43-101 2008 Technical Report On The La Fortuna Project, Durango ...

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1.0 INTRODUCTION 1.1 General At the request of Mr. Darren Koningen, (“Castle Gold”), A.C.A. Howe International Ltd, (“Howe”) has been retained to prepare a Technical Report (“the Report”) specific to the standards dictated by National Instrument 43-101 and Form 43-101F (Standards of Disclosure for Mineral Projects) with respect to the El Castillo Property located in Durango, Mexico (“the Property”). Howe previously prepared a Pre- Feasibility Report (Howe reports #845 and #850, dated September 2002 and January 2003 respectively) for the El Castillo project that was then known as the El Cairo project. Castle Gold management renamed the project after a local prominent landmark. This updated report incorporates the results of an updated NI 43-101 compliant mineral resource/ reserve estimate based on additional geoscientific and pre-production development work that has been completed at the El Castillo Project subsequent to the 2003 Howe report (#850) by Castle Gold. Howe understands that Castle Gold will use this report for reporting purposes. Castle Gold was incorporated federally on August 28, 2007 in the province of Ontario pursuant to an amalgamation agreement between Morgain Minerals Inc. (“Morgain”) and Aurogin Resources Ltd. (“Aurogin”) dated July 18, 2007. Upon completion of the amalgamation, Castle Gold acquired all of the assets and liabilities of Morgain and Aurogin respectively. The Company's principal place of business is 80 Richmond Street, Suite 508, Toronto, Ontario M5H 2A4, Canada. Castle Gold’s El Castillo Project is held by its wholly-owned subsidiary, Minera Real del Oro, S.A. de C.V. The Mexican subsidiary was incorporated on August 30, 1995 and is located at Negrete 1311-C, Col. Los Angeles, Durango, Durango Mexico, CP 34070. In addition to the Property, Castle Gold also holds interests in the La Fortuna project, located in northern Durango Mexico, and the El Sastre Main Zone gold mine in Guatemala. Howe is an international geological and mining consulting firm that was incorporated in the province of Ontario in 1966 and has continuously operated under a “Certificate of Authorization” to practice as Professional Engineers (Ontario) since 1970 and as Professional Geoscientists (Ontario) since 2006. Howe provides a wide range of geological and mining consulting services to the international mining industry, including geological evaluation and valuation reports on mineral properties. The firm’s services are provided through offices in Toronto, Canada and London, U.K. 1.2 Scope and Conduct The Report was prepared by Mr. Daniel C. Leroux, B.Sc., P.Geo, Mr. Gordon Watts, P.Eng and Mr. W.D. Roy, M.A.Sc., P.Eng. Mr. Leroux has a Bachelors of Science degree in Geology and is a registered professional geoscientist with the Association of Professional Geoscientists of Ontario (#0742) and the Association of Professional Engineers and Geoscientists of Saskatchewan (#10475). Mr. Leroux has a total of 18 years of direct experience with gold projects located in Canada, Africa, Central and South America, including managerial responsibilities for all various exploration stage gold projects from conceptual grassroots exploration projects to resource estimation and / or feasibility studies on advanced gold projects. Additional experience includes the completion of various National Policy 2A and NI 43- 101 technical reports for gold projects worldwide. Mr. Watts is a P. Eng. with a Bachelor of Applied Science in Mining from the University of Toronto. Mr. Watts has over 36 years experience in mining exploration, mine operation, mine engineering, project evaluation, feasibility studies and financial evaluation. Mr. Roy has over 10 years of experience in the operations, engineering, and management of underground and open pit operations in Africa, South America and Canada. Mr. Roy has extensive experience in mine design, budgeting and cost control, due diligence, preparation of feasibility studies and technical qualifying reports. 4
Castle Gold has accepted that the qualifications, expertise, experience, competence and professional reputation of Howe’s Principals and Associates are deemed appropriate and relevant for the preparation of the Report. Castle Gold has also accepted that Howe’s Principals and Associates are members of professional bodies that are appropriate and relevant for the preparation of this Report. Universal Trans-Mercator grid coordinates (“UTM”) are based on the NAD 27 datum. The Property is located in UTM zone 13. 1.3 Sources of Information In preparing the Report, Howe reviewed available maps and cross-sections, company documentation and other public and private information as listed in the “Sources of Information” section at the end of this report. Howe has assumed that all of the information and technical documents reviewed and listed in the “Sources of Information” are accurate and complete in all material aspects. Howe has not been asked to verify mineral title, compliance with Mexican laws and regulations or the underlying inter-company agreements and title transfers. Though Howe has carefully reviewed the available information, Howe has not concluded any extensive independent investigation of the data. The volume of information available on the Property consists primarily of reports prepared by previous consultants and data prepared by previous property owner Battle Mountain Mining Company. Much of the historical and background information in the Report is from reports titled “Prefeasibility Report, El Cairo Gold Project, State of Durango, Mexico”, “Revised Prefeasibility Report, Higher Grade Scenario, El Cairo Gold Project, State of Durango, Mexico” , “Technical Report on the 2003 Diamond Drilling Program, El Cairo Gold Project, Durango State, Mexico” and “Prefeasibility Report El Castillo Project, Durango, Mexico” all prepared by Howe in 2002, 2003, 2004 and 2006 respectively, and; “Review of the El Cairo Project, Durango, Mexico”, “El Cairo Resource Estimate and Pit Optimization Study, Durango, Mexico” and “Updated El Cairo Resource Estimate and Pit Optimization Study, Durango, Mexico” all prepared by Resource Modeling Incorporated. All of these reports were prepared on behalf of Castle Gold’s predecessor Morgain. Mr. Leroux and Mr. Watts visited the El Castillo Gold Project on December 1, 2007. During this time they visited the current mining operations, reviewed the data available on-site and held discussions with Castle Gold management. Mr. Leroux and Mr. Watts were accompanied by Mr. Miguel Cardona – Chief Geologist and Mr. Pedro Delgado Ortiz Mine Manager for Castle Gold. In addition, Howe carried out discussions with Castle Gold’s management, in particular, Mr. Darren Koningen Vice-President - Operations. Howe’s extensive experience in the exploration and mining of gold deposits in Canada, Africa, and South America and prior investigations of other gold deposits throughout the world, was also drawn upon. The Report is based on information known to Howe as of March 1, 2008. 1.4 Disclaimer Castle Gold and its subsidiaries have warranted that full disclosure of all material information in its possession or control has been made to Howe. Castle Gold has agreed that neither it nor its associated companies will make any claim against Howe to recover any loss or damage suffered as a result of Howe’s reliance upon the information provided by Castle Gold or its proposed subsidiaries for use in the preparation of this Report. Castle Gold has also indemnified Howe against any claim arising out of the assignment to prepare this Report, except where the claim arises as a result of any proved willful misconduct or negligence on the part of Howe. This indemnity is also applied to any consequential extension of work through queries, questions, public hearings or additional work arising from Howe’s performance or engagement. 5
Page 1 and 2: TECHNICAL REPORT ON THE EL CASTILLO
Page 3 and 4: SUMMARY Introduction At the request
Page 5 and 6: Castillo Remaining Mineral Resource
Page 7 and 8: Undiluted Reserves at $550 per Ounc
Page 9 and 10: epresent an incremental increase in
Page 11 and 12: TABLE OF CONTENTS 1.0 INTRODUCTION
Page 13: Table 4. Driving distances from Dur
Page 17 and 18: 2.0 PROPERTY DESCRIPTION, LOCATION,
Page 19 and 20: Figure 2. Map showing mining conces
Page 21 and 22: 2.1.2.3 Property Taxes The property
Page 23 and 24: Table 5. Maximum precipitation in a
Page 25 and 26: 3.0 HISTORY The El Castillo Project
Page 27 and 28: commonly reach elevations of 2,500
Page 29 and 30: Figure 4. Cross-section through the
Page 31 and 32: At El Castillo, the presence of cha
Page 33 and 34: Toward the center of the mineralize
Page 35 and 36: 7.0 EXPLORATION In 2006, Castle Gol
Page 37 and 38: 9.0 SAMPLING METHOD AND APPROACH Th
Page 39 and 40: 11.0 DATA VERIFICATION 11.1 INTRODU
Page 41 and 42: Morgain Minerals Inc. El Cairo Gold
Page 43 and 44: 13.0 MINERAL PROCESSING AND METALLU
Page 45 and 46: Table 9. Castle Gold test heap leac
Page 47 and 48: material is relatively consistent a
Page 49 and 50: Plate 6. View of the El Castillo si
Page 51 and 52: 14.2.1 Methods A shift of -500,000
Page 53 and 54: 14.2.4 Pit Optimization Parameters
Page 55 and 56: Undiluted Reserves at $600 per Ounc
Page 57 and 58: Table 13. Comparison of Howe 2003 a
Page 59 and 60: 15.2.2 Change of Land Use The Compa
Page 61 and 62: 16.2.1 Capital and Operating Cost E
Page 63 and 64: Table 15. Operating Cost Summary (U
Page 65 and 66:
will be operating the mine indirect
Page 67:
Table 17. Sensitivity Analysis - Gr
Page 70 and 71:
16.2.2 Economic Evaluation The Base
Page 72 and 73:
Table 23. US$ - Mexican Peso Exchan
Page 74 and 75:
• Castle Gold should complete geo
Page 76 and 77:
Panteleyev, A., 1996, Epithermal Au
Page 78 and 79:
9. To the best of my knowledge, inf
Page 80 and 81:
CERTIFICATE OF AUTHOR dated July 31
Page 82 and 83:
Appendix A Pit Optimization Level P
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43-101 2008 Technical Report On The La Fortuna Project, Durango ...

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