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

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Operating experience has indicated that much of the higher grade material presently being crushed (up to 70%) is already below the required final size range. Castle Gold management has indicated that it intends to introduce a screening plant ahead of the crusher. This should ensure that only about 30% of the material will actually go through the crusher; drastically reducing the crushing costs and allowing for a greater proportion of ROM ore to be sent to screening and crushing thereby increasing the overall heap leach recoveries. The scenarios do not account for any agglomeration of El Castillo ROM material. Operating experience from the mine indicates that the material mined to date would not have benefited from agglomerating. 16.2.1.2 Metal Prices Recently gold prices have exceeded the US$1,000/ounce threshold. When Howe first began this project (January 2008) the average 3 year gold price (London Daily Fixing) was US$578/oz. At the current time (June 27, 2008) the average trailing three year gold price is US$652/oz. In addition the June 27, 2008 London Gold price Second Fixing was US$919.50 per oz. Howe has used a gold price of $712 in 2008, $697 in 2009 and $625 per ounce for the remainder of the mine life. These prices are based on a National Bank compilation of the forecasts of 35 major institutions in November 2007. 16.2.1.3 Mine Dilution Howe has added 5% dilution at zero grade to the gold grades in the cash flow calculations. 52
Table 15. Operating Cost Summary (US$). 1,500,000 Tonnes Ore per Year 5,000,000 Tonnes Ore per Year Ore and Waste Mined (tonnes) Ore 1,500,000 5,000,000 Waste (assume W:O 1.5:1.0) 2,250,000 7,500,000 Total 3,750,000 12,500,000 Details of Payments Amount $/t ore % Amount $/t ore % Ore/Waste Mining $3,860,000 $2.57 43.5% $12,250,000 $2.45 55.1% Mining/Geological Engineering & Misc. $200,000 $0.13 2.3% $200,000 $0.04 0.9% Screening and Crushing $1,110,000 $0.74 12.5% $1,750,000 $0.35 7.9% Plant/Processing Misc. (incl. Reagents) $1,310,000 $0.88 14.8% $4,400,000 $0.88 19.8% Labour $1,000,000 $0.67 11.3% $1,000,000 $0.20 4.7% Durango Office Expenses $310,000 $0.21 3.5% $288,000 $0.06 1.3% Site Construction (Plant and Ponds) $730,000 $0.49 8.2% $1550,000 $0.31 7.0% Miscellaneous Costs $350,000 $0.23 3.9% $700,000 $0.15 3.4% Total $8,870,000 $5.92 100% $22,138,000 $4.45 100.0% Mining Cost per tonne moved $1.03 $0.98 Notes: 1) The mining cost has been reduced from $1.03 to $0.98to reflect new larger scale contracts being negotiated with the mining contractors 2) The Plant Process costs is based on experience to date 3) Screening and Crushing assumes that 40% of the material will be crushed after the screening system is installed. 53
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 and 56: Undiluted Reserves at $600 per Ounc
Page 57 and 58: Table 13. Comparison of Howe 2003 a
Page 59 and 60: 15.2.2 Change of Land Use The Compa
Page 61: 16.2.1 Capital and Operating Cost E
Page 65 and 66: will be operating the mine indirect
Page 67: Table 17. Sensitivity Analysis - Gr
Page 70 and 71: 16.2.2 Economic Evaluation The Base
Page 72 and 73: Table 23. US$ - 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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