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

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The village of Atotonilco, is located about 6 km from the Property and has a small supply of unskilled labor (± 150 inhabitants). The town of San Juan del Rio is located approximately 15 km from the Property and it has a slightly larger supply of unskilled labor (± 2,500 inhabitants) as well as a limited supply of housing. Some basic supplies are available in San Juan del Rio while most supplies and some contractors for construction and mining are available in Durango. Durango is a major regional population center with approximately 500,000 inhabitants. There are daily flights to Durango from Mexico City and Mazatlán. Both Mexico City and Mazatlán have daily air connections to major cities in North America. Plate 1. Photograph of the El Castillo area, showing topography, vegetation and current open-pit bench development as of December 2007 (looking south). 14
3.0 HISTORY The El Castillo Project is a grass roots discovery that resulted from a regional exploration program initiated by Battle Mountain Gold in 1995 to explore for sub-one gram Au per tonne bulk tonnage targets. Battle Mountain was taken over by Newmont in 2000 and Newmont decided that the El Castillo was too small to meet their corporate requirements. Newmont completed a modest program of site reclamation (replanting drill pads, and recontouring and replanting some of the drill roads) and turned the property back to the Government of Mexico. Initial regional work by Battle Mountain involved interpretation of satellite imagery, regional geophysical data and regional geological mapping. A number of areas were selected on the basis of the regional studies, one of which was the El Castillo project area. Subsequent stream sediment geochemical surveys outlined a significant gold geochemical anomaly in the El Castillo area which led to a successful program of drilling that resulted in delineation of the El Castillo gold resource by Battle Mountain. Battle Mountain completed 207 reverse-circulation (“RC”) holes and six diamond drillholes (twins of six RC holes) within the El Castillo project area. This drillhole data has provided the basis for Howe’s evaluation of the resource and reserve potential of the El Castillo deposit. Battle Mountain (Schumacher 1999) completed a resource estimate, scoping study, preliminary mine plan and reserve estimate that indicated the potential for a viable mining operation with similarities to Hecla’s La Choya deposit in northern Mexico. Castle Gold acquired the Property in 2002. Work completed by Castle Gold includes six twin diamond drillholes, air-track drilling, rock ship sampling and bulk metallurgical testing. This 2006 work will be described in the following sections of the report. 15
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 and 14: Table 4. Driving distances from Dur
Page 15 and 16: Castle Gold has accepted that the q
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: Table 5. Maximum precipitation in a
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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