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

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Undiluted Reserves at $700 per Ounce Gold Overburden Tonnes 23,700,000 Oxide Below 0.15 g/tonne* 19,600,000 Subtotal, Waste Rock 43,300,000 In-Pit Proven and Probable Reserves In-Pit Inferred Resources Cut-off Tonnes Average Cut-off Tonnes Average Grade Above Grade Grade Above Grade (g/tonne) Cut-off (g/tonne) Ounces (g/tonne) Cut-off (g/tonne) Ounces 0.15 58,400,000 0.46 870,000 0.15 131,000 0.30 1,300 * This material must be mined but does not meet the processing cut-off. 14.2.6 Mine Plan and Schedule Mine plans and a mining schedule were developed for the $625 per ounce scenario (see Appendix A). A bias was introduced into the optimization process that outlined incremental pits within the $625 pit that could be mined at higher average grades. This resulted in higher grades being mined during the early years to repay capital costs, with progressively lower grades being mined in later years. While Howe has developed an optimized production schedule to show the potential of long term mine planning, Howe has used the average grade in developing the Castle Gold mine cash flow forecasts. The overall mine life based at a US$625/oz Au price is eleven years. Ore production ramps up to 5,000,000 tonnes per year (diluted) by Year 3. Also in Year 3, recovered gold production is at its peak at 52,000 ounces) and overburden (waste rock and below-cut-off-oxide) stripping reaches 3,100,000 tonnes per year. Level sections showing the resource model and the optimum pit outlines at Year 4, Year 7, Year 9 and Year 11 (end of mine life) are included in Appendix A 14.2.7 Comparison between Howe 2003 and Howe 2008 Reserve Estimates Table 13 is a summary table comparing the results between the proven and probable reserve estimates obtained from the Howe 2003 and Howe 2008 reserve estimates based on various gold prices. 46
Table 13. Comparison of Howe 2003 and Howe 2008 Reserve Estimates RESERVE ESTIMATE 2003 GOLD PRICE CUT-OFF PROVEN & PROBABLE RESERVES GRADE (g/t) TONNES (‘000) GRADE (g/t) MINEABLE OUNCES (‘000) Howe 2003 $325 0.27 17,656 0.88 497 Howe 2003 $350 0.26 20,878 0.82 548 Howe 2003 $375 0.25 24,238 0.77 597 RESERVE ESTIMATE 2008 GOLD PRICE CUT-OFF PROVEN & PROBABLE RESERVES GRADE (g/t) TONNES (‘000) GRADE (g/t) MINEABLE OUNCES (‘000) Howe 2008 $625 0.15 46,800 0.50 752 2003 gold price Change in-pit tonnes from Howe 2003 to Howe 2008 reserve estimate Change in average gold grade from Howe 2003 to Howe 2008 reserve estimate Change in mineable ounces from Howe 2003 to Howe 2008 reserve estimate $325 165% -43% 51% $350 124% -39% 37% $375 90% -35% 26% It is clear that the increase in gold price itself significantly increases the estimated mineable gold ounces and the amount of in-pit tonnes. 47
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 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: Undiluted Reserves at $600 per Ounc
Page 59 and 60: 15.2.2 Change of Land Use The Compa
Page 61 and 62: 16.2.1 Capital and Operating Cost E
Page 63 and 64: Table 15. Operating Cost Summary (U
Page 65 and 66: will be operating the mine indirect
Page 67: Table 17. Sensitivity Analysis - Gr
Page 70 and 71: 16.2.2 Economic Evaluation The Base
Page 72 and 73: Table 23. US$ - 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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