Castle Gold Corporation

Castle Gold Corporation

November 12, 2008 14:46 ET

Castle Gold Files NI 43-101 Technical Report on La Fortuna Project, Indicated Resources Total 308,000 Ounces Contained Gold

TORONTO, ONTARIO--(Marketwire - Nov. 12, 2008) - CASTLE GOLD CORPORATION (Castle Gold, the Company) (TSX VENTURE:CSG) is pleased to announce the results from the National Instrument 43-101 mineral resource report, entitled: "La Fortuna Project, Durango, Mexico - Updated Technical Report", written by Toren K. Olson, P.Geo. and filed on Sedar ( which incorporates results from recent drilling completed at the site. The La Fortuna deposit is a large approximately 10,000 hectare wholly owned gold-silver-copper advanced-stage exploration project located in northwestern Durango State, Mexico. The intention of the new report was to upgrade the historical resource information for the project under the standards dictated by national Instrument 43-101. From this work, a National Instrument 43-101 compliant Measured and Indicated resource of 4.8 million tonnes grading 1.98 grams per tonne gold for a total of 308,000 ounces of contained gold (0.5 gram per tonne cut-off grade) was identified. This compares to a historical, non-NI 43-01 compliant resource of approximately 4.45 million tonnes grading 2.25 grams per tonne gold (322,000 contained ounces) at a similar 0.5 gram per tonne cut-off. Resources at varying cut-off grades are illustrated in Table 1 - Measured and Indicated Resources, La Fortuna Deposit, Durango State, Mexico.

Darren Koningen, Vice President Project Development at Castle Gold commented on the results from the recent resource study stating: "These results are well within our expectations. Having confirmed the historical data base with the recent twin drilling, we now have a higher level of confidence in the extent and quantity of gold at the project. As part of our activities to improve our understanding of the economic potential of the deposit, we continue to advance our metallurgical test program investigating alternative scenarios for the recovery of gold, including: heap leaching, grinding and flotation, gravity concentration and mineral sorting. We hope to report results from this program shortly. Beyond this fundamental work, we remain intrigued by some of the high grade intersections coming from the project. Holes like LF 003 and LF 007 intersected 44.2 metres and 51.3 metres, respectively grading 6.4 and 7.4 grams per tonne gold plus silver and copper values. These holes and others like them continue to offer the potential for a rich mineralized system, the dimensions and grade of which is only initially understood."

Table 1.

Measured and Indicated Resources, La Fortuna Deposit, Durango State, Mexico

Measured Indicated Measured & Indicated
Cut-off Grade Tonnes Au Tonnes Au Tonnes Au Au Oz.
(g/t) (000) (g/t) (000) (g/t) (000) (g/t) (000)
0.8 1,322 3.33 2,681 1.73 4,003 2.26 290.8
0.5 1,538 2.96 3,287 1.53 4,824 1.99 308.1
0.3 1,538 2.96 3,669 1.41 5,207 1.87 313.1

Note: Based on a total of 127 drill holes comprising 19,400 metres, including 121 original holes 18,885 metres plus 6 twin holes comprising 515 meters. The six twin holes were drilled to verify previous drilling at the La Fortuna project. A total of 7,006 samples were used each generally representing 2 metres of core length. Assays normally included gold, silver and copper, however, in some cases silver and copper values were not available and as a result of the inconsistency of this sampling resources of silver and copper were not calculated. The previous assays for the most part were carried out by Bondar Clegg of Vancouver, B. C. with the remainder of the samples processed by SGS Laboratories. The twin hole drilling program assays were analyzed by ALS Chemex.

Recommendations from the Report

The technical report recommended that the following work be conducted to further advance the project with the goal of expanding the known resources and producing a National Instrument 43-101 compliant reserve.

1. Relocate as many of the previous exploration drill holes as can be identified and establish their coordinates based on the new aerial survey work. At the same time confirm the azimuth and dip of the holes.

2. Adjust exploration database with new exploration drill hole coordinates.

3. Revise resource model with new coordinates.

4. Additional metallurgical testing to further establish the process method and parameters.

5. Phase 1 step-out drilling to test a combination of down-dip and strike extensions of known mineralization and the potential for parallel mineralized structures. Approximately 15 holes.

6. Review geological mapping and interpretation of deposit.

7. Update / revise geological model, following the completion of items 1-6.

8. Geotechnical study for slope stability of pit walls and waste dumps or underground workings depending on mining methods.

9. Generate reserve report and mine plans.

10. Geochemical and geophysical studies.

The report estimated a budget of approximately US$1.0 million for this program, US$700,000 of which was for the Phase 1 step-out drilling program. The Company is currently advancing a number of the recommendations which it believes will assist in better targeting locations for the step-out drilling, including compilation of the historic drill, geophysics and geochemical data base. No firm date is set for the commencement of additional drill work, but it is expected that most of the other recommendations will be completed in the first quarter of 2009 whereupon management believes they will have gained the necessary insights into the project which would permit them to more confidently target priority locations for follow-up exploration.

In addition to the La Fortuna deposit, additional areas of mineralization are known on the property, including:

- The La Tocaya zone which lies approximately 200 metres east of La Fortuna where strong sulphide mineralization is hosted within an approximately 15-20 meters wide and 60-70 meters long major northwest trending fault which includes trace to 1% pyrite, chalcopyrite and malachite.

- The Meloncita East zone which lies approximately 600 metres south-southwest of the La Fortuna Mine where a geological mapping and sampling program outlined quartz tourmaline and quartz tourmaline breccia alteration zones approximately 20 to 40 meters wide extending approximately 700 meters to the south end of the La Fortuna mine area. These alteration zones are very similar to the alteration and mineralization found at the La Fortuna mine main surface showing and contain highly anomalous gold values.

- The La Cantarana prospect lies 1.9 southwest of the La Fortuna mine site and 500 metres southwest of the Meloncita West zone. Historic rock sampling returned anomalous values of up to 6 grams per tonne gold over an area covering approximately 300 metres by 50 metres.

- The El Toro prospects are located about 3.5 kilometres west-northwest of the old San Fernando plant site (location of historic processing facilities for La Fortuna mined material). Some pyrite, chalcopyrite and copper carbonates are present on the dump of the old mine workings and in a caved adit. The limonitic zone is reportedly 150 metres wide and 700 metres in length. Historic results include a 1 metre sample assaying 28.4 grams per tonne gold and 283 grams per tonne silver. Another sample averaged 4.8 grams per tonne gold and 67.2 grams per tonne silver over a 4 meter length while a dump sample assayed 3.6 grams per tonne gold and over 50 grams per tonne silver.

- The Ramada prospects consist of two groups of showings, the more southerly being covered with overburden except for an exposed 7 metre length of quartz vein, 3.3 metres wide, in which historical assaying delivered 18 grams per tonne gold and 176 grams per tonne silver over a width of 3.3 metres. Further south the vein is exposed in a creek bed and a sample 3.7 metres wide returned results of 4.33 grams per tonne gold and 105 grams per tonne silver.

Portions of the historic geophysical and geochemical database cover a number of these areas. The Company is in the process of analyzing this data to enhance it's understanding of these areas and will consider additional follow-up exploration work once this evaluation work has been performed.

Qualified Person Comments/Quality Control Procedures

This press release has been reviewed by Mr. Toren K. Olson, P. Geo an independent consulting geologist and Mr. Darren Koningen, P. Eng., Castle Gold's Vice President Project Development. Both Mssrs. Olson and Koningen are Qualified Persons under National Instrument 43-101. The design of the above described drilling program was supervised by Mr. Olson and the NI 43-101 technical report was prepared by Mr. Olson.

All gold, silver and copper samples from the 6 hole, twinning diamond drill program were composited into 5 meter down the hole lengths generating 3630 composites. This was done in order to minimize statistical bias in subsequent analysis. It also conformed to the likely mining selectivity. Where analysed for gold, silver and copper, among other elements, drill core from this program was sawed in half with half of the core sent for preparation to ALS-Chemex in Hermosillo, Mexico and analysis conducted by ALS-Chemex Laboratories in Vancouver, Canada using gold fire assays with either Atomic Absorption Spectroscopy ("AAS") or gravimetric finish. Routine gold assays are by 30 gram fire assays and the repeat analyses have been carried out on pulps stored from the initial analyses.

In calculating the mineral resources, a mineralized envelope was produced based on a 0.30 g/t gold grade outline. This envelope was initially generated on vertical sections and then transposed to 5 meter interval level plans and adjusted as needed to produce a regular mineralized envelope. These mineral outlines were then used to generate a block model. The block model is based on 5x5x5 meter blocks and covers the entire mineralized area. Each block was assigned a grade for gold, silver and copper using inverse distance weighting with a power of 3. The model was generated in three separate interpolation runs to reduce the risk of smearing the higher grade intervals. The blocks that were interpolated within the first run were all classified as Measured. The blocks interpolated in the second run that are within 35 meters with a minimum of 2 composites were classified as Indicated while all other interpolated blocks are classified as Inferred Resources.

High grade composites were capped as follows: Gold: 15 g/t, Silver: 250 g/t, and Copper: 1.2%. This resulted in only 8 gold, 3 silver and 4 copper composites being capped.

About Castle Gold

Castle Gold Corporation is a growth oriented gold producer with projects focused in the America's. The Company owns a 100% interest in the El Castillo gold mine in 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-silver-copper project in Mexico and at its El Sastre and El Arenal project in Guatemala.

Total Shares Outstanding: 75.3MM
Fully Diluted: 88.9MM
52-Week Trading Range: $0.15 - $0.75

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Contact Information

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    Thomas Atkins
    President and CEO
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    Castle Gold Corporation
    Rory Quinn
    Manager Investor and Public Relations
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