill program.

Cautionary Note Regarding Forward-looking Information

This press release contains "forward-looking information" within the meaning of applicable Canadian securities legislation. Forward-looking information includes, but is not limited to, statements with respect to the diamond drill program at the Hope Brook project and its anticipated results, the exploration program and anticipating timing with respect to the exploration program, future financial or operating performance of the Company, its subsidiaries and its projects, statements regarding exploration prospects, the identification of mineral reserves and resources, costs of and capital for exploration projects, exploration expenditures, timing of future exploration, requirements for additional capital, government regulation of mining operations, environmental risks, reclamation expenses, title disputes or claims, limitations of insurance coverage and the timing and possible outcome of pending litigation and regulatory matters. Generally, forward-looking information 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", "could", "would", "might" or "will be taken", "occur" or "be achieved". Forward-looking information is subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of the Company to be materially different from those expressed or implied by such forward-looking information, including but not limited to: general business, economic, competitive, political and social uncertainties; the actual results of current exploration activities; future prices of mineral prices; failure of plant, equipment or processes to operate as anticipated; accidents, labour disputes and shortages and other risks of the mining industry. Although the Company has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking information, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such information 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 information. The Company does not undertake to update any forward-looking information, except in accordance with applicable securities laws.

To view the "Hope Brook Gold Project" figures, please visit the following link:

http://media3.marketwire.com/docs/ctfiguresx.pdf

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