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

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additional column and bottle roll tests designed to optimize leach performance and at the time of writing the results of these tests are pending. From the metallurgical testing completed to date the following conclusions are made: 1. Ultimate gold recoveries from ROM ore material placed directly on the leach pad (no crushing) are in the 50-55% range; 2. Crushing of material to
epresent an incremental increase in the project NCF of US$51.0 million when compared to the previous 2006 Howe evaluation (A.C.A. Howe report 897). Since the mine is already in production and most of the investment capital has been sunk, the El Castillo project generates an infinite Internal Rate of Return. Likewise, the Payback Period is zero as Net Cash Flow is positive from Year One on. The breakeven (after tax) gold price is approximately US$370/oz Au. The breakeven price includes recovery of all future capital investments and operating costs. The El Castillo Project contracts out a large amount of its operating costs including drilling, blasting, mining, truck haulage and crushing. Thus, the project will require very little capital to increase production to 5.0 million tonnes of ore per year. The breakeven gold price of $370 per ounce should be sufficiently low to protect El Castillo from a substantial drop in the price of gold. Thus Howe concludes the El Castillo Project is economically viable (criteria #1 that establishes that this is ore) and robust (under conservative operating scenarios). Conclusions • The Property contains a low-sulphidation epithermal gold system. • Castle Gold has carried out many of the recommendations given in the 2002 and 2003 Howe reports; principally column and bottle roll metallurgical testing, bulk leach testing, and core drilling for comparison with, and verification of, the Battle Mountain RC drilling assays. • The metallurgical testwork completed to date indicates that gold recoveries of between 68 and 72% are achievable by crushing 23-40% of the mine material to
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: Undiluted Reserves at $550 per Ounc
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 $600 per Ounc
Page 57 and 58: Table 13. Comparison of Howe 2003 a
Page 59 and 60:
15.2.2 Change of Land Use The Compa
Page 61 and 62:
16.2.1 Capital and Operating Cost E
Page 63 and 64:
Table 15. Operating Cost Summary (U
Page 65 and 66:
will be operating the mine indirect
Page 67:
Table 17. Sensitivity Analysis - Gr
Page 70 and 71:
16.2.2 Economic Evaluation The Base
Page 72 and 73:
Table 23. US$ - 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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